HOUSTON, April 28 /PRNewswire-FirstCall/ -- Kirby
Corporation ("Kirby") (NYSE: KEX) today announced net earnings
attributable to Kirby for the first quarter ended March 31, 2010 of $24.7
million, or $.46 per share,
compared with $28.0 million, or
$.52 per share, for the 2009 first
quarter. Both the 2010 and 2009 first quarter net earnings
included a charge for retirements and shore staff reductions of
$4.1 million before taxes, or
$.05 per share, and $4.0 million, or $.05 per share, respectively. Kirby's
published 2010 first quarter earnings guidance range was
$.42 to $.47 per share.
Consolidated revenues for the 2010 first quarter were
$268.3 million compared with revenues
of $277.7 million reported for the
2009 first quarter.
Joe Pyne, Kirby's Chief Executive
Officer commented, "Our 2010 first quarter results reflected higher
business levels in our marine transportation segment when compared
with the majority of 2009. While we do believe that the
higher demand and resulting higher equipment utilization was the
result of improved petrochemical production, the improvement was
also driven by plant outages. During the month of April, the
improved demand has continued; however, time will tell if this
improvement is sustainable. Our diesel engine services
segment experienced seasonal improvement in its medium-speed marine
market, along with a continued stable power generation market."
Mr. Pyne further commented, "During 2009, with lower business
levels, we focused our attention on operating as prudently and
efficiently as possible and reducing our costs. Our cost
reductions were consistent with our forecast of sustainable
business levels and also improvements in customer service levels
and key processes. In early January
2010, we continued our cost reduction initiatives by further
reducing our marine transportation and corporate shore staffs,
taking a $4.1 million before taxes,
or $.05 per share, charge. The
2009 first quarter results also included a shore staff reduction
charge of $4.0 million before taxes,
or $.05 per share. Since our
peak headcount in October 2008, we
have reduced our shore staff by 22% through retirements, staff
reductions and attrition."
Segment Results – Marine Transportation
Marine transportation revenues for the 2010 first quarter were
relatively constant with the 2009 first quarter. However,
operating income declined 8% when compared with the 2009 first
quarter. Marine transportation segment revenues for the 2010
first quarter reflected an improvement in tank barge demand driving
higher equipment utilization in the majority of its markets due to
higher volumes from petrochemical customers, as well as supply
chain disruptions caused by plant turnarounds and unscheduled plant
maintenance. Diesel fuel prices for the 2010 first quarter
increased 37% compared with the 2009 first quarter, thereby
positively impacting marine transportation revenues.
Offsetting the improved demand and higher equipment
utilization was the negative impact of lower term contract and spot
contract rates negotiated throughout 2009 due to recessionary
pressure and resulting industry-wide lower demand.
The marine transportation segment's operating margin was 19.3%
compared with 21.1% for the first quarter of 2009, a reflection of
lower term contract and spot contract rates, and more difficult
operating conditions that required additional horsepower, partially
offset by the cost reduction initiatives implemented during 2009
and the 2010 first quarter. Excluding the 2010 and 2009 first
quarter retirement and staff reduction charges, the marine
transportation operating margin for the 2010 and 2009 first
quarters were 20.5% and 22.3%, respectively.
Segment Results – Diesel Engine Services
Diesel engine services revenues and operating income for the
2010 first quarter decreased 17% and 1%, respectively, compared
with the 2009 first quarter. The revenue decrease reflected
continued weak service levels and direct parts sales across the
majority of the marine markets, partially offset by a continued
stable power generation market and an improved railroad market.
The decrease in operating income reflected the lower
revenues, substantially offset by cost reduction initiatives
implemented during 2009. The staff of the diesel engine
services segment has been reduced 23% since the peak headcount in
October 2008. The segment
benefited from seasonal service and direct parts sales in the
medium-speed marine markets. However, the oil services market
remained weak from continued deferral of major maintenance on
customer's idled equipment. The medium-speed power generation
market remained firm with modification projects and the
medium-speed railroad market reflected an improvement in direct
parts sales.
The diesel engine services operating margin was 10.4% for the
2010 first quarter. This compares with 8.7% for the 2009
first quarter, or 11.1% excluding the retirements and staff
reduction charge. The 2010 first quarter operating margin
reflected the overall lower service and direct parts sales and
resulting lower utilization, partially offset by the positive
impact of the 2009 cost reduction initiatives.
Cash Generation
Continued strong cash generation during the 2010 first quarter
with EBITDA of $66.2 million was used
in part to fund capital expenditures of $34.4 million, including $21.1 million for new tank barge and towboat
construction and $13.3 million
primarily for upgrades to the existing fleet. Total debt as
of March 31, 2010 was $200.2 million, consisting of primarily a
$200 million private placement loan
that matures in 2013, and Kirby's debt-to-capitalization ratio was
15.6%. Cash and cash equivalents at March 31, 2010 was $121.4
million compared with $97.8
million at December 31, 2009
and $6.0 million at March 31, 2009.
Chairman of the Board
As previously announced on October 12,
2009, Berdon Lawrence, the
Chairman of the Board of Kirby since 1999, retired effective
April 27, 2010. Mr. Lawrence
will remain on the Kirby Board of Directors, serving as Chairman
Emeritus, and will serve as a consultant to Kirby. On
April 27, 2010, the Kirby Board of
Directors elected Joe Pyne the
Chairman of the Board, President and Chief Executive Officer of
Kirby.
Commenting on Mr. Lawrence's retirement, Mr. Pyne stated, "I
have enjoyed working with Berdon over the past 10 years, beginning
with the integration of Hollywood Marine, Inc. into Kirby and
continuing over the years with Kirby's strategy of enhancing and
growing our core businesses through synergistic acquisitions, and
creating enhanced earnings and value for our shareholders. We
thank him for his service to the inland tank barge industry and his
leadership and guidance while serving as Kirby's Chairman."
Outlook
Commenting on the 2010 second quarter and full year market
outlook and guidance, Mr. Pyne said, "Our earnings guidance for the
2010 second quarter is $.52 to $.57
per share, reflecting a 10% to 17% decrease compared with
$.63 per share reported for the 2009
second quarter. For the 2010 year, we are raising our low-end
earnings per share guidance to $2.00
from $1.85 and maintaining our
high-end guidance of $2.20. Our
second quarter guidance reflects improved operating conditions
compared with typical winter weather conditions for the first
quarter. Our revised $2.00
low-end guidance assumes volumes will remain stable for the
remainder of 2010 and term contract and spot contract pricing will
remain at current levels. Our $2.20 high-end guidance assumes an improvement in
volumes as the year progresses, some reduction in current excess
tank barge capacity, leading to some improvement in term contract
and spot contract pricing. Our guidance assumes our diesel
engine services segment will continue to face challenges, with some
improvement in service levels in the latter part of 2010. We are
maintaining our 2010 capital spending guidance range of
$125 to $135 million, including
approximately $60 million for the
construction of 58 new tank barges and completing the construction
of three new towboats."
Commenting on the financial condition of Kirby, Mr. Pyne stated,
"Our balance sheet remains exceptionally strong with cash on hand
of $121 million at March 31, only $200
million of senior notes outstanding, an undrawn $250 million revolving line of credit, and a
debt-to-capitalization ratio of 15.6%. In March 2010, Standard & Poor's raised its
investment grade rating on Kirby's debt to A- from BBB.
Clearly, our strong balance sheet and undrawn revolving line
of credit gives us the ability to take advantage of any synergistic
acquisition opportunities in our marine transportation and diesel
engine services segments that may come our way."
Conference Call
A conference call is scheduled at 10:00
a.m. central time tomorrow, Thursday, April 29, 2010, to
discuss the 2010 first quarter performance as well as the outlook
for the 2010 second quarter and year. The conference call
number is 800-446-1671 for domestic callers and 847-413-3362 for
international callers. The leader's name is Steve Holcomb. The confirmation number is
26776684. An audio playback will be available at 1:00 p.m. central time on Thursday, April 29, through 5:00 p.m. central time on Friday, May 28, by dialing 888-843-8996 for
domestic and 630-652-3044 for international callers. 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 2009 and 2008 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,
2009 filed with the Securities and Exchange Commission.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
|
|
|
|
First
Quarter
|
|
|
2010
|
2009
|
|
|
(unaudited, $ in thousands
except
per
share amounts)
|
|
Revenues:
|
|
|
|
Marine transportation
|
$
219,562
|
$
219,021
|
|
Diesel engine services
|
48,691
|
58,640
|
|
|
268,253
|
277,661
|
|
Costs and expenses:
|
|
|
|
Costs of sales and operating
expenses
|
164,952
|
169,094
|
|
Selling, general and
administrative
|
33,371
|
34,810
|
|
Taxes, other than on income
|
3,503
|
3,085
|
|
Depreciation and
amortization
|
23,370
|
22,276
|
|
Loss (gain) on disposition of
assets
|
44
|
(244)
|
|
|
225,240
|
229,021
|
|
|
|
|
|
Operating income
|
43,013
|
48,640
|
|
Other income
|
12
|
95
|
|
Interest expense
|
(2,668)
|
(2,813)
|
|
|
|
|
|
Earnings before taxes on
income
|
40,357
|
45,922
|
|
Provision for taxes on
income
|
(15,446)
|
(17,458)
|
|
|
|
|
|
Net earnings
|
24,911
|
28,464
|
|
Less: Net earnings attributable
to noncontrolling interests
|
(237)
|
(458)
|
|
Net earnings attributable to
Kirby
|
$
24,674
|
$
28,006
|
|
|
|
|
|
Net earnings per share attributable to
Kirby common stockholders:
|
|
|
|
Basic
|
$
0.46
|
$
0.52
|
|
Diluted
|
$
0.46
|
$
0.52
|
|
Common stock outstanding (in
thousands):
|
|
|
|
Basic
|
53,405
|
53,112
|
|
Diluted
|
53,527
|
53,265
|
|
|
|
|
|
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
|
|
|
First
Quarter
|
|
|
2010
|
2009
|
|
|
(unaudited, $ in
thousands)
|
|
EBITDA: (1)
|
|
|
|
Net earnings attributable to
Kirby
|
$
24,674
|
$
28,006
|
|
Interest expense
|
2,668
|
2,813
|
|
Provision for taxes on
income
|
15,446
|
17,458
|
|
Depreciation and
amortization
|
23,370
|
22,276
|
|
|
$
66,158
|
$
70,553
|
|
|
|
|
|
Capital expenditures
|
$
34,423
|
$
64,845
|
|
|
March
31,
|
|
|
2010
|
2009
|
|
|
(unaudited, $ in
thousands)
|
|
Cash and cash equivalents
|
$
121,364
|
$
6,040
|
|
Long-term debt, including current
portion
|
$
200,224
|
$
226,292
|
|
Total equity
|
$
1,082,870
|
$
924,994
|
|
Debt to capitalization
ratio
|
15.6%
|
19.7%
|
|
|
|
MARINE
TRANSPORTATION STATEMENTS OF EARNINGS
|
|
|
|
|
|
First
Quarter
|
|
|
2010
|
2009
|
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
Marine transportation
revenues
|
$
219,562
|
$
219,021
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
Costs of sales and operating
expenses
|
129,814
|
125,865
|
|
Selling, general and
administrative
|
22,482
|
23,465
|
|
Taxes, other than on income
|
3,209
|
2,791
|
|
Depreciation and
amortization
|
21,748
|
20,682
|
|
|
177,253
|
172,803
|
|
|
|
|
|
Operating
income
|
$
42,309
|
$
46,218
|
|
|
|
|
|
Operating
margins
|
19.3
%
|
21.1
%
|
|
|
|
|
|
DIESEL ENGINE
SERVICES STATEMENTS OF EARNINGS
|
|
|
|
|
|
First
Quarter
|
|
|
2010
|
2009
|
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
Diesel engine services
revenues
|
$
48,691
|
$
58,640
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
Costs of sales and operating
expenses
|
35,138
|
43,229
|
|
Selling, general and
administrative
|
7,159
|
8,963
|
|
Taxes, other than on income
|
292
|
283
|
|
Depreciation and
amortization
|
1,059
|
1,078
|
|
|
43,648
|
53,553
|
|
|
|
|
|
Operating
income
|
$
5,043
|
$
5,087
|
|
|
|
|
|
Operating
margins
|
10.4
%
|
8.7
%
|
|
|
|
|
|
OTHER COSTS AND
EXPENSES
|
|
|
|
|
|
First
Quarter
|
|
|
2010
|
2009
|
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
General corporate expenses
|
$
4,295
|
$
2,909
|
|
|
|
|
|
Loss (gain) on disposition of
assets
|
$
44
|
$
(244)
|
|
|
|
|
|
|
|
|
|
|
|
|
MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS
|
|
|
|
|
|
First
Quarter
|
|
|
2010
|
2009
|
|
|
|
|
|
Ton Miles (in millions) (2)
|
3,058
|
2,780
|
|
Revenue/Ton Mile (cents/tm)
(3)
|
7.0
|
7.6
|
|
Towboats operated (average)
(4)
|
224
|
232
|
|
Delay Days (5)
|
1,822
|
1,564
|
|
Average cost per gallon of fuel
consumed
|
$
2.14
|
$
1.56
|
|
Tank barges:
|
|
|
|
Active
|
861
|
897
|
|
Inactive
|
19
|
92
|
|
Barrel Capacities (in
millions):
|
|
|
|
Active
|
16.6
|
17.2
|
|
Inactive
|
.3
|
1.6
|
|
(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:
First quarter 2010 inland marine transportation revenues of
$212,944,000 divided by 3,058,000,000 marine transportation ton
miles = 7.0 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.
|
|
|
|
|
SOURCE Kirby Corporation