Starboard prepares Knife River board nominations, targets 22% profit margin in plan
Key Facts
Activist investment firm Starboard Value is preparing to nominate directors to Knife River's board, according to an Investing.com report citing sources, as part of a campaign calling for improved profitability and an evaluation of strategic alternatives. Starboard had accused the company of failing to deliver promised margin improvements in a statement published through Business Wire. It said Knife River was increasingly lagging its peers, an assessment underpinning the activist investor's criticism of management's performance. It called on the company to "evaluate strategic alternatives," alongside demands on pricing and costs. These demands put the company's operating performance and strategic options at the center of Starboard's campaign, alongside the anticipated move on board membership reported by the website.
Knife River's results for the second quarter of 2026 showed revenue rising to $938.6 million from $833.8 million in the corresponding period a year earlier. But net income fell to $43.9 million from $50.6 million a year earlier, according to the company's financial results statement. Its adjusted earnings before interest, taxes, depreciation and amortization margin also declined to 14.9% from 16.9% in the second quarter of 2025. The decline in profit and margin coincided with revenue growth, providing the financial backdrop to Starboard's criticism of profitability. In its campaign, the investment firm focused on margin improvements it said Knife River had promised but failed to deliver.
Starboard outlined in its statement a path to an adjusted EBITDA margin of 22% by fiscal 2029. It tied reaching that level to improved aggregates pricing as part of its demands concerning the company's operating performance. It also called for meaningful cost reductions as the other component of its proposed path to margin improvement. Starboard summarized its proposal as "improved aggregates pricing and meaningful cost reductions," according to the official statement it published through Business Wire. Alongside this operating plan, the activist investor's demands included a review of the strategic options available to Knife River.
For its part, Knife River said in its response that it learned of Starboard's investment on September 22, 2026. It said it would engage with the activist investor "to better understand its perspectives," according to a statement published on its investor relations website. The company defended its vertically integrated business model, describing the approach as deliberate and central to value creation. Its platform combines aggregates, ready-mix concrete, asphalt and liquid asphalt, alongside contracting services. In its second-quarter results published on August 4, 2026, the company said about 85% of its contracting backlog was tied to publicly funded projects, including street and highway construction.
Knife River shares had risen 3.6% in premarket trading, according to Reuters' report published on September 24, 2026. The gain followed a report that Starboard had acquired a substantial stake in the company. The move was linked to news of the activist investor's arrival, at a time when Knife River said it would engage with it to understand its views. Management maintained its commitment to the company's platform combining construction materials production with contracting services. Starboard, meanwhile, directed its criticism at margins and performance relative to peers, calling for operating changes and an evaluation of strategic alternatives.
Knife River is preparing to release its financial results for the third quarter of 2026 on November 3, according to its official earnings announcement. The results statement will be issued that morning before the New York Stock Exchange opens, according to the announcement published through Business Wire. The company will hold its earnings conference call that same Tuesday. It scheduled the call for 11 a.m. Eastern Daylight Time. The upcoming release follows Starboard's announcement of its demands for improved profitability and Knife River's response defending its operating model and expressing its readiness to engage with the activist investor.