Garrett Greenblatt

Garrett Greenblatt asked for a more detailed quantification of the impact of 2025 acquisitions on the 2026 outlook and the underlying organic growth assumptions for the year.

Answer

Brian Gray, President and CEO, explained that the full-year contribution from the TexCrete acquisition in 2026 is expected to offset the seasonal losses incurred in Q1 2025 from the Strata acquisition. He indicated that the year-over-year growth could largely be considered organic, implying about a 9% growth rate for the organic business, with Oregon remaining flat and other regions growing in the mid-single to mid-teens range.

Garrett Greenblatt asked for quantification of the impact of 2025 acquisitions on the 2026 outlook and the organic growth assumption for 2026.

Answer

Brian Gray (President and CEO, Knife River) explained that the full-year contribution from the late-2025 TexCrete acquisition is expected to offset the seasonal losses incurred in Q1 2025 from the Strata acquisition. He stated that the 2026 guidance effectively implies organic growth, as no future acquisitions are included. The midpoint guidance of $540 million Adjusted EBITDA implies about a 9% organic growth rate for the overall business. With Oregon expected to be flat, this implies 14-15% growth for the remainder of the business (Central, Mountain, Legacy Pacific).

Garrett Greenblatt asked about the specifics of announced cement price increases in current letters and the historical realization rate for years with low single-digit volume growth. He also questioned the progression of wallboard demand trends through Q4 and any momentum into calendar Q1.

Answer

CFO Craig Kesler detailed that cement price increases were around $8 per ton for most markets (excluding Texas and the far west), with timing between January and April 2026, emphasizing regional determination. He noted that calendar 2025 saw volume improvement, boosting utilization, and expressed optimism for continued volume growth in 2026. For wallboard, Mr. Kesler indicated consistent demand trends in the second half of the year, reflecting a meaningful drop, and expected similar trends into calendar Q1 2026, accounting for winter issues.

Garrett Greenblatt from JPMorgan Chase & Co. asked about the specifics of announced cement price increases, historical realization rates for low single-digit volume growth years, and the progression of wallboard demand trends through the fourth fiscal quarter and into the first calendar quarter.

Answer

Craig Kesler, CFO, detailed that announced cement price increases are around $8 per ton for most markets (excluding Texas and far west), with timing between January and April 2026, emphasizing regional determination. He noted that wallboard demand trends were consistent with a meaningful drop in the second half of the year, expecting similar trends into calendar 2026 despite winter issues.

Garrett Greenblatt asked about the future of the Magnesia Specialties business, specifically its importance for M&A and its potential long-term scale within the company.

Answer

CEO C. Howard Nye described the business as an 'important' and 'additive' part of the portfolio that will never be 'huge' but provides high margins, strong cash flow, and cyclical resilience. He indicated that while bolt-on acquisitions are possible, the company will remain firmly aggregates-led.