Good morning, ladies and gentlemen, and welcome to the Knife River Corporation Third Quarter Results Conference Call. [Operator Instructions] Also note that the call is being recorded on Monday, November 4, 2020. And I would like to turn the conference over to Nathan Ring, Chief Financial Officer. Please go ahead, sir.

Thank you, and welcome to everyone joining us for the Knife River Corporation third 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. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. For further detail, please refer to the legal disclaimers contained in today's earnings release and other public filings, which are available on our website and the SEC website. Except as required by law, we undertake no obligation to update our forward-looking statements. During this presentation, we will make references to certain non-GAAP information. These non-GAAP measures are defined and reconciled to the most directly comparable GAAP measure in the appendix to today's presentation. These materials are also available on our website. Brian Gray will begin today's call with a high-level overview of our third quarter 2024 results, followed by an update on our competitive edge plan and a segment recap. Following his remarks, I will provide a product line summary, a capital update and a review of our revised 2024 financial guidance. At the conclusion of our prepared remarks, we will open the line for a question-and-answer session. With that, I'll now turn the call over to Brian.

Average sales prices of aggregates for the quarter improved 7.6% from 2023. We rolled out new tools and training across each region to emphasize our dynamic pricing model and track progress. We see pricing momentum continuing into 2025, and we expect to benefit from price increases exceeding costs. At the same time, we are finding efficiencies and improvements at our plants. Our process improvement teams, or PIT Crews did 26 plants in the third quarter, continuing to identify opportunities for us to remove production bottlenecks, increased plant capabilities, improve uptime and control costs. They have now been the 58 plants in 2024, standardizing best practices, developing field training and building on the momentum from last year's success. Our local management teams wholeheartedly support our PIT Crews and feel there's significant margin expansion opportunity to be realized from this initiative. While the material side of our business was busy optimizing prices, finding efficiencies and sharing best practices, our contracting services teams were actively pushing margins in the bid room and out in the field. Gross profit margin for contracting services improved 120 basis points in the quarter compared to last year. We continue to bid strategically and find opportunities in the field to successfully execute on work and maximize margins. The third quarter is our busiest of the year, and I'd like to thank our teams for their hard work and for truly doing a tremendous job. For the sixth consecutive quarter, we have seen year-over-year contracting service margins improve. This dates back to the launch of our Edge plan, and we could not have accomplished it without fitting discipline, job execution and our dedicated construction crews. Price optimization, cost controls and margin improvement are key components of our Edge strategy, so is growth, both organic and through acquisitions. We have…

Thank you, Brian. I'd like to begin with an overview of our consolidated results and product line performance, then provide a summary of our capital position as well as capital allocation priorities and then by outlining our updated 2024 guidance. As we look at our consolidated results, we reached another third quarter record with revenue increasing to $1.1 billion. This includes record revenue at our geographic segments. We are proud of these records as our operations continue to focus on higher profit and higher margin work. This is further demonstrated by our record gross profit of $273 million for the quarter, driven by a 7% improvement across the geographic segments. Adjusted EBITDA was down for the quarter due to the expected decline in Energy Services as well as higher SG&A costs. SG&A for the quarter was $64 million, a $5 million increase over the prior period. Approximately half of the increase was related to acquisition costs that Brian mentioned. Looking ahead to the fourth quarter, we anticipate a similar increase in our SG&A expenses of $6 million, primarily from due diligence costs currently in progress. Moving to product line performance. Our core product lines continue to benefit from the adoption of our edge initiatives. Aggregates, ready-mix and asphalt have all seen healthy pricing improvements for the quarter and for the year. Year-to-date, average selling prices for aggregates increased 8%, ready-mix 10% and asphalt 2%, driven by our dynamic pricing effort. With the continued adoption of a dynamic pricing across our footprint, we are confident in our ability to optimize pricing and profitability beyond 2024. As anticipated, our initiative to capture pricing over volume led to volume declines across our product lines for the quarter and the year. Year-to-date, we have seen aggregate volume declined 5%, ready-mix 10% and asphalt 5%.…

[Operator Instructions] And your first question will be from Kathryn Thompson at Thompson Research.

Solid geographic performance in the quarter. And you noted that the quarter saw a EBITDA gain just from your geographic specific performance. How did EBITDA margins perform in Q3 for your geographies? And how has that trended year-to-date?

Appreciate the question. Yes, so when we talk about geo segments, just a quick level set. We're talking about the Pacific region, the Northwest region, the Mountain region and the Central region. And that houses all of our products other than energy services liquid asphalt. And so that includes aggregates, ready-mix, asphalt contracting services in all of those geographic segments. And so you're right, our EBITDA was up 6% for the quarter. And within that, if you look at our EBITDA margins in those geographic segments alone, actually improved 90 basis points for the quarter. If you look at for the full year for through 9 months, our actual EBITDA contribution is up 15%, and the EBITDA margin in those geographic segments is up 170 basis points. And so we're both performing on the EBITDA and EBITDA margin at that geographic segment. And obviously, that's been partially offset by the headwinds that we knew about at Energy Services coming into this year. So performing very well in those geographic segments and all of the major product lines.

Okay. And a follow-up and more of a clarification on some of the growth initiatives in the quarter. What are or not included in terms of the type of assets acquired. And you noted that the increase in SG&A was related to M&A and health care cost. If you could segment what was M&A related versus health care related.

Yes. So just to clarify, so year-to-date, we have purchased about $129 million of new companies that consist of 6 companies. Two of those were back in the second quarter, the White in Bakken, the Graves Operation. In the third quarter, we closed on FP Marks and Sons, an aggregates operation in Central California. And then as of late here in the fourth quarter in October and November, we closed on the sand operation there in South Dakota Rock products, which is a quarry in ready-mix operation in Central Oregon. And then just over this past weekend, closed on the assets of Albina Asphalt. It's got the 4 terminals, 1 in Washington, 2 in Oregon and 1 in California. So we have continued to be focused on aggregates-led materials-based companies that are within or adjacent to our existing markets, which are those midsized, high-growth markets. You're right. We did have some additional SG&A expenses this quarter. And I'll just let Nathan touch specifically on the SG&A bucket that you asked about Kathryn.

Kathryn, thank you for the question. Yes, for the SG&A piece, the corporate SG&E piece, it is up 8%, as I shared in the prepared remarks. About half of that relates to our acquisition costs, as Brian talked about. The other half does relate to health and [indiscernible] claims that are higher in the quarter. And it’s probably important to note that as we look at the third quarter and going forward, we really are now comparing like-for-like. What I mean by that is if you think back to last year, third quarter, that’s when we set up these departments that were previously provided by MDU. And so we have those set up successful with that coming in at lower-than-expected costs. So now you have a fair comparison year-over-year, but we are up it really is of that 8% split between those 2 main categories of acquisition costs, about half of that and health and wealth are about half of that. As we look into the fourth quarter, as I shared earlier, probably pretty comparable to that in terms of about $6 million compared to the $4 million in the fourth quarter of higher corporate SG&A costs. Most of that relates to the acquisition costs that we’ve been talking about that is due diligence for the quarter, some integration ’osts for the acquisitions we made here in the beginning of the fourth quarter an’ the end of the third quarter. So Kathryn, hopefully, that helps you give you a little more color on the split of the SG&A, both for the third and fourth quarter.

Next question will be from Trey Grooms at Stephens.

So on -- I guess I wanted to touch on the guide. If you kind of look at the aggregates, the volume guidance there, the ready-mix volume guidance as well have both been taken down a little bit from where they were. I think volume now is mid-single digits that you mentioned, and I think it was low single digit -- flat to low single digits in Ags, and then low single to mid-single in ready mix. Can you talk about some of the drivers there? I know you're clearly pushing pricing over volume, but then you also mentioned maybe some projects being pushed out. If you can help us kind of dissect some of that, and I'll just start with that.

No, I appreciate that. And you're right. Most of our volume declines this year, Trey, have been intentional you take on quality of work over quantity, and that has had a big part of that. And we have -- we've done a lot of the difficult work, the hard work of resetting our customer base and really narrowing the type of projects that we are bidding. And so as we look forward, going forward, a little bit in here in the fourth quarter, primarily into next year, really, we need to level set and look at the year-over-year comparison and a lot of that hard work is behind us. For instance, we've got 2 portable asphalt plants in the central region that previous year, last year, was out chasing some of that higher volume, lower margin work, and we've parked those plants in stationary operations, and they're literally doing about 300,000 tons of less volume this year compared to last year. Well, those plants are going to be parked in the same pit next year. And so that year-over-year comparison going forward into 2025 really is going to be a new level set that we're looking at. And so -- most of the [Indiscernible] claims have been intentional. And we've been very close to our guides on that. I will say that there has been some timing of projects, some larger impact jobs that we had last year that we did not have this year in the third quarter. Some of those that we thought we were going to have in the third quarter have been pushed out into next year, a fairly large windmill project in Wyoming. And just -- if you look at how we started the year, we came out of the gate very fast. We had…

Okay. All right. That's helpful. And I guess it's -- is it fair to say then that the revision to the volume guide is the -- is more on the kind of the end market or actual demand side of things softening incrementally versus the competitive landscape becoming more difficult to push price or anything like that. Is it -- is that a fair assumption because there was kind of this reduction there trying to figure out how much of that would really be due to you guys taking a more -- or maybe it even becoming more difficult to push the price than it was before.

No, I don't think it's more difficult to push our price. I think what you're seeing is -- I mean, so through 9 months, I mean, through the third quarter, our volumes are down 5%. And we've kept that for the rest of the year, 5%. As you know, our fourth quarter because of our seasonality, does not -- is not going to push those numbers directionally very far from where they currently are sitting. And so really, I think that year-to-date, our guidance that's built in for the full 12 months is very reflective of where we sit today after 9 months. And frankly, after we sit -- we looked at our October sales and feel comfortable that those volume guides are for the full year, knowing that the fourth quarter has very low impact of where we sit year-to-date.

Okay. That's helpful. And then on acquisitions, I mean, clearly, you guys have stepped it up and several acquisitions over the last few quarters. Can you talk a little bit about how those fit into the longer-term strategy, how they fit into the dynamic pricing? And do they help do they help in those efforts? And then any color you can give us on the contribution we can kind of back into the EBITDA, given what you've -- the multiple you gave us, but any other details around that would be great.

I appreciate that. And so yes, we're very excited about our activity. Those acquisitions that we executed in the last 9 months, 10 months now. Very excited about the pipeline. It remains full. Our team continues to be very active and working on due diligence this quarter. And so very excited about both the pipeline and the deals we've gotten across the finish line. Those deals are exactly what we've said that we wanted to do our materials-based aggregates led in our existing markets. And so the majority of those are those smaller deals that we are very good at acquiring and integrating and capturing those synergies immediately, which includes our ability to do dynamic pricing. So if you look at the White Bakkin and Grays and EpiMarks and Sonsand the Parker Pit and the Rock Resources, I mean all of those are heavy on the material side, adjacent. I mean, well, they're not adjacent. They are in our existing strategic market areas. And so yes, those will complement our continued efforts as we implement dynamic pricing and other synergies that are right in those existing markets. The one over this last weekend in Energy Services is a company that we've been looking at for quite some time. It's -- as you know, as you've seen in our performance, liquid asphalt is one of our better profit margins businesses. And this happens to be in one of the areas where we consume and use a lot of liquid asphalt in a region, the Northwest region, having terminals in Washington and Oregon of one of our highest profit regions that we've got EBITDA margins. And so yes, it will definitely complement our vertical integration, as it relates to our asphalt and contracting services. So Albina is going to be a great addition to our group of family of companies. So very excited about it, Trey. Operator Next question will be from Garik Shmois at Loop Capital.

Wondering if you could speak to in a little bit more detail just your observation that you expect pricing to remain above costs moving forward. As we get closer to 2025, any thoughts as to how you expect pricing and costs to track next year?

So yes, directionally, I can just share kind of what we've mentioned in our prepared remarks and we'll be giving a more detailed formal guidance in February. But the demand -- the fundamentals are still there. You look at our backlog. I mean it's up and overall. And you look at the funding levels at all the state DOTs and the local public works departments, and we sit down and talk to some of those directors in the states that we're working in and the budgets are strong. And so the demand environment is very healthy. And the challenges that we had this year in our volumes was really that fundamental change at how we're looking at work, what jobs we're bidding, which customers that we're doing business with. And we really needed to reset that as part of our quality over quantity at the same time of raising our prices for materials in those high single digits. So we see that momentum carrying forward. We talked about that hard work of resetting our customer base and narrowing the projects behind us We're going to maintain a very disciplined approach to bidding and continue to have our quality over quantity. And we do see that we -- we're still in those, I would consider early innings of implementing our dynamic pricing and the more sophisticated rollout of our sales training and dashboards that we're working on. That's all still in play. That self-help is absolutely something that we're very focused on at Knife River. So directionally, we feel like volumes are going to be more reflective of the overall market, and we think the market is very healthy by looking at our backlog and DOT budgets and that the pricing momentum coupled with the efforts that our pit crews have been out working on and really uncovering, Garik, is that there are some opportunities for us. And I think if you talk to our local management teams, the boots on the ground out in these operations, they would tell you that they think there is more upside in margin expansion from our PIT Crew activities and really focusing on our production costs and reducing our downtime. And that's as much of a focus as dynamic pricing has been. And so all that to say that directionally, we feel very comfortable, confident next year that we will see a regain in volumes and that our pricing discipline will outpace the costs.

That's encouraging. Then just 2 volume follow-ups. One, was there any weather impacts in the quarter just given it's been such a theme here over the last several weeks and earnings season. And then just a clarification on the revenue guidance. You kept the midpoint unchanged. Is it fair to assume that the acquisitions in the fourth quarter are kind of the offset for the lower lower volumes.

Okay. Yes. So we absolutely I mean we have operations down in Texas. And as you've heard from the last week, it was very wet, very bad weather down there. So yes, I mean, we -- our sales that we had forecasted when we updated our guidance at the end of the second quarter, did have an impact from lower sales out of our Honey Creek facility. And just overall operations, both ready-mix and contracting services, asphalt production down in Texas. It's not a huge piece of our portfolio, but absolutely, it had an impact. And so that did play into our lower volumes for the quarter. And so as far as guide on the acquisitions, Nathan, do you want to take that question?

Yes, Garik, I think your question was along for the revenue guide. We do have that still at at the same midpoint. And so the question there acquisitions, do we see revenue in the fourth quarter. Really, as we talked about a little bit in the prepared remarks in the fourth quarter for us when we bring these deals on, oftentimes, this is towards the end of the year, the off-season for us. So the revenue related to those acquisitions would be nominal in the fourth quarter.

The next question will be from Ian Zaffino of Oppenheimer.

Wanted to ask you on the M&A front. As you're looking and as you're talking, how do we think about maybe the mix of potential acquisition targets that you're looking at? Is it going to be more services, materials, if so, what type of materials is going to be vertically integrated? Maybe any color you could kind of give there so we know where the business is heading.

Thanks, Ian. Yes. So we've got a slide in the deck that kind of shows what our pipeline looks like, both in deal size and markets, but I'll talk specifically about what product lines that we're looking at. And so Ian, we have a robust pipeline with frankly, deals in every part of that pyramid from the smaller, less than $25 million deals, the deals that are in excess of $200 million. And so we are -- those are in our pipeline, and we currently have due diligence completed on a number of those. In the markets, we absolutely, again, continue to be focused on those markets that we're currently in or adjacent to one of our existing states. And as we've discussed in the past, oftentimes, if you look at the markets that we play in, that our local competitors are typically those regional family-owned, vertically integrated type of companies. And so contracting services does not at all scare us. In fact, we look forward to those types of opportunities because of the pull-through of either their existing aggregates that come with the deal or that we can supplement and complement with our existing operations. And so I would say that the pipeline is very diverse, both in project size. I can tell you that we have deals that we're looking at in every one of our regions, and that we've got deals that have one of our product lines, whether that's aggregates, ready-mix, asphalt contracting services, as you saw over the weekend liquid asphalt, all of those are in play and that they all are in our current pipeline with really an emphasis as it has been with our edge strategy all along is to continue to grow those higher upstream material -- has a higher-margin upstream material businesses as -- with aggregates being leading that pack. So that's kind of a glimpse into our pipeline and our strategy.

Okay. And then I guess we're kind of touching upon a 20% margin in this past quarter, obviously, it's a strong part of the year seasonality. But how are we thinking now about that 20% margin, both in what you've been able to generate? And then margin expansion you're looking to do, but then maybe offset by some of these higher SG&A costs and some other costs.

Yes. Well, I think we continue to be very pleased with the progress we’re making with the edge initiatives. We laid out that we wanted to be at 15% by 2025, and we achieved that goal 2 years early. If you look at our year-to-date performance, we’re up 50 basis points year-to-date overall. And obviously, we’ve had the headwind that we knew about in Energy Services. If you take out Energy Services and look at the geographic segments, I mean, our EBITDA margin improvement for the 9 months has been 170 basis points. So we absolutely feel committed that 20% target that we’ve set for our long-range goal is achievable. I can tell you that all of our initiatives internally are geared to drive towards that flag of 20%. We’ve talked about there’s multiple paths to get there. We’re focused on all of them. Growth is a part of that. Our PIT Crews is a big part of that, continuation of dynamic pricing is a big part of that. And so we’re looking at all regions, all product lines. And yes, we are committed to that 20% long term, knowing that we continue to make progress this year and have made tremendous amount of progress in the short amount of time since we’ve really rolled out the Edge initiative. So very focused on that, Ian.

Next question will be from Sherif El-Sabbahy at Bank of America Merrill Lynch.

I just wanted to touch on capital allocation. You noted that the M&A pipeline is quite robust and diverse. But with leverage as it stands well below the long-term average target and substantial cash on hand, should we think of that is earmarked for M&A that you have in the pipeline, or is there any shifts on the margin with regards to capital allocation priorities?

Yes. Thank you for the question. So first of all, again, very excited about what we’ve seen here in the third and fourth quarter with where we’re putting our dollars and putting those to work with, both maintaining our assets and improvements for them and then as well as the growth that we’ve got identified. So the question being, do we anticipate any shift in where those dollars will go to with what we’ve got as far as net leverage and cash on the balance sheet. As I mentioned in the prepared remarks, very strong position for the ompanyy to put those dollars to work in both of those categories. So what you’ll see going forward, most likely is for us to continue to maintain our assets in those improvements, and we’ve indicated that, that’s 5% to 7% of revenue for the year and then also looking to grow. We mentioned the $129 million for our acquisitions and then $20 million for organic, incremental to that. So for the fourth quarter, if we hav’ additional acquisition’ coming In, that would be incremental to the $129 million. As far as shifting to capital returns, cash returns I think the best dollars for us to spend are those on maintaining our business and growing our business with the opportunities we see forward.

Next question will be from Chris Ellinghaus at Siebert Williams Shank.

Brian, can you just talk about the Northwest backlog? And what's contained in the decline, is it timing? Is there some product mix? What's going on there?

Yes. So we had a large impact job down in Southern Oregon called the Foothills project. And so really, if you look at our last year's backlog, it's the one that's abnormally high. You look at where we were at in '22 at the end of the third quarter or '21, we're actually higher today than we were in those years. And so it's not alarming that where our backlog is at. I think as we're comparing it to a year where we had a large impact project down in Southern Oregon. And so I think our teams are very focused. The work that we've got is very diverse in the Northwest region. And we talked about before, Chris, we have that unique ability to flex between the private and the public work. And we also have a lot of work right now coming up out of our prestressed facilities. And so nothing over alarming on where we are as it sits today on backlog.

Okay. Do you have any color on when this Wyoming wind project might come back around?

Yes, it's not been canceled. It's just been delayed. We thought we were going to start some aggregate production and supply in the third quarter. And typically, in the fourth quarter, that part of the world, you're not doing a lot of work anyway. Sometimes you might get a little bit of work in there, but it's really just been shifted into next year, Chris.

Okay, sometime next year. Nathan, can you talk about in the M&A what's your funding strategy? And what are the target seeking in terms of compensation?

Yes. So our funding strategy really does relate to 2 areas as of now. As we've talked about, first, we've got cash on the balance sheet. We started the year with $200-and-some million in cash. We produce cash flows from operations. I think you can use EBITDA as a guide for that where we have utilized a good portion of that for the 2 buckets I talked about earlier. So anticipating ending the year here, absent any incremental acquisitions we do, with cash on hand. So that would be 1 funding source. Ended the quarter at 1x net leverage, our target there is 2.5x. So again, having that availability of utilizing the balance sheet and debt to grow. When we look at other options and that if the deals were large or if the owner was interested in that, that's a hypothetical, we potentially would. But really, our funding sources would come from cash sitting on the balance sheet, but that to work and then moving towards our target of 2.5x as we grow our acquisitions.

I guess another way to ask the question. Historically, you've done a lot of these family-owned businesses, right? There must be some tax considerations in how they're seeking to be paid. Are they looking for any stock in their transactions or other tax advantages?

We have had instances in the past where we have done deals that some owners have interested in stock. We have accommodated that. So if there was an owner that came forward with that interest again, we would take a look at it or if the deal, but we'll certainly be looking at the metrics of the transaction to make sure that it makes sense for us. But yes, there are times when that makes sense. And maybe for them too, to have a continued interest, if they're part of it, the deal going forward to see how we perform and benefit from that as well. So yes, Chris, we are open to that also.

Okay. One last question. About the due diligence and M&A fee expense portion of the last few periods, have you considered excluding that from your calculations given that they're sort of irregular and sort of non -- I guess just not -- they're not regular. So have you thought about excluding them from your adjusted numbers?

Yes. I think if a deal was transformational or there were certain adjustments that need to be made for GAAP purposes, we would maybe consider doing adjusting. For the deals that we currently have, those are right within the size that we would expect, as Brian mentioned earlier, and so for those, they're recurring, as we take a look at the rules. And so for those, we have not done an adjustment, but Chris, going forward, depending upon the size of the deal, we take a look at that and of course, communicate that to the investing public as to why we're making that change of that adjustment.

Same as, I presume, of your thoughts on transition costs.

Yes. So like there’s – if there’s integration, I think what you’re getting at there, Chris, if there’s integration costs or something with transitioning to – bringing one of these acquisitions on board, it would be encompassing to not just be, for example, third-party due diligence, we would look at what the total cost is associated with that acquisition.

[Operator Instructions] Your next question will be from John Ramirez at D.A. Davidson.

Looking forward, do you mind walking through perhaps your 5 -- 4 or 5 large states and seeing where some of that growth for 2025 will come, and where do you see some challenges, perhaps in context of DOT large projects being announced as well as some of your initiatives of looking for pricing over volume?

Yes, John, I appreciate that. And so I can tell you that's an easy one at the end there, is we're looking for price over volume and continue to roll out our dynamic pricing in all of our states, all 14 states. Obviously, the Northwest region is the furthest along in that initiative. But we are rolling that out in every of our -- all of our product lines, major product lines, aggregates, ready-mix and asphalt in all 14 of our states. If you look at specifically contracting services, we've got a slide in our deck on backlog. And the Mountain region continues to see a very healthy bid letting schedule. They're they've got 12% more backlog than they had at this time last year. And those in particular, are looking very strong as a lot of the central states of Nebraska, Iowa, Minnesota, Texas, those have very strong DOT budgets. I mean if you look across the entire country and including all 14 of our states, I mean, they're all at or near record levels. I mean there's going to be timing of DOT budgets as they work through some legislative issues and up their funding in states like Oregon and so there could be a lull for a year or 2. But keep in mind, John, as you all know, the roads have got to get repaired. The bridges have got to get repaired. And the more important thing there to look at is what is the scorecard, what is the -- your report card look like for infrastructure in these states. And you talked to the DOT directors. And the IAG money is helpful as that's been is far from fixing the problem. And so these states that might have a little bit of a dip for…

Got it. And you mentioned something about your prestress activity contributions. Could you talk more about that and see what the ramp looks like going forward?

Yes. No, we're very excited about the progress the new facility in Spokane, Washington has been making. We commissioned that earlier in the year. It's up to full operation. I think it's actually outperforming some of the models that we put together both from a capacity standpoint, our labor costs. And the good news with that is that the demand continues to be strong in premanufactured concrete building solutions, whether that's for structural bridge builders or architectural wall panels. We really are seeing contractors gravitate towards that as a very affordable, sustainable building solution. And so anxious to host our Board of Directors, actually out in Spokane, Washington next week and show off that facility. And so it's performing exceptionally well and is really -- is helping contribute to those record EBITDA margin, EBITDA performance in the Northwest region.

And 1 before I get to Nathan, the industry has suggested mid-single digits in 2025. What's your view on this comment?

John, you broke up a little bit. The industry suggested it was for 2025?

Higher pricing increases of mid-single digits from what we hear from your peers. I'm just wondering what your thoughts on that?

Yes. I think directionally, we would agree that the pricing momentum that we've seen this year and the continuation of our dynamic pricing focus in markets that we enjoy a #1 or #2 market position in, which is about 75% of our volume. I think we would agree that, that pricing momentum is going to continue into 2025 and that we feel that it will outpace inflationary costs. So I would agree with that.

And Nathan, just last one for me. From -- you guys had $267 million cash as of Q3. Is that taking into account what you guys spent on acquisitions during that month of the last month in September?

It does take into account. So what you see on the balance sheet there and the cash flows through $930 million does take into account what we've spent through $930 million, but these transactions that Brian mentioned earlier, in October and November would be additional CapEx that would reduce that cash balance.

And do you see -- oh sorry, go ahead.

So I was going to say, you can see from there, I mean we spent essentially $15 million in CapEx through $930 million, and the remainder of the $129 million we mentioned would have been spent in October and November, if that kind of helps you with the numbers, the $115 million then.

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

I just want to thank everyone again for joining us today. We’re proud of our results and are excited about the long-term opportunities at Knife River. We continue to make good progress on our edge goals and are well positioned to grow our company and deliver long term value for shareholders. We appreciate the interest and support. And with that, I’ll turn the call back over to you.

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