- 2007 second quarter earnings per share were $.56, a 27% increase
compared with $.44 earned in the 2006 second quarter HOUSTON, July
25 /PRNewswire-FirstCall/ -- Kirby Corporation ("Kirby") (NYSE:KEX)
today announced record net earnings for the second quarter ended
June 30, 2007 of $30,137,000, or $.56 per share, compared with net
earnings of $23,643,000, or $.44 per share, for the 2006 second
quarter. Kirby's published earnings guidance range for the 2007
second quarter was $.48 to $.53 per share. Consolidated revenues
for the 2007 second quarter were a record $288,008,000, an increase
of 18% over $243,292,000 reported for the 2006 second quarter.
Kirby reported record net earnings for the 2007 first six months of
$54,559,000, or $1.02 per share, compared with $46,154,000, or $.87
per share, for the first six months of 2006. Consolidated revenues
for the 2007 first six months were a record $562,219,000, a 20%
increase compared with $468,195,000 for the first half of 2006.
Marine transportation revenues and operating income for the 2007
second quarter increased 13% and 25%, respectively, compared with
the second quarter of 2006. For the first six months of 2007,
marine transportation revenues and operating income increased 12%
and 18%, respectively, compared with the 2006 first six months. The
higher results for both periods reflected continued strong
petrochemical and black oil demand, fleet efficiency resulting from
operating additional towboats, improvements in the current shortage
of vessel personnel, and higher rates on contract renewals and spot
market pricing. The 2007 second quarter also benefited from
stronger seasonal agricultural chemical volumes. The marine
transportation operating margin was a record 21.0% for 2007 second
quarter compared with 18.9% for the 2006 second quarter. The diesel
engine services revenues and operating income for the 2007 second
quarter increased 49% and 59%, respectively, compared with the 2006
second quarter. For the first six months of 2007, diesel engine
services revenues and operating income increased 65% compared with
the 2006 first half. The results for both 2007 periods reflected
the accretive acquisitions of Global Power Holding Company on June
7, 2006 and Marine Engine Specialists, Inc. on July 21, 2006, both
high-speed diesel engine service providers. The medium-speed diesel
engine sector reflected its normal seasonal softness during the
2007 second quarter compared with the 2007 first quarter, which
benefited from seasonal winter work for Midwest and Great Lakes
marine customers; however, in-house and in-field service activity
and direct parts sales remained brisk. The high-speed sector also
remained strong during the 2007 second quarter, with the activity
in the Gulf Coast oil service industry returning to lower but more
normal levels. Both the medium and high-speed sectors benefited
from continued high labor utilization, and higher service rates and
parts pricing implemented during 2006 and in the 2007 first half.
The diesel engine services operating margin for the 2007 second
quarter was 16.0% compared with 15.0% for the 2006 second quarter.
On July 20, 2007, Kirby purchased substantially all of the assets
of Saunders Engine and Equipment Company, Inc. ("Saunders") for
approximately $13.2 million in cash. Saunders, a Gulf Coast
high-speed diesel engine services provider, operated
factory-authorized full service marine dealerships for Cummins and
Detroit Diesel engines, and served as an authorized marine dealer
for Caterpillar engines in Alabama. Financing of the acquisition
was through Kirby's $250 million revolving credit facility. Joe
Pyne, Kirby's President and Chief Executive Officer, commented,
"Both our marine transportation and diesel engine services business
fundamentals remained very strong in the 2007 first half. Our
inland marine transportation segment remains essentially fully
utilized, volumes remain strong, pricing continues to trend upward
and we have made slow but steady progress in alleviating our
towboat and vessel personnel shortage issues." Commenting on the
2007 third quarter market conditions and guidance, Mr. Pyne said,
"We expect our marine transportation business levels to remain
strong and anticipate contract and spot market rate increases
consistent with the 2007 first half. We also expect our diesel
engine services segment to remain strong, but we anticipate a
summer slowdown that is typical for this segment. For the 2007
third quarter, our guidance is $.53 to $.58 per share, reflecting a
10% to 21% increase compared with $.48 per share reported for the
2006 third quarter. For the 2007 year, we are increasing our
guidance to $2.05 to $2.15 per share, reflecting a 15% to 20%
increase over the 2006 net earnings of $1.79 per share. We have
increased our capital spending guidance for 2007 to $150 to $160
million, which includes approximately $75 million for the
construction of 30 tank barges and seven towboats. Delivery is
scheduled throughout 2007 and into early 2008." This earnings press
release includes marine transportation performance measures for
both the 2007 and 2006 second quarters and first six months. The
performance measures include ton miles, revenue per ton mile,
towboats operated and delay days. Comparable performance measures
for the 2006 and 2005 years and quarters are available at Kirby's
web site under the caption Performance Measurements in the Investor
Relations section. Kirby's homepage can be accessed by visiting
http://www.kirbycorp.com/. A conference call is scheduled at 10:00
a.m. central time tomorrow, Thursday, July 26, 2007, to discuss the
2007 second quarter and first six months, and the outlook for the
2007 third quarter and year. The conference call number is
888-328-2514 for domestic callers and 706-679-3262 for
international callers. The leader's name is Steve Holcomb. An audio
playback will be available at approximately 1:00 p.m. central time
on Thursday, July 26, through 6:00 p.m. central time on Friday,
August 24, 2007, by dialing 800-642-1687 for domestic callers and
706-645-9291 for international callers. The conference ID number is
7173233. The conference call can also be accessed by visiting
Kirby's homepage at http://www.kirbycorp.com/ or at
http://audioevent.mshow.com/334349/. A replay will be available on
each of those web sites following the conference call. 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 before interest expense, taxes on
income, depreciation and amortization. A reconciliation of EBITDA
for the 2007 and 2006 second quarters and first six months with
GAAP net earnings for the same periods is included in the Condensed
Consolidated Financial Information in this press release. Kirby
Corporation, based in Houston, Texas, operates inland tank barges
and towing vessels, transporting petrochemicals, black oil
products, refined petroleum products and agricultural chemicals
throughout the United States inland waterway system. Kirby also
owns and operates four ocean-going barge and tug units transporting
dry-bulk commodities in United States coastwise 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, power generation and railroad
applications. 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, 2006 filed with the Securities and Exchange
Commission. CONFERENCE CALL INFORMATION Date: Thursday, July 26,
2007 Leader: Steve Holcomb Time: 10:00 a.m. central time Conf. ID:
7173233 U.S.: 888-328-2514 Int'l: 706-679-3262 Website:
http://www.kirbycorp.com/ or http://audioevent.mshow.com/334349/ A
summary of the results for the second quarter and first six months
follows: CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Second
Quarter Six Months 2007 2006(1) 2007 2006(1) (unaudited, $ in
thousands except per share amounts) Revenues: Marine transportation
$229,745 $204,088 $438,810 $393,471 Diesel engine services 58,263
39,204 123,409 74,724 288,008 243,292 562,219 468,195 Costs and
expenses: Costs of sales and operating expenses 180,608 157,094
356,207 301,584 Selling, general and administrative 29,468 26,518
59,974 50,279 Taxes, other than on income 3,255 3,403 6,389 6,590
Depreciation and amortization 20,280 15,515 39,867 30,605 Loss
(gain) on disposition of assets 62 (785) 561 (942) 233,673 201,745
462,998 388,116 Operating income 54,335 41,547 99,221 80,079 Equity
in earnings of marine affiliates 105 87 203 553 Other expense (160)
(134) (408) (68) Interest expense (5,436) (3,304) (10,590) (6,002)
Earnings before taxes on income 48,844 38,196 88,426 74,562
Provision for taxes on income (18,707) (14,553) (33,867) (28,408)
Net earnings $30,137 $23,643 $54,559 $46,154 Net earnings per share
of common stock: Basic $.57 $.45 $1.03 $.88 Diluted $.56 $.44 $1.02
$.87 Common stock outstanding (in thousands): Basic 52,849 52,450
52,802 52,268 Diluted 53,731 53,411 53,662 53,208 CONDENSED
CONSOLIDATED FINANCIAL INFORMATION Second Quarter Six Months 2007
2006(1) 2007 2006 (1) (unaudited, $ in thousands except per share
amounts) EBITDA: (2) Net earnings $30,137 $23,643 $54,559 $46,154
Interest expense 5,436 3,304 10,590 6,002 Provision for taxes on
income 18,707 14,553 33,867 28,408 Depreciation and amortization
20,280 15,515 39,867 30,605 $74,560 $57,015 $138,883 $111,169
Capital expenditures $41,923 $42,760 $95,572 $64,386 Acquisitions
of businesses and marine equipment $2,075 $100,533 $49,392 $116,773
June 30, 2007 2006 (unaudited, $ in thousands) Long-term debt,
including current portion $383,653 $285,434 Stockholders' equity
$695,521 $606,288 Debt to capitalization ratio 35.6% 32.0% MARINE
TRANSPORTATION STATEMENTS OF EARNINGS Second Quarter Six Months
2007 2006 (1) 2007 2006(1) (unaudited, $ in thousands) Marine
transportation revenues $229,745 $204,088 $438,810 $393,471 Costs
and expenses: Costs of sales and operating expenses 139,237 129,006
268,067 248,089 Selling, general and 20,391 18,777 40,871 36,939
administrative Taxes, other than on income 3,003 3,133 5,881 6,144
Depreciation and amortization 18,945 14,673 37,261 28,971 181,576
165,589 352,080 320,143 Operating income $48,169 $38,499 $86,730
$73,328 Operating margins 21.0% 18.9% 19.8% 18.6% DIESEL ENGINE
SERVICES STATEMENTS OF EARNINGS Second Quarter Six Months 2007 2006
2007 2006 (unaudited, $ in thousands) Diesel engine services
revenues $58,263 $39,204 $123,409 $74,724 Costs and expenses: Costs
of sales and operating expenses 41,371 28,078 88,140 53,485
Selling, general and administrative 6,412 4,640 13,722 8,562 Taxes,
other than income 191 136 435 223 Depreciation and amortization 965
475 1,891 814 48,939 33,329 104,188 63,084 Operating income $9,324
$5,875 $19,221 $11,640 Operating margins 16.0% 15.0% 15.6% 15.6%
OTHER COSTS AND EXPENSES Second Quarter Six Months 2007 2006 2007
2006 (unaudited, $ in thousands) General corporate expenses $3,096
$3,612 $6,169 $5,831 Loss (gain) on disposition of assets $62
$(785) $561 $(942) MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS
Second Quarter Six Months 2007 2006 2007 2006 Ton Miles (in
millions)(3) 4,380 4,096 8,157 7,891 Revenue/Ton Mile (cents/tm)(4)
5.0 4.7 5.1 4.8 Towboats operated (average)(5) 252 241 250 240
Delay Days (6)(5) 1,802 1,378 4,402 3,849 Average cost per gallon
of fuel consumed $1.95 $1.99 $1.83 $1.92 Tank barges: Active 915
897 Inactive 50 62 Barrel capacities (in millions): Active 17.4
16.7 Inactive .9 1.2 (1) In the 2007 first quarter, Kirby adopted
Financial Accounting Standards Board Staff Position No. AUG AIR-1,
"Accounting for Planned Major Maintenance Activities." The guidance
prohibits the use of the accrue-in-advance method of accounting for
planned major maintenance activities in interim and annual
financial reporting periods because an obligation has not occurred
and therefore a liability should not be recognized. The adoption
resulted in the recast of Kirby's prior years' quarterly results,
reducing the 2006 first quarter net earnings by $69,000, increasing
the 2006 second quarter by $310,000 and increasing the 2006 first
six months by $241,000. The recast reduced the 2006 first quarter
diluted earnings per share by $.01 to $.42, had no impact on the
2006 second quarter diluted earnings per share and increased the
2006 first six months diluted earning per share by $.01 to $.87.
The adoption had no impact on Kirby's annual financial statements.
(2) 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 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.
(3) 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. (4) Inland marine
transportation revenues divided by ton miles. Example: Second
quarter 2007 inland marine revenues of $218,151,000 divided by
4,380,000,000 marine transportation ton miles = 5.0 cents. (5)
Towboats operated are the average number of owned and chartered
towboats operated during the period. (6) 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.
DATASOURCE: Kirby Corporation CONTACT: Steve Holcomb of Kirby
Corporation, +1-713-435-1135 Web site: http://www.kirbycorp.com/
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