HOUSTON, Oct. 26, 2016 /PRNewswire/ -- Kirby
Corporation ("Kirby") (NYSE: KEX) today announced net earnings
attributable to Kirby for the third quarter ended September 30, 2016 of $32.0 million, or $0.59 per share, compared with $56.8 million, or $1.04 per share, for the 2015 third
quarter. Consolidated revenues for the 2016 third quarter
were $434.7 million compared with
$532.6 million reported for the 2015
third quarter.
David Grzebinski, Kirby's
President and Chief Executive Officer, commented, "Our results in
the third quarter reflected trends across our markets that were
largely as expected. In our inland marine transportation
market, barge utilization was in the low-to-mid 80% range, down
from the high-80% to low-90% range during the second quarter.
The third quarter was aided somewhat by increased demand for
refined petroleum product and black oil movements following a
series of customer supply chain disruptions late in the
quarter. In the coastal marine transportation market, tank
barge utilization was in the low-to-mid 80% range during the third
quarter and the trend of customers moving to the spot market
continued."
Mr. Grzebinski continued, "Within our diesel engine services
segment, the land-based market experienced some improvement in
service activity, but customer demand for engines, transmissions
and parts remained weak. We received orders for pressure
pumping unit service and remanufacturing work in increasing numbers
through the quarter in terms of both quantity and diversity of
customers. In our marine diesel engine services business, we
experienced continued weakness in the Gulf of Mexico oilfield services market, but
this was largely offset by strong performance in our power
generation market."
Segment Results – Marine Transportation
Marine transportation revenues for the 2016 third quarter were
$359.0 million compared with
$418.3 million for the 2015 third
quarter. Operating income for the 2016 third quarter was
$55.5 million compared with
$93.7 million for the 2015 third
quarter.
Demand for inland tank barge transportation of petrochemicals
was stable, aside from the impact of plant maintenance turnarounds,
and black oil demand was weaker both on a year-over-year and
sequential basis, while seasonal demand for agricultural chemical
transportation and the demand for certain upriver petrochemicals
was strong. Demand for refined petroleum products
transportation was sequentially weaker, but increased relative to
the 2015 third quarter due to the addition of acquired assets in
the 2016 second quarter. Kirby's inland tank barge
utilization was in the low-to-mid 80% range during the
quarter. Both spot and term contract pricing were at lower
levels relative to last year. Operating conditions during the
quarter were seasonally normal, although there was significant
flooding in Louisiana that caused
some disruptions in the Gulf Intracoastal Waterway for a short
period during the quarter.
In the coastal marine transportation market, demand for the
transportation of black oil, petrochemicals, and dry products was
stable. Demand for the transportation of refined
petroleum products declined, primarily as a result of weak
distillate and gasoline demand in the Northeast.
Additionally, the growing number of vessels trading in the
spot market continued to drive increased idle time and voyage
costs. Utilization for the coastal tank barge fleet was in
the low-to-mid 80% range.
The marine transportation segment's 2016 third quarter operating
margin was 15.4% compared with 22.4% for the third quarter of
2015.
Segment Results – Diesel Engine Services
Diesel engine services revenues for the 2016 third quarter were
$75.7 million with operating income
of $4.6 million, compared with 2015
third quarter revenues of $114.2
million and operating income of $5.6
million.
The lower revenues and operating income as compared to the third
quarter of 2015 were primarily due to a lack of new pressure
pumping unit manufacturing and lower sales of engines,
transmissions and parts in the land-based diesel engine services
market. Partially offsetting the decline was an increase in
pressure pumping unit remanufacturing and service activity.
Additionally, results in the marine diesel engine services markets
contributed to the decline, a result of continued weakness in the
Gulf of Mexico oilfield services
market and customer deferrals of major maintenance projects.
Demand in the power generation market was relatively strong during
the quarter.
The diesel engine services operating margin was 6.1% for the
2016 third quarter compared with 4.9% for the 2015 third quarter on
lower revenues, reflecting the benefit of cost reductions and
efficiency improvements made in both the land-based and marine
diesel engine services markets.
Cash Generation
EBITDA of $336.1 million for the
2016 first nine months contributed to Kirby's cash flow from
operations during the 2016 first nine months, which compares with
EBITDA of $437.5 million for the 2015
first nine months. Cash flow was used to fund capital
expenditures of $169.3 million,
including $5.6 million for new inland
tank barge and towboat construction, $78.3
million for progress payments on the construction of three
new coastal articulated tank barge and tugboat units ("ATBs"), two
4900 horsepower coastal tugboats and a 35,000 barrel coastal
petrochemical tank barge, and $85.4
million primarily for upgrades to the existing inland and
coastal fleets. In addition, acquisitions totaled
$125.6 million, including
$85.5 million for the acquisition of
the SEACOR inland tank barge fleet, $13.6
million to acquire a leased coastal barge from the lessor
and $26.5 million to purchase four
coastal tugboats. Total debt as of September 30, 2016 was $726.0 million and Kirby's debt-to-capitalization
ratio was 23.3%.
Outlook
Commenting on the 2016 fourth quarter and full year market
outlook and guidance, Mr. Grzebinski said, "Our earnings
guidance for the 2016 fourth quarter is $0.45 to $0.60 per share compared with
$0.94 per share for the 2015 fourth
quarter. As a result of our expectations for the quarter, our
full year earnings per share guidance is narrowed to $2.47 to $2.62 from the previous guidance range
of $2.40 to $2.70. Our fourth
quarter guidance range contemplates inland marine transportation
utilization in the low-to-mid 80% range at the low end and
mid-to-high 80% range at the high end. We believe the
industry is responding to lower utilization by cutting capital
spending and accelerating barge retirements which should bring
supply and demand back into balance. In our coastal market,
we expect utilization in the low-80% range and we continue to
anticipate having more coastal equipment trade in the spot market
which leads to lower utilization, higher costs and lower operating
margins. Additionally, Hurricane Matthew impacted operations
for two weeks in October and drove a cessation of operations along
the Eastern Seaboard."
Mr. Grzebinski continued, "In our diesel engine services
markets, we expect the fourth quarter to reflect a normal seasonal
decline in our marine and power generation markets. In our
land-based diesel engine services market, we expect to incur an
operating loss for the quarter, as a more meaningful recovery in
the land-based market isn't likely until next year when customer
inventories for parts, transmissions and engines are depleted,
which will necessitate new orders for products and parts."
Kirby expects 2016 capital spending to be in the $230 to $250 million range, unchanged from
previous guidance. Capital spending guidance includes
approximately $10 million for the
construction of seven inland tank barges, five of which are
scheduled to deliver in 2016, and one inland towboat. The
capital spending guidance range also includes approximately
$100 million in progress payments on
new coastal equipment, including one 185,000 barrel coastal ATB,
two 155,000 barrel coastal ATBs, two 4900 horsepower coastal
tugboats, and a new coastal petrochemical tank barge. The
balance of $120 to $140 million is
primarily for capital upgrades and improvements to existing inland
and coastal marine equipment and facilities, as well as diesel
engine services facilities.
Conference Call
A conference call is scheduled for 7:30
a.m. central time tomorrow, Thursday, October 27, 2016, to
discuss the 2016 third quarter performance as well as the outlook
for the 2016 fourth quarter and year. The conference call
number is 888-317-6003 for domestic callers and 412-317-6061 for
international callers. The confirmation number is
2839308. An audio playback will be available at
1:00 p.m. central time on
Thursday, October 27, 2016, through
5:00 p.m. central time on
Thursday, November 3, 2016, by
dialing 877-344-7529 for domestic callers and 412-317-0088 for
international callers. The replay access code is
10094118. A live audio webcast of the conference call will be
available to the public and a replay available after the call by
visiting Kirby's website at http://www.kirbycorp.com/.
GAAP to Non-GAAP Financial Measures
The financial and other information to be discussed in the
conference call is available in this press release and in a Form
8-K filed with the Securities and Exchange Commission. This
press release and the Form 8-K include a non-GAAP financial
measure, EBITDA, which Kirby defines as net earnings attributable
to Kirby before interest expense, taxes on income, depreciation and
amortization. A reconciliation of EBITDA with GAAP net
earnings attributable to Kirby is included in this press
release. This earnings press release includes marine
transportation performance measures, consisting of ton miles,
revenue per ton mile, towboats operated and delay days.
Comparable performance measures for the 2015 year and quarters are
available at Kirby's website, http://www.kirbycorp.com/, under the
caption Performance Measurements in the Investor Relations
section.
Forward-Looking Statements
Statements contained in this press release with respect to the
future are forward-looking statements. These statements
reflect management's reasonable judgment with respect to future
events. Forward-looking statements involve risks and
uncertainties. Actual results could differ materially from
those anticipated as a result of various factors, including
cyclical or other downturns in demand, significant pricing
competition, unanticipated additions to industry capacity, changes
in the Jones Act or in U.S. maritime policy and practice, fuel
costs, interest rates, weather conditions and timing, magnitude and
number of acquisitions made by Kirby. Forward-looking
statements are based on currently available information and Kirby
assumes no obligation to update any such statements. A list
of additional risk factors can be found in Kirby's annual report on
Form 10-K for the year ended December 31,
2015 filed with the Securities and Exchange
Commission.
About Kirby Corporation
Kirby Corporation, based in Houston,
Texas, is the nation's largest domestic tank barge operator
transporting bulk liquid products throughout the Mississippi River
System, on the Gulf Intracoastal Waterway, coastwise along all
three United States coasts, and in
Alaska and Hawaii. Kirby
transports petrochemicals, black oil, refined petroleum products
and agricultural chemicals by tank barge. Kirby also operates
offshore dry-bulk barge and tugboat units engaged in the offshore
transportation of dry-bulk cargoes in the
United States coastal trade. Through the diesel engine
services segment, Kirby provides after-market service for
medium-speed and high-speed diesel engines and reduction gears used
in marine and power generation applications. Kirby also
distributes and services diesel engines, transmissions and pumps,
and manufactures and remanufactures oilfield service equipment,
including pressure pumping units, for land-based oilfield service
and oil and gas operator and producer markets.
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
|
|
|
|
Third
Quarter
|
Nine
Months
|
|
|
2016
|
2015
|
2016
|
2015
|
|
|
(unaudited, $ in
thousands except per share amounts)
|
|
Revenues:
|
|
|
|
|
Marine
transportation
|
$
359,031
|
$
418,343
|
$
1,115,677
|
$
1,263,301
|
Diesel engine
services
|
75,677
|
114,222
|
219,346
|
400,093
|
|
434,708
|
532,565
|
1,335,023
|
1,663,394
|
Costs and
expenses:
|
|
|
|
|
Costs of sales and operating
expenses
|
282,168
|
333,115
|
847,975
|
1,061,641
|
Selling, general and
administrative
|
40,645
|
48,759
|
133,948
|
148,968
|
Taxes, other than on
income
|
5,445
|
5,482
|
16,317
|
15,405
|
Depreciation and
amortization
|
50,142
|
49,759
|
148,427
|
142,350
|
Loss (gain) on disposition
of assets
|
122
|
400
|
(39)
|
(1,246)
|
|
378,522
|
437,515
|
1,146,628
|
1,367,118
|
Operating income
|
56,186
|
95,050
|
188,395
|
296,276
|
Other income
(expense)
|
(120)
|
22
|
194
|
(221)
|
Interest
expense
|
(4,507)
|
(4,449)
|
(13,213)
|
(14,458)
|
Earnings before taxes on
income
|
51,559
|
90,623
|
175,376
|
281,597
|
Provision for
taxes on income
|
(19,206)
|
(33,512)
|
(65,430)
|
(104,699)
|
Net earnings
|
32,353
|
57,111
|
109,946
|
176,898
|
Less: Net earnings
attributable to noncontrolling interests
|
(343)
|
(268)
|
(895)
|
(902)
|
|
|
|
|
|
Net earnings attributable to
Kirby
|
$
32,010
|
$
56,843
|
$
109,051
|
$
175,996
|
|
|
|
|
|
Net earnings per
share attributable to Kirby common stockholders:
|
|
|
|
|
Basic
|
$
0.59
|
$
1.04
|
$
2.03
|
$
3.18
|
Diluted
|
$
0.59
|
$
1.04
|
$
2.02
|
$
3.17
|
Common stock
outstanding (in thousands):
|
|
|
|
|
Basic
|
53,455
|
54,386
|
53,449
|
55,085
|
Diluted
|
53,501
|
54,472
|
53,503
|
55,193
|
|
|
|
|
|
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
|
|
|
|
|
Third
Quarter
|
NineMonths
|
|
2016
|
2015
|
2016
|
2015
|
|
(unaudited, $ in
thousands)
|
EBITDA:
(1)
|
|
|
|
|
Net earnings attributable to
Kirby
|
$
32,010
|
$
56,843
|
$
109,051
|
$
175,996
|
Interest expense
|
4,507
|
4,449
|
13,213
|
14,458
|
Provision for taxes on
income
|
19,206
|
33,512
|
65,430
|
104,699
|
Depreciation and
amortization
|
50,142
|
49,759
|
148,427
|
142,350
|
|
$
105,865
|
$
144,563
|
$
336,121
|
$
437,503
|
|
|
|
|
|
Capital
expenditures
|
$
58,257
|
$
75,050
|
$
169,305
|
$
265,202
|
Acquisitions of
businesses and marine equipment
|
$
4,641
|
$
-
|
$
125,632
|
$
41,250
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
2016
|
2015
|
|
(unaudited, $ in
thousands)
|
Long-term debt,
including current portion
|
$
726,004
|
$
806,262
|
Total
equity
|
$
2,386,749
|
$
2,253,678
|
Debt to
capitalization ratio
|
23.3%
|
26.3%
|
|
|
|
|
|
|
|
|
MARINE
TRANSPORTATION STATEMENTS OF EARNINGS
|
|
|
Third
Quarter
|
Nine
Months
|
|
2016
|
2015
|
2016
|
2015
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
Marine transportation
revenues
|
$
359,031
|
$
418,343
|
$
1,115,677
|
$
1,263,301
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Costs of sales and operating
expenses
|
226,543
|
245,910
|
681,887
|
746,778
|
Selling, general and
administrative
|
26,089
|
28,264
|
85,386
|
85,657
|
Taxes, other than on
income
|
4,880
|
4,846
|
14,671
|
13,793
|
Depreciation and
amortization
|
46,059
|
45,673
|
135,752
|
130,143
|
|
303,571
|
324,693
|
917,696
|
976,371
|
|
|
|
|
|
Operating income
|
$
55,460
|
$
93,650
|
$
197,981
|
$
286,930
|
|
|
|
|
|
Operating margins
|
15.4%
|
22.4%
|
17.7%
|
22.7%
|
|
|
|
|
|
|
|
|
|
|
DIESEL ENGINE
SERVICES STATEMENTS OF EARNINGS
|
|
|
|
|
Third
Quarter
|
Nine
Months
|
|
2016
|
2015
|
2016
|
2015
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
Diesel engine
services revenues
|
$
75,677
|
$
114,222
|
$
219,346
|
$
400,093
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Costs of sales and operating
expenses
|
55,625
|
87,205
|
166,088
|
314,863
|
Selling, general and
administrative
|
11,709
|
17,692
|
40,018
|
55,027
|
Taxes, other than
income
|
554
|
624
|
1,607
|
1,571
|
Depreciation and
amortization
|
3,155
|
3,090
|
9,773
|
9,247
|
|
71,043
|
108,611
|
217,486
|
380,708
|
|
|
|
|
|
Operating income
|
$
4,634
|
$
5,611
|
$
1,860
|
$
19,385
|
|
|
|
|
|
Operating margins
|
6.1%
|
4.9%
|
0.8%
|
4.8%
|
OTHER COSTS AND
EXPENSES
|
|
|
|
Third
Quarter
|
Nine
Months
|
|
2016
|
2015
|
2016
|
2015
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
General corporate
expenses
|
$
3,786
|
$
3,811
|
$
11,485
|
$
11,285
|
|
|
|
|
|
Loss (gain) on
disposition of assets
|
$
122
|
$
400
|
$
(39)
|
$
(1,246)
|
MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS
|
|
|
|
|
Third
Quarter
|
Nine
Months
|
|
2016
|
2015
|
2016
|
2015
|
Inland Performance
Measurements:
|
|
|
|
|
Ton Miles (in
millions) (2)
|
2,648
|
3,099
|
8,188
|
9,458
|
Revenue/Ton Mile
(cents/tm) (3)
|
8.6
|
8.9
|
8.8
|
8.8
|
Towboats
operated (average) (4)
|
227
|
246
|
236
|
249
|
Delay Days
(5) (5)
|
929
|
1,431
|
5,200
|
5,885
|
Average cost per
gallon of fuel consumed
|
$
1.59
|
$
1.91
|
$1.40
|
$
2.00
|
Barges
(active):
|
|
|
|
|
Inland tank
barges
|
881
|
899
|
Coastal tank
barges
|
68
|
69
|
Offshore dry-cargo
barges
|
6
|
6
|
Barrel capacities (in
millions):
|
|
|
Inland tank
barges
|
17.9
|
17.9
|
Coastal tank
barges
|
6.0
|
5.9
|
|
|
(1)
|
Kirby has
historically evaluated its operating performance using numerous
measures, one of which is EBITDA, a non-GAAP financial
measure. Kirby defines EBITDA as net earnings attributable to
Kirby before interest expense, taxes on income, depreciation and
amortization. EBITDA is presented because of its wide
acceptance as a financial indicator. EBITDA is one of the
performance measures used in Kirby's incentive bonus plan.
EBITDA is also used by rating agencies in determining Kirby's
credit rating and by analysts publishing research reports on Kirby,
as well as by investors and investment bankers generally in valuing
companies. EBITDA is not a calculation based on generally
accepted accounting principles and should not be considered as an
alternative to, but should only be considered in conjunction with,
Kirby's GAAP financial information.
|
(2)
|
Ton miles indicate
fleet productivity by measuring the distance (in miles) a loaded
tank barge is moved. Example: A typical 30,000 barrel
tank barge loaded with 3,300 tons of liquid cargo is moved 100
miles, thus generating 330,000 ton miles.
|
(3)
|
Inland marine
transportation revenues divided by ton miles. Example:
Third quarter 2016 inland marine transportation revenues of
$228,353,000 divided by 2,648,000,000 inland marine transportation
ton miles = 8.6 cents.
|
(4)
|
Towboats operated are
the average number of owned and chartered towboats operated during
the period.
|
(5)
|
Delay days measures
the lost time incurred by a tow (towboat and one or more tank
barges) during transit. The measure includes transit delays
caused by weather, lock congestion and other navigational
factors.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/kirby-corporation-announces-2016-third-quarter-results-300351972.html
SOURCE Kirby Corporation