Knife River (KNF) 6 Aug 242024 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Knife River Corporation Second Quarter Results Conference Call. [Operator Instructions] Also note that this call is being recorded on Tuesday, August 6, 2024. I would now like to turn the conference over to Nathan Ring. Please go ahead, sir.

Thank you, operator, and welcome to everyone joining us for the Knife River Corporation second quarter results conference call. My name is Nathan Ring, Chief Financial Officer of Knife River; and I'm joined by our President and Chief Executive Officer, Brian Gray. Today's discussion will contain forward-looking statements about future operational and financial expectations. filed significantly various projected the risks in periodic differ statements today's risks may our to SEC. due and reports results from in those forward-looking described Actual the with uncertainties, including

obligation further statements. as earnings and on required we today's our by please contained are the and no filings, release to legal law, other the For disclaimers to detail, SEC forward-looking in website which public update our available refer website. undertake Except

to by on references most overview certain our information. this Competitive measure presentation, an make with also During and presentation. website. Brian segment begin will the EDGE a plan will our measures non-GAAP to and of today's in today's defined directly quarter non-GAAP are materials high-level to we second These a GAAP are call followed These update available the our reconciled appendix recap. on Gray results, XXXX comparable

a a XXXX balance will line a call product to for open I summary, remarks, the At guidance. a remarks, financial of his review our we the conclusion will Brian. session. With turn I'll provide the Following now prepared line over that, of and our question-and-answer update sheet revised

you, thank and joining Nathan, for you, Thank today. us everyone,

early net for quarter typically maintain construction second when stride second adjusted the The is that quarter and record activity the takes momentum, and to revenue, that for in and our we EBITDA. XXXX. our fashion, hit off us year leading case was certainly income In record

a year record. million Our adjusted prior EBITDA of XX% increase the was from $XXX.X

delivering. and is are strong markets Our our team

we making a plan, metric our the benchmark a our business. detail adjusted as margin to like to a progress growth. Competitive minute. But I'll track ago, are the quickly, EBITDA planned profitably adjusted A generate key more in to I'd are we and plan our profitable year margin. grow that leveraging We we EDGE as EBITDA in on EDGE strategy highlight provide

hitting by margin adjusted full the XX.X%. goal was XXXX. We our year, at to initial early, EBITDA As achieve end goal you of years surpassed recall, a XX% last that X

June XX, basis EBITDA as improvement were XX.X%. a adjusted Now our XXX we from a just That where XXXX, year XX-month point trailing ago. is of margin is

We to execution Knife long-term shareholders. of toward is a team come EBITDA exciting members. in margin. I'm goal of adjusted XX% meaningful for make proud and our and progress very our together move work River strategy, hard the team our to continue the and forward our record quarter It the see

in we our the on Given of guidance these detail results us, share and few strategy EDGE will minutes. But additional first, like for I'd provide of our ahead just guidance financial have supported that some increased our about results. year. and a Nathan opportunities the factors our details driving to

quick drive growth. recap, implement stands improvement, EBITDA EDGE profitable Competitive growth margin discipline, plan began for As long-term XXXX we to is a to excellence. in the and EDGE

The first strategy. in E, EBITDA margin improvement our is a focal point

to are adjusted our We increasing committed EBITDA margin.

work. here primary objectives prices, controlling our optimizing Our and executing on successfully costs are

Let me highlights. provide some

the exception Aggregates for with quarter, are with each see all and Ready-mix. of momentum and pricing of the product core liquid discussed as prices in on During our geographic asphalt price calls. across expected up our We traction increases. continue segment we second we previous to see lines Year-over-year

to are high-single-digits X pricing So for increasing assumptions we lines. XXXX our for product those

each efforts pricing reinforce assumptions. To our product full year-to-date dynamic year during results support selling updated our the pricing expanded this mix have and average our by projected across the we Aggregates training for on optimization, we continued quarter, segment. was impacted While prices believe

higher-margin prominently our pull-through EDGE strategy, to the targeting In we that of our materials. upstream initiatives, pricing on addition continue to construction projects be day, materials disciplined bid most meet

operations. and to optimization cost identify share continue improvement across to teams, process our or pricing PIT work Crews our to control from Moving productivity, best and practices

number XX, standardizing the our our focusing expanded support services. business, excellence to commercial of have and aspects on including We all operations, of teams

have XX original site was PIT last still states our the XX% been across been successful. visits process, since of operations in The which has to X,XXX visited sites While These PIT launched in focused XX approximately date. have year. Crew, early it nearly improvement completed it's Crews resulted on which materials have opportunities, is

overland Let mining operations in to site recommended conveyor me XXXX, visited costs. trucking practices, and reduce eliminate provide of early successes. harvesting the including and Crew Medford a few the examples Oregon new aggregates In of these Southern installation PIT our an system

be our the capabilities, project We quality. recommended and improve $X that this Crews completed of process to XXXX, benefit a million. Later decrease waste Casper, be will over in equipment production to and change visited the reconfigured annual PIT in this increase and year expect sand-washing fourth quarter Wyoming

an We recommended annual is just to $XXX,XXX. the benefit a of waste. This products year, increase of back Portland, visited per and our to in immediately. approximately reintroduce site base few million benefit change ago into and in a Oregon, resulting provide expected And of be a months aggregate a sellable reduction core $X.X team expect byproduct approximately production starting the a large a to of rock,

of additional Crews operations busy reach far XX work improvements in and and from PIT the been the is out year. are the working They being extremely this second field Our to locations expect in currently half complete. have identify to

the like I'd for construction project disciplined contracting $XXX improved exceeding stay slightly quarter the hitting contracting securing and the teams additional Discipline. while bidding thank quarter services quality room bid. delivered. By our From margins excellent work continue EDGE, schedules embracing year. production to was for an work, originally second over D what last to they specifications higher at our to million same of margins initiative. quality-over-quantity work, our the in than teams and into for They period bid especially the Moving for field,

million profit contracting improved $XX our with in Along points. gross our quarter, margins improved services the that, XXX gross For by basis by year-over-year.

a very our expansion on contracting to our year-over-year and the Northwest generating acquisition our G will current highly comparisons River's and made are a adjacent operation last industry-leading strategy of margin such will X has we within materials-based on of and have anticipate opportunities. we this We at EDGE respected advancing to in Growth I'm leading is identify several our past we and EDGE improvements corporate operations. over be in our or some advancements of the operations through significant proud a overall success. The They region additional across quarry quarters. since as the purchase product the call team services amount our closed time. gross to experienced small prudently in stable contracting continue Looking now margins to moderation are short efforts. focusing made services possible the line these include we have deals a backlog, contributor Knife market areas, in continue development

current We us our bolt-ons in our grow our midsized XX many River in platforms to our that completed from history. to have markets. Knife that ranging small pipeline, has acquisitions deals operations adjacent in expand footprint acquisitions help current new strategically that our regions over support in

family. look Our choice combined with our some local and in opportunities I in Knife River as team, deal acquirer the as announcements these high-growth experienced relationships markets. we bring of midsized us to reputation, our forward position the

our excellent the everything EDGE efforts wellbeing in to which in includes do, to we team. our be and recap, of Lastly, highlight I'd safety relentless like our

the our people-first which is of heart of safe, progress keeping on We continue goal a being company. make at to everyone

is believe core focus maintain tools plans performance. of XX% people core on implementing our environment. Combined, value. We life outcomes the night our positive the quality safety will our providing Competitive adjusted financial first Keeping will and additional our trail. of our thing do culture that to and positively we believe trails EBITDA it and values our at our in EDGE multiple continue initiatives is each We impact team. firmly shareholders teams to to well-maintained the and of for We safety, our our this expect one people, and goal supporting our the of safety healthy, right is putting

to addition strong markets our for we taking, success. actions our backdrop year-over-year In the provided have are a

of integration low-risk strong publicly-funded with strategy Our upstream targets materials. vertical work pull-through higher-margin

needs from Jobs true, is being say formula to growing has our be and that At of Infrastructure yet in our obligated You've national level, and this infrastructure allocated. the fund heard continues it Act IIJA to markets. to work. before still federal funding the there's XX% and Approximately funding be Investment repair me support

that, expect of local to be proactive disbursed. On We from are benefit to continuing be state that funding top and it continues as infrastructure funding to projects. governments in

introduced our states demand pursue Xst, July legislation of record long-term lawmakers fund congested there's or at projects. are and states fair is near-record is As bridges. dedicated to they X in in for roads levels revenue to less Funding Knife solutions. It public River's XX safer, continuing construction and of have additional

current we our from well to and publicly agencies. needs backlog to XX% status The continue of with the will Approximately government support are dedicated We federal, bills. it. of those get monitor perform to funded and state done and local work positioned dollars is

gross a performance last increased taking by driven along at in increases closer Pacific, all maintenance segment quarter. expenses contracting Starting Now EBITDA services activity our This product improve look over improved revenue, year. primarily the geographic had and down in Ready-mix quarter, repair capabilities, and Northern was to profit production Hawaii and was California. Overall, additional driven on in by as particularly took margin to for Aggregates. lower gross related the increased for lines, we price each record our steps in Alaska. across we with

both demand, private Northern Looking public market in construction. to strong and see ahead, California our continues

We production up and EDGE XX%. bidding optimizing building plan set the and Northwest, are lowering to we'll year. see XX% Revenue keep continue EBITDA we pricing, was growth, focus costs. In on disciplined was the last up and records committed to our our we on

Our in well, XXX to improvement gross Oregon a in helping point Southern margin. are segment's Central the contracting Oregon progressing services drive basis projects and

growth as to southeast for and mentioned, during ] quarry to division of we ahead, bridge the suburbs for we the infrastructure. Portland. quarter centers, Aggregates in additional I projects recently provide data with see Also, region pre-stressed securing concrete a related purchased Looking [ growing this parking opportunities the garages

Moving to our Mountain segment.

EBITDA were activity. increased Driving record lines by and EBITDA benefit We product very and strong margins price on records increases points. to in contracting XXX basis We markets. all our continue had services increased from revenue these

on and Idaho you to ahead continues and deliver Montana work. our be are see the prepared center particularly Western some segment, can There markets substantial are additional with bidding project EBITDA our upside up we and and quarter, of Dakota, Our segment to rainfall South this disciplined $XX Minnesota, the data record strategy. weather well it. In June clearly a Texas. in Wyoming we bidding drive Iowa impacts work Central wind to and potential of strong see largely X% region for farm decreased Revenue wet helped this parts a Price million. in to had and increases, EDGE as solid XX% execution with heavy related of

year the of by are an into Minnesota, Looking seeing been Texas and initiatives. each infrastructure opportunities bidding funded we for remainder have in and projects adding ahead, Nebraska next increase year. the Iowa, statewide

second geographic our to had Services, a from segments strong quarter. Energy Moving we

above average, all records While Pricing asphalt all-time year financial lower were from costs. decreased last last from year's they well were for down results input across to as liquid due historic anticipated. markets

XX% decreased EBITDA the a While result from lower record, approximately input EBITDA those costs. steady held XXXX of margins as

I accordingly, good guidance our As will this visibility we mentioned his updated in into have calls, segment our last cover on which X Nathan remarks. and have

delivered Before to our working again quarter. I for safely. thank also We entire results like call turning while record this the would over to Nathan, outstanding team

have our hit as and for made generated significant on our independent company. we quarter, the During time, we EDGE In anniversary meaningful value Competitive that shareholders. progress a X-year goals our

Our strategy is working.

the We his now back the turn with just the and the in to started. I'll markets Nathan? over we're getting team call for plan remarks. right Nathan have right right

a position with our summary overview Thank begin of outlining then guidance. you, by of to capital the and an provide line increase product our XXXX I'll Brian. end results, our

for pricing dynamic million, XX% have margin lines closer continue an our raising profit profit compared to to we Asphalt confidence efforts, Aggregates, And we gross $XXX.X increase for at prior increased a gross consolidated ability year. of prices by core effective. high-single-digits the compared Average for X%, record quarter. Taking all and our our contributing to have X%; these prices. Therefore, to XXXX. from assumptions look as initiatives been gross further are initiatives the optimize saw EDGE a continue quarter we year to Aggregates Asphalt prices improvements Our product increase for Ready-mix Aggregates, Ready-mix XX%; selling price, our of to Aggregates in as benefit and and full

pricing product that effect year. mix We may Aggregates product overall less by the material for Brian lower-priced As have sold often mentioned, compared we this impact profit variations quarter the an impacted our solid to less was like of more year the to mix to gross quarter, and year. These prior this are have materials margins. as produce on a unprocessed contributor full but cost

X% X% to selling the price our of higher that improved While lines expect positive weather-related were to our for volumes average segment. for X%, and and Asphalt is volumes trend mixed up a it our is we and related the year-to-date capture result as up were up quarter. to for delays of in Aggregates in prices quarter, product continue. Volumes material unprocessed X% previously; the part in Central mentioned declined respectively, to our initiatives and largely part XX% Ready-mix

price over product profit. improvement line achieve cost However, each even though record helped declined, consolidated in volumes the us gross

total approach profit gross is projects saw disciplined directly work. backlog. Furthermore, our approximately to duration upstream with to months. margin day public and believe that of these services, lowers quarter year. benefit Of of our our infrastructure pursuing XX.X% funding risk within profile of to Moving our margins This substantially then completed XX% We bid pull-through providing to XX.X% less $X XX% lines. gross executing public while for compared related backlog million we $XX size XX% funding, last coupled XX continues from demand projects, reliable our increase higher product in our contracting on in are our second and of at and are higher the than our is also million backlog, the projects on and in

SG&A corporate Next, information I our consolidated to and like additional department provide expenses. would some on services

essentially Consolidated this. Furthermore, services seen We appreciate agreement up work team has departments at are as for gains transition managing successfully completed recurring same quarter as expected set by corporate truly operate assets. MDU to the standalone have efficiencies May needed costs we the our were year-over-year on these were sale the accomplish with the functions the XXst, and SG&A focused we in of $XX.X on costs. Resources expenses come lower finding offset our As increased have the we costs businesses. done for and our of to partially million all than

ahead consolidated expenses Looking corporate year. and the to with we remain in year, of prior half the SG&A our line second for expect

our the We $XXX credit our balance year. revolving to amount $XXX quarter ended Moving no million sheet. facility with million to last on compared drawn

X.Xx are sheet net With this well the support leverage Our an of second continued disciplined of we last use believe cash X.Xx compared to to positioned we quarter has contributed liquidity, year. growth our improved to balance strategy and in mentioned. strong acquisition that Brian

continue also to in reinvest our We operations.

invested projects, During projects approximately well organic spent as on we the of that majority are fixed of the increasing capital half first focused as capital. replacement on $XXX.X million with XXXX, return assets invested being on growth on

basis, industry-leading discipline capital for reflecting a and was ROIC Lastly, the our efficiency on the quarter trailing of XX-month XX.X% our deployment.

XXXX. the successful full remainder year quarter we ahead of the increasing we financial back year, the guidance As excited look a on and are to be to for look

raising $X.X to revenue of guidance are consolidated billion billion. $X range We to a

as well potential Energy adjusted And as $XX EBITDA million between million lastly, and to narrowing $XX geographic million EBITDA to million Corporate range to raising of includes excluding adjusted segments expect X% $XXX of for For X% million. This revenue, total adjusted Services acquisitions. any and at EBITDA, our we a and and $XXX capital guidance of Services expenditures consolidated future we are between million. $XXX $XXX

Aggregates Additionally, to average flat and Asphalt increase our We up XXXX for anticipate and be guidance Ready-mix includes pricing low-single-digits. selling high-single-digits the lines to following prices assumptions: to our product

of year. to down finally, for low-single-digits; weather, high-single-digits. And on to is Ready-mix the We mid- the expect to remainder mid-single-digits; normal and down volumes to Asphalt based operating guidance Aggregates and conditions economic down low- be flat to

We which what for are year. about record our stage have the quarter record excited helped expect another results, increased financial set guidance second be and very we will

EDGE of EBITDA like segments, our our For funding, these implementation increase adjusted year guidance for a given infrastructure growth. With geographic position committed Competitive initiatives, call the the opportunities XX% for adjusted our open that, and We XXXX midpoint to full questions. results achievable from represents our are market EBITDA. I'd of believe

from Brent Davidson question D.A. Instructions] your Company. be at Thielman first [Operator And will

Nathan, that a is more dynamic this through of or you're Brian of methodical quarter. guess, Great progression pricing the the as talk could you're across business. of more I might the first just careful, you little advancing regions approach sort the a in question, if strategy averages here. showing I visible know reported be of the

some in success just So strategy? be curious there's studies a you've examples seen or if case that

Yes.

as region, blueprint know, the that's Northwest Brent. the from So you

And what so We lot year. for rolling been in of about out region year. really, the early we beginning other last talked regions. we've are years, pricing X the dynamic of and we taken But out last the doing to the it this that that in we've rolled to Northwest a the innings

we of have additional know, that, We've job brought that Sandler done gone didn't in on team. our is market locations optimize in customer to our part of with as sales additional training of where We're staff team trainer we helping based as to a our have through out around because job So full-time excellence. some sales that we we're you them sales dynamic proximity our of pricing, some sites. our some to Training training hiring the out well those can as on and regions every pricing price maximize, pricing every frankly every to -- part commercial

and is And doing, current are the is to our where current importantly, single our in most out around are we locations. costs backlog doing. control But giving that proximity what truly every can quotes job to customers so day pricing our what

first the the in or the most in of ninth and or that -- the third probably So regions say, we've Brent, probably there inning innings, those today, I've Northwest second eighth region. in still we're in in we're I'd innings been still talked

great. the Okay. you That's EBITDA adjusted XX.X% -- Brian, margin And [indiscernible] mentioned

Yes.

target. -- I of you're towards gradually XX% guess sort as moving eventual indicated, you that

As however XX, sort target? are Brian, from what's do long next you from it still is, of beyond yet some think closer low-hanging get of kind you think here? cetera, you've that fruit, et XX months, your the you operational -- What from, do leverage edges XX, that internal initiatives, initiatives, about towards to XX% see of the what leverage you what

Yes.

Let's within EDGE. major initiatives the go through

to we last get said rolled in we XXXX. at when back May by So our Investor out can EBITDA EDGE year, we margin Day of XX%

Brent, originally anticipated. traction lot to so it then XX% taken had other And more them would EDGE. than And it it's of on into within we XX%, the a initiatives obviously, gets from some evolve

of contracting those honor the margins. At our a So doing the contracting and as dynamic our room begin rolling but services on our margin regions. quality-over-quantity 'XX. opportunities maximize seen time, EDGE we've in those some to in early services. of phases we prices that training, pricing the to that significant improvements related lot XXXX same to it bid we've the initiative given late we honor of began is prices out bid really And in was the room and immediately most our did in We

production in received identifying and throughout we're other with now So there. about to in practices, well going implementing the our again, we're off out rolling and amount It's process and reduce my teams. And can entire I'd our to in say that Crews, still upside organization. early out the we team. of costs been innings said started very a lines is, the I still up some we best early one prepared fair team. the that opportunities improvement product And we're remarks, and by And our there's like that the into talked innings that XX. We've PIT initiative where of

to from our is that from that's improvement. we're those months, get upstream specifically to that mean, growth. very which -- to I that targeting talked margin as materials at XX%, as you to far XX trailing will it to But higher-margin get where XX% continue And XX.X% much midpoint, our strategy that the to we're as to we know So today, relates evolve, include businesses. going about

of those are we our filling growth actively so pipeline opportunities. And

EBITDA those also have will the going thing then slowly our be also be we last do. relentless lines. that in margin And towards get higher shifting to we that profit product to to drive We everything help just margin. And that us XX% is that is mix excellent

So in are that of lot self-help do, EDGE overall, get, we a things we strategy. Brent, lot can have -- we of still go that to a

Stephens Next from at question is Inc. Grooms Trey

in you're Well But in to think on. quarter. and as know done really seeing the the improvement I that that? plays are have long-term EBITDA about that of XX% about the touch by how guys you design kind all part the for do of on out? of services. I contracting all guys kind and think contracting part margin potential the The the kind kind how laid of services, you this initiatives is of executing business, that of margin I wanted a nice targets you there And margin role

Yes.

just ago, the yes, it it certainly go look the gross path it's back still trailing margins. excited we -- forward path that at just I at XX% XX-month on go was 'XX, that was of very if margin of a contracting we flag. if services of on we've We end years X.X%. X.X amount our up are profit you And in to are So and the June, at XX.X%. end improvement you mean, made. and And to our marching

had so beginning XXX last And year. we've basis improvement since the of point a

of go majority you've a how do teams And incentives. that we where so can I Meeting materials bonuses project at execute mean, would But the can has got a asphalt in made And the room. give too. site have taken shout-out we compaction quality job our to very come our schedules, disciplined I get other we that. progress. delivering out where lot that, -- and And out the bid of that lot that, work. putting field I and a and mean, in of we've I a say approach down to

executed job can backlog work more we and gain you from peeling That well. work? the you goes is whether out subcontract and bid margins. profitable? And transition continue very time jobs them work onion jobs always and one how on most you we work time the over what to can fade our pull look at don't increase those look really And the a that work you do But execute have prime quality of We versus design. And on we our And by -- really that's that or quantity. or back backlog out perform at then maybe bid type to a record taking layer And higher-margin how do have the and I our to bid crews our at to just it them. you higher it those work. gone through margin materials that we today not that are looking mean, room is taking and of so now go and being more we on back said, and upstream

in those you've in overall foreseeable seen high-margin services proud strong record near and we pulling the right we It the be contracting or is funding. -- more with critical provides of see for DOT high-stream at that strategy, revenue. budgets upstream about our that they're an our materials and through future. levels those and So environment And role resiliency It our to of plays could organization is operating group. really a very now XX%

contracting services. in So going very on pleased with was what

services Or a did great are to quarter. mean, highlight lot look bit maintenance guys the continue margins could but well. of to Aggregates. around side Aggregates have cost also Should you I the then second. the here kind know you kind of job kind if the just of as color of into I kind of that? It back we gets doing half? a some on for as like color Aggregates attention, speaking But sounded impacted that and yes, repair outlook on for us overall And the And maybe Great. I in contracted a any give

Yes.

for gone benefit. these our having mean, out up I and is deployed Crews, costs repair certainly X,XXX maintenance As our longer-term improve temporarily PIT opportunities we've they've our go margins a

part there the to additional increase capital are recommendations is to and maintenance and facilities we're also maintaining So doing And some related of Crew longer-term bump we through opportunities PIT maintenance Crews are impact that, some going I how had immediate a now. uptime. And some in of larger, that I'd increasing change gone, improvements uptime. have the to But the repairs they our costs. have our almost and say had our PIT that our mean, repairs everywhere an as system

will very rest of Diesel Going forward, increases first tailwind of little we couple costs quarters. out comfortable say forward. as going the this been that's for of think leveling still in to it of far guidance our for as the has mid-single-digit inflation year. I be a feel just bit and kind a I'd neutral our business

right costs. our seeing we're now what that's with So

Thompson Research be Thompson Group. will question at from Next Kathryn

follow-up much quarter? pricing actions an from it Just How impact of or geographic mix mix versus pricing. the Aggregates clarification on one was in

Yes. is was product I the had mentioned and impact, The Kathryn, what Nathan mentioned bigger had mix.

you pricing way should is And so we have at -- year-to-date. look our

last now year-to-date year's And from up increase numbers. year-to-date so right X% about is our is

have same look dashboards. new through created visibility taking pricing? mean, got our that we've visibility are like-for-like so new sand a dashboards product at with pit with And out coming to really we that that good we've I doing We and of products, the what

guidance in why say materials. of a And that's sale product so Oregon on mix as our a had mean can that the that unprocessed we impact had XXX,XXX-ton absolutely large we've to sale. raised just And mix I well. have things, an can side of we would high-single-digits. I geographic like

the what sales slightly where additional lower be than Pacific regions on importing bring we the in as Central So region, North pricing some Hawaii. into region may materials Northwest is or their we're it in

Does the has bigger of impact. sense? mix. product quarter, so the material impact that for And sale make definitely that But unprocessed was that an the on

pricing segments of in Yes, on Yes. the in kind And that part about for versus you Really, out for factor? point discipline mix product, of upside the like you that and in Absolutely. like been better both margins better the just improvement your basis quarter. and let's how on understand Ready-mix quarter, it of Ready-mix know you've I just gross the clarify the other helping when is takes that executing no, much us of puts does. responded job Asphalt quarter? and margins earlier But Asphalt versus parse the good margins your in any progress some XXX

price lot less to and do had for Yes. Kathryn, we would a going of our average out. went XX% yardage XX% I mean, that increases. I our say it, with selling has price Ready-mix up

case of this And slightly. I gas. raising less have being have more our taken quantity the being natural Average and and great tonnage big definitely case, costs. And are be dynamic in quality and a obviously, customers job about could we liquid Asphalt. servicing in is costs more. And of is asphalts we Asphalt are with And we input through less we that jobs pricing of done by prices sales X%. up above said price a input your same our mean, went had on on and this function that's so over work classic selective that and of

they're doing. dismiss PIT day plants. it but implemented those full operations Asphalt The work a initiatives as some one best and to the facilities we and of well. is the Aggregates day looking PIT a cost the that when lot in each practices about of out Crews being half on at a wouldn't have Ready-mix also And our spend Crews, So are I pricing,

a and a costs. our strong dynamic pricing controlling of So function it's really

necessarily more all just is the in then quick one not delayed And the that Great. the question. feedback we're field Okay. that Certainly, volumes lost. receiving are follow-up and

how that wanted lost in on out on points terms about of that Just the particularly thoughts backlog? thinking delayed versus get you're things, you've and on the laid focusing some to of your just

say the Yes. June. that a I of would that wet in case that's the markets some very definitely had

us. should that So that's in Dakota, or that was materials is like some Ready-mix South Iowa Central which and whether we those upstream business segment those services, of for contracting and the that's been Certainly, Texas. then weather Asphalt for us, impacted month have Aggregates Minnesota, by on, both in working definitely consuming projects June of

I certainly think of some work that delayed. yes, been So has

projects I to think relates there's some as Asphalt. timing it of

you. would I that share think same I with sentiment So

there's on certain think certainly in the I of that. softening a Ready-mix, markets,

most that commercial whether projects. private the or residential As in consumed you of sector, know, is industrial Ready-mix that's

there being there and necessarily that so pent-up of is demand volumes for softening the And some good a to this residential get and commercial those is not that's news is delayed. But driving industrial going.

primarily So into some the forward being quarters. Asphalt certainly next on contracting services, pushed works

Next Tanners question from Research. Wolfe be at will Timna

follow actually outlook. the to wanted I Asphalt up on

wanted a of bit the along So more if of what color outlook? Asphalt in the some there are pushed out, And same commentary. those of why volumes seeing lower little just getting you're light just on lines, volume kind the

I think came lower PCA out forecast spending. a for with IIJA recently

more Just color. you some provide wondering could if

Yes.

by decision that park lower strategic our on of I'll to tune in but low-margin specific the the work X XX% to Central providing portable In volume example margin, the Asphalt those region, And frankly, work. of -- North a one almost of in more in road. is higher high-volume, early much were region. have locations aggregate that. of asphalt region So on made the go going part very North out year chasing the Central the And you design. stationary the I to asphalt and And give used in they plants mean, plants we team that

intentional, is I with more when Asphalt our spent business on that disbursed seen of directors in. forward half and be do information that PCA very that guide to we than so funding on going there's I've as and still funding the specifically. DOTs the local Timna, still that far would in states and we those IIJA get our the our And strong volumes we meet report. What seen we've ARPA and say as not that and from it's is

funding budgets DOT still to a and -- that really there's talk at our to states those IIJA at So that record a fix work built. I are And those level. record levels a the is lot enough infrastructure. have record DOTs to you of the and the close current transportation be not mean to very level, they're not they're

lots roads be helping We're of But because very new get the this should in pass bridges. states work do as so needed fixed the the those There's And we to active continuing. legislation in. bills. in

of the strong looking to services sure we to, in contracting backlog not see and but report strong exactly our you're DOT we just budgets funded markets see XX% continue there. and publicly So I'm our of is

our slower Okay. of to your kind lost Great. outlook to I and Yes, not point, [Technical Difficulty] reference but a realizations, think.

Just you the second question, might valuations looking at? environment. you of there be willingness looking you interest, I more X And can if provide? environment? normal? sell platforms like? M&A more bit I could, know adjacent talked to about different options. Can are dynamic -- what's Anything the on the than elaborate a What What on Is you little

very we assembled tell River this the We're the very million -- out that I've pipeline I well-respected that team on in high-growth bolt-ons Yes, pipeline we've million-ish XX ] at a of that's fragmented is opportunities, that [ made. and my for those That's to of opportunities to those continue We've focus lot areas. seen. there's to Knife working appreciate career bolt a into up. And #X we've market We've nice that recently-owned our you, family-operated opportunities are got pleased business $XX been healthiest the of can lot progress companies to our $XX filling mentioned reputable, is experienced, question. our midsized markets. years, excited development is I a our in existing bolt on. And priority with strategic

region within grow a the strategic to new that opportunities be regions, area. we a market have may Within in

teams in, at current management small currently our relatively look business do there also a that of states some us other Texas and have states then are there's expand that adjacent to for structure. And with opportunities we to footprints region joined footprint current in in we states the of or under so in our you footprint. the And some current those and our

in would existing adjacent Timna, tell that I states we're states. one our be looking states, would where of giving would any specific XX just we're be contiguous, information, to So that you at without and

in all And of mentioned. our deals really that's different we've those strategy. got I markets So the in pipeline of just all sizes

Garik Capital be will question Loop from Shmois Next Markets. at

I part quarter. of project I Pacific the on you your much and know in centers to the wins talked garages a new Northwest. smaller construction know private in some parking Congrats is seeing exposure. to speak could that looking at But opportunities market I outlook, projects maybe some the end wondering in you're private? you of was you're when what bidding And if the the on? data

Yes. Very specific, pre-stress. to Garik,

in new capacity some last we little it's and we than have great. up bit got doing Washington, that anticipated costs it's is It's and we it's and than more are had a We year facility that our operating and thought. Spokane, got running commissioned better

going public parking the our to facility a is in whether private of Oregon. We for lot centers. wall data And so other that's our -- it's in panels And infrastructure of great garages, then for work. projects. do business then the parking We A Eugene, or Spokane. provide is And bridge DOT near garages. providing girders big those part

or from So specifically directly to market, or and you a steel we transferring pre-stressed. when to owners cast-in-place opportunities. you're lot with or precast the of time some take a the still private job engineer These have to work transitioning

design we months utilize And to several help projects our products. so our on paid get and these working engineering contracts team and have been for have of to

in Wyoming We've we projects. of And that plant are in Oregon opportunities. supplying markets, Oregon, batch there some Idaho, data portable still centers those got concrete so to see

strong that infrastructure bridge and more see the girders the and garages on a opportunities market So has still a been work us lot of the data for parking to then there. very continues centers. And of

the Okay. on to pricing. making to That that sounds you're up follow with just wanted respect good. dynamic progress And

your mentioned maybe this you think outside some far Northwest. put point regions well, as in to expected little the rollout? forward in going faster, a bit the line it's the than if in third to as you I you time that be of in as you're this Is little where expected context at -- that inning most a help point? where you're as at Just at

Yes. a progressing a different bit dynamic I little to how with of would say comes it spot every region pricing. they're is when

or and to certainly and the of dynamic a we increase letter dynamic pricing doing the way systems structure that dashboards playbook possibly where, third sending to those and there's a are midyear teams the in had inning. There's lot it. in software have not And really from so in place an out have that of help regions again, place place price the where excellence go of and run and in adding and did And that in process able some in up probably They the place the additional increase. your implement teams in us other fourth pricing. commercial point-of-sale to structure traditional they in had pick regions a regions putting annual we're place or infrastructure with that that were and training sales

would our the for So say, go continue lot that to to Garik, what opportunities markets. most I we optimizing is have a of in forward us materials of pricing in

I all that think I it. you region. But progressing all in they're they've What would the in well. tell frankly, we Northwest still the even opportunities markets, is have embraced

materials that. on pricing resistance Our team very very way have new no of our received And to customers that and positively. little we've gotten

that on every what getting know they're knowing They be think call project current got be concerned prices midyear what going going is their just their whether are to and pricing. out or build. customers a on appreciate a not get I to increase particular to cost first be not. not go or they They've our give and the job to us

[Operator be Ian your will Instructions] Zaffino at next And question from Oppenheimer.

type answered, of my Are help seeing, letters, pricing, understand kind questions just lot but guess, kind semiannual pricing of of A have back give go the Can bucket what's increases? you pricing, I dynamic? if us on Or to you they and there price similar it? us of could of are to color any each I kind type were the you to seeing of driving wanted here. been what you maybe

Yes.

is, which mean, So is sir, still our near-term the mean, I is products. know, demand I I for what strong

from influence we infrastructure on we a and heavy benefit lot. have so spending that a And

sell And keep demand of remains do in And good. I one downstream Aggregates is That's we so about the our to is demand XX% strong. thing businesses. mind, our know

we're where the #X Aggregates. we markets is know position I a or in market thing #X of selling other XX% The have that

be a that at allows our you were is also dashboards high-single-digits. taking this so selling like-for-like PIT PIT compared same a got, for from to from And year what product market-leader. I one know at we've look same that us to that product if that we materials,

Our year-to-date numbers are high-single-digits.

guidance, with And feel we comfortable being with our region and Nathan so the our presidents, assumption I, high-single-digits. of along

You're looking foundation the those again, I America's infrastructure. infrastructure. our lot term. need fix it's of go it literally think, of longer to And mean, a at I rock fundamentals, we

without pave can't You build asphalt bridges runways mix go or or make Aggregates. produce or concrete

And so the fundamental demand -- underlying is the term. long there

know, a and nonrenewable permit. a difficult it's resource. As to resource depleting It's you they're

future. I see strong those that with gives forward those depleting. going continue momentum for nonrenewable kind the see pricing is that going that And really a a conviction variables so don't to and I foundation me foreseeable things, to of the strong of resource see it's And of The we're it changing. demand it the infrastructure. is is any

momentum Aggregates I And strong forward. see in going so pricing

larger seeing you Would as And of do on the about kind one help markets? a on competitors and as multiples what how another one And your us of also deal Okay. M&A. did. Maybe go you that deals, also are then multiples feel know size you're recent large of transactions? just was understand far there I into

stay out of negotiated and of owner -- our a We directly strategy we definitely that or is an deal. target part the opportunities broker can auction be with

as multiples companies. can we're higher well midsized certainly could involved our brokered very of part are those imagine, we of and being high-growth Now larger typically, we And with platform includes in some markets, negotiating auction. those acquirer those that those ones companies that of being be be driving the that are pipeline a that logical you of are said, an than part would

say range the logic could deal strategy so Every has multiples, I its own deal I of it's mean, is a I mean, broad unique. range. literally X mean be I there's it. would XX. a from And to just to XXx. Every

relationships we're already really have deals there's you, we bidding having be where saying would majority And and higher. our and tell And we conversations can local those the that little been what with so a the but in pipeline, those of those on multiples those way no be that are longstanding family-owned we we've owners. deals target of multiples what's seeing. I'll brokered bit larger some again,

at And registered. appears time, it we no Gray, have Please proceed, questions other Mr. sir. this

proud excited Okay. of increasing We're record us year. our guidance for you and today. to Well, joining the quarter thank again be for

to long-term make our turn our EDGE to now over company call we the the we'll and We on deliver operator. are back for and continue appreciate good We well-positioned shareholders. our value goals progress and and Thank grow interest to support you. the

Thank Once disconnect you, today. sir. for for do you call Ladies conference please again, your you conclude attending. does and gentlemen, indeed And that thank this we ask lines. at your this time,