- 2008 third quarter earnings per share were $.77, a 20% increase
compared with $.64 earned in the 2007 third quarter HOUSTON, Oct.
29 /PRNewswire-FirstCall/ -- Kirby Corporation ("Kirby") (NYSE:KEX)
today announced record net earnings for the third quarter ended
September 30, 2008 of $41.8 million, or $.77 per share, compared
with net earnings of $34.4 million, or $.64 per share, for the 2007
third quarter. The 2008 third quarter results included an estimated
$.09 per share negative impact from Hurricanes Gustav and Ike,
partially offset by a $.04 per share positive timing impact from
lower diesel fuel prices. Consolidated revenues for the 2008 third
quarter were a record $354.6 million, an increase of 17% over the
$302.6 million reported for the 2007 third quarter. "Our record
third quarter results mark the 19th consecutive quarter that our
net earnings exceeded the same quarter of the previous year,
despite the negative impact from Hurricanes Gustav and Ike," said
Joe Pyne, Kirby's President and Chief Executive Officer. "Our
marine transportation segment's results reflected continued strong
demand in the majority of our markets and pricing for our services
continued to trend upward. Our diesel engine services segment's
results reflected continued strong demand in our medium-speed
markets." Impact of Hurricanes Gustav and Ike Hurricane Gustav,
which made landfall between Houma and Morgan City, Louisiana on
September 1, resulted in the closure for several days of the Gulf
Intracoastal Waterway in Louisiana, the closure of Kirby's Gulf
Coast diesel engine services operations for several days, as well
as disruptions to the operations of Kirby's four offshore barge and
tug units. Hurricane Ike made landfall on September 13 in the
Houston/Galveston area as a strong Category 2 hurricane, closing
much of the Gulf Coast petrochemical and refining capacity prior to
landfall. Strong winds and a 15 to 20 foot storm surge
significantly affected petrochemical and refining plants in the
Houston and Port Arthur/Beaumont areas, some of which are still not
back in operation or are operating at reduced levels. Additionally,
eight miles of the Gulf Intracoastal Waterway between the Houston
Ship Channel and Port Arthur, Texas were closed for 11 days after
Ike's landfall due to obstructions in the waterway, completely
stopping all movements to and from the Houston area. Hurricanes
Gustav and Ike caused no material damage to Kirby's active tank
barge and towboat fleet. The estimated impact of the hurricanes on
the 2008 third quarter was a negative $.09 per share. Marine
Transportation Operating Results Marine transportation revenues and
operating income for the 2008 third quarter increased 19% and 18%,
respectively, compared with the third quarter of 2007. The higher
third quarter results reflected favorable demand in Kirby's
petrochemical and black oil markets, partially offset by continued
weakness in the upriver refined products market. While demand
during the third quarter softened for certain products, overall
barge utilization remained high. Operating conditions were
favorable in July and August, but deteriorated in September due to
Hurricanes Gustav and Ike. Ton miles for the 2008 third quarter
decreased 21% compared with the 2007 third quarter due primarily to
disruptions caused by the two Gulf Coast hurricanes and a continued
soft Midwest refined products market. On a positive note, the third
quarter results reflected a $.04 per share benefit from the timing
impact of falling diesel fuel prices, which declined from an
average high of $4.33 per gallon on July 14 to an average low of
$3.11 per gallon on September 30. The 2008 third quarter operating
margin was 22.7% compared with 22.9% for the 2007 third quarter.
Diesel Engine Services Operating Results Diesel engine services
revenues and operating income for the 2008 third quarter increased
11% and 12%, respectively, compared with the 2007 third quarter,
despite the negative impact of Hurricane Gustav. The higher results
reflected continued strong service activity and direct parts sales
in the medium-speed markets, led by favorable Midwest marine and
power generation markets. The high-speed market continued to
experience a slowdown in the Gulf Coast oil services sector, but
was stronger than the 2008 first half. The diesel engine services
operating margin was 15.7% for the 2008 third quarter compared with
15.5% for the 2007 third quarter. Treasury Stock Purchases During
August, September and October 2008, Kirby purchased 756,900 shares
of its common stock for $30,202,000, for an average purchase price
of $39.90 per share. Since the beginning of 2008, Kirby has
purchased 837,400 shares of its common stock for $33,377,000, for
an average purchase price of $39.86 per share. Kirby has 1,420,000
shares remaining under its current Board of Directors repurchase
authorization. Fourth Quarter and Year Outlook Commenting on the
2008 fourth quarter market conditions and guidance, Mr. Pyne said,
"Certainly the current global financial situation has significantly
reduced our visibility. Hurricanes Gustav and Ike materially
affected the Gulf Coast petrochemical and refining industries. Many
of these facilities are just now returning to full operational
status. Until inventories get back to desired levels, we anticipate
our fleet utilization will maintain its high utilization rates.
Business levels in our diesel engine services markets are
anticipated to remain favorable, with some improvement in the Gulf
Coast oil services market. For the 2008 fourth quarter, our
earnings guidance is $.77 to $.82 per share, reflecting a 20% to
28% increase compared with $.64 per share for the 2007 fourth
quarter. For the 2008 year, our earnings guidance is $2.96 to $3.01
per share, reflecting a 29% to 31% increase over 2007 net earnings
of $2.29 per share. Our 2008 capital spending guidance range
remains at $165 to $175 million, including approximately $90
million for the construction of new tank barges and towboats."
Conference Call A conference call is scheduled at 10:00 a.m.
central time tomorrow, Thursday, October 30, 2008, to discuss the
2008 third quarter performance as well as the outlook for the 2008
fourth 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 1:00 p.m. central time on Thursday, October 30,
through 6:00 p.m. central time on Friday, November 28, by dialing
800-642-1687 for domestic and 706-645-9291 for international
callers. The conference ID number is 68666693. 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 homepage 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 before interest expense, taxes on
income, depreciation and amortization. A reconciliation of EBITDA
with GAAP net earnings is included in this press release. This
earnings press release also includes marine transportation
performance measures, consisting of ton miles, revenue per ton
mile, towboats operated and delay days. Comparable performance
measures for the 2007 and 2006 years and quarters are available at
Kirby's web site, http://www.kirbycorp.com/, under the caption
Performance Measurements in the Investor Relations section. About
Kirby Corporation 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, 2007 filed with the Securities and Exchange
Commission. A summary of the results for the third quarter and
first nine months follows: CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS Third Quarter Nine Months 2008 2007 2008 2007 (unaudited,
$ in thousands except per share amounts) Revenues: Marine
transportation $286,880 $241,329 $ 830,014 $680,139 Diesel engine
services 67,767 61,227 203,463 184,636 354,647 302,556 1,033,477
864,775 Costs and expenses: Costs of sales and operating expenses
220,875 186,338 649,480 542,545 Selling, general and administrative
36,026 31,313 102,349 91,287 Taxes, other than on income 3,560
3,237 10,548 9,626 Depreciation and amortization 22,420 20,407
67,132 60,274 Loss (gain) on disposition of assets 166 (30) (276)
531 283,047 241,265 829,233 704,263 Operating income 71,600 61,291
204,244 160,512 Other expense (515) (252) (1,101) (457) Interest
expense (3,375) (5,236) (10,665) (15,826) Earnings before taxes on
income 67,710 55,803 192,478 144,229 Provision for taxes on income
(25,932) (21,373) (73,719) (55,240) Net earnings $ 41,778 $34,430
$118,759 $88,989 Net earnings per share of common stock: Basic $.78
$.65 $2.22 $1.68 Diluted $.77 $.64 $2.19 $1.66 Common stock
outstanding (in thousands): Basic 53,549 52,983 53,464 52,892
Diluted 54,197 53,802 54,179 53,709 CONDENSED CONSOLIDATED
FINANCIAL INFORMATION Third Quarter Nine Months 2008 2007 2008 2007
(unaudited, $ in thousands) EBITDA: (1) Net earnings $41,778
$34,430 $118,759 $88,989 Interest expense 3,375 5,236 10,665 15,826
Provision for taxes on income 25,932 21,373 73,719 55,240
Depreciation and amortization 22,420 20,407 67,132 60,274 $93,505
$81,446 $270,275 $220,329 Capital expenditures $35,014 $27,455
$141,525 $123,027 Acquisitions of businesses and marine equipment
$302 $12,374 $5,436 $61,766 September 30, 2008 2007 (unaudited, $
in thousands) Long-term debt, including current portion $269,170
$333,732 Stockholders' equity $886,116 $732,241 Debt to
capitalization ratio 23.3% 31.3% MARINE TRANSPORTATION STATEMENTS
OF EARNINGS Third Quarter Nine Months 2008 2007 2008 2007
(unaudited, $ in thousands) Marine transportation revenues $286,880
$241,329 $830,014 $680,139 Costs and expenses: Costs of sales and
operating expenses 173,249 143,232 507,083 411,299 Selling, general
and administrative 24,477 20,925 68,382 61,796 Taxes, other than on
income 3,318 3,020 9,741 8,901 Depreciation and amortization 20,811
18,939 62,113 56,200 221,855 186,116 647,319 538,196 Operating
income $65,025 $55,213 $182,695 $141,943 Operating margins 22.7%
22.9% 22.0% 20.9% DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS
Third Quarter Nine Months 2008 2007 2008 2007 (unaudited, $ in
thousands) Diesel engine services revenues $67,767 $61,227 $203,463
$184,636 Costs and expenses: Costs of sales and operating expenses
47,626 43,106 142,397 131,246 Selling, general and administrative
8,164 7,358 24,506 21,080 Taxes, other than income 229 203 757 638
Depreciation and amortization 1,121 1,085 3,715 2,976 57,140 51,752
171,375 155,940 Operating income $10,627 $9,475 $32,088 $28,696
Operating margins 15.7% 15.5% 15.8% 15.5% OTHER COSTS AND EXPENSES
Third Quarter Nine Months 2008 2007 2008 2007 (unaudited, $ in
thousands) General corporate expenses $3,886 $3,427 $10,815 $9,596
Loss (gain) on disposition of assets $166 $(30) $(276) $531 MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS Third Quarter Nine Months
2008 2007 2008 2007 Ton Miles (in millions)(2) 3,459 4,353 10,975
12,510 Revenue/Ton Mile (cents/tm)(3) 7.9 5.3 7.2 5.2 Towboats
operated (average)(4) 255 255 258 252 Delay Days(5) 1,429 1,444
6,341 5,846 Average cost per gallon of fuel consumed $3.99 $2.21
$3.40 $1.96 Tank barges: Active 915 913 Inactive 64 49 Barrel
capacities (in millions): Active 17.5 17.3 Inactive 1.1 .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 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 2008 inland
marine revenues of $274,869,000 divided by 3,459,000,000 marine
transportation ton miles = 7.9 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. DATASOURCE: Kirby Corporation CONTACT:
Steve Holcomb of Kirby Corporation, +1-713-435-1135 Web site:
http://www.kirbycorp.com/
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