HOUSTON, Jan. 26, 2011 /PRNewswire/ -- Kirby Corporation
("Kirby") (NYSE: KEX) today announced net earnings attributable to
Kirby for the fourth quarter ended December
31, 2010 of $31.6 million, or
$.59 per share, compared with
$29.2 million, or $.54 per share, for the 2009 fourth quarter.
The 2009 fourth quarter results included a $4.8 million before taxes, or $.05 per share, charge for shore staff
reductions, a $1.9 million before
taxes, or $.02 per share, charge for
impairment of goodwill and a $2.0
million before taxes, or $.02
per share, net positive impact from the reduction in Kirby's
allowance for doubtful accounts. Consolidated revenues for
the 2010 fourth quarter were $286.3
million compared with $259.6
million reported for the 2009 fourth quarter.
Joe Pyne, Kirby's Chief Executive
Officer, commented, "The United
States petrochemical industry is currently very competitive
on a global basis. With approximately 70% of our marine
transportation revenues tied to the
United States petrochemical industry, a globally competitive
petrochemical business is important to Kirby. The
petrochemical industry's global competitive position is attributed
to a number of factors including its size, industry integration and
an efficient transportation system, an important segment of which
is inland tank barging. During 2010, low priced natural gas,
a basic feedstock used by many of our customers, significantly
improved the competitiveness of the
United States petrochemical industry. As a result,
production volumes from United
States petrochemical plants for both domestic and foreign
destinations remained strong and led to an overall tank barge
utilization level in the mid to high 80% range during 2010.
Our diesel engine services power generation sector reported a
strong quarter with engine-generator set upgrade projects, higher
parts sales and new engine sales, partially offset by the continued
deferral of major maintenance projects by our Gulf Coast oil
services customers."
Kirby reported net earnings attributable to Kirby for the 2010
year of $116.2 million, or
$2.15 per share, compared with
$125.9 million, or $2.34 per share for 2009. Consolidated
revenues for 2010 were $1.11 billion
compared with $1.08 billion for
2009.
Segment Results – Marine Transportation
The marine transportation revenues for the 2010 fourth quarter
was $232.4 million, a 7% increase
compared with the 2009 fourth quarter, while operating income was
$49.4 million, a 3% decrease compared
with the 2009 fourth quarter. The 2009 fourth quarter
operating income included a $3.5
million shore staff reduction charge and the positive impact
of a $2.5 million reduction in the
allowance for doubtful accounts. The improved marine
transportation revenues reflected continued modest improvement in
tank barge demand and equipment utilization levels in the
petrochemical market during the 2010 fourth quarter as low natural
gas prices continued to enhance the global competitiveness of
the United States petrochemical
industry, thereby producing increased marine transportation volumes
for basic petrochemicals to both domestic consumers and terminals
for export destinations. In addition, the black oil products
market reflected high equipment utilization levels during the
fourth quarter due to continued high refinery utilization and
strong export demand for certain black oil products. The
higher revenues were also impacted by a 16% increase in fuel prices
during the 2010 fourth quarter versus the 2009 fourth quarter.
Offsetting the improved demand and equipment utilization
levels was the negative impact of lower term contract rates
renegotiated during 2009 and the 2010 first half.
The marine transportation operating margin was 21.2% for the
2010 fourth quarter compared with 23.6% for the 2009 fourth
quarter, a reflection of lower contract rates renegotiated
throughout 2009 and the 2010 first half, and higher fuel costs,
partially offset by modestly higher equipment utilization and by
the cost reduction initiatives implemented throughout 2009 and
2010.
Segment Results – Diesel Engine Services
The diesel engine services revenues for the 2010 fourth quarter
were $53.9 million, a 26% increase
compared with the 2009 fourth quarter, and operating income was
$6.9 million, a 81% increase compared
with the 2009 fourth quarter, as that quarter included a
$.9 million staff reduction charge
and a $.5 million increase in
allowance for doubtful accounts. The 2010 fourth quarter
benefited from increased engine-generator set upgrade projects and
higher parts and engine sales in its medium-speed power generation
market and strong maintenance cycles for inland marine customers.
Both the medium-speed and high-speed Gulf Coast oil services
markets continued to experience weak service levels and direct
parts sales as customers continue to defer major maintenance
projects, exacerbated by the new safety regulations on Gulf Coast
drilling operators and the delays in issuing offshore drilling
permits.
The diesel engine services operating margin was 12.8% for the
2010 fourth quarter, a reflection of the cost reduction initiative
implemented during 2009 and increased power generation projects,
partially offset by the continued weak medium-speed and high-speed
Gulf Coast oil services markets and resulting lower labor
utilization. The 8.9% operating margin for the 2009 fourth
quarter reflected the diesel engine services' portion of the staff
reduction charge and the increase in the allowance for doubtful
accounts.
Cash Flow
Kirby continued to generate strong cash flow during 2010 with
EBITDA of $294.8 million. The
cash flow was used to fund capital expenditures of $136.8 million, including $74.3 million for new tank barge and towboat
construction and $62.5 million
primarily for upgrades to the existing fleet. The cash flow
was also used to purchase $23.8
million of Kirby common stock, or 618,000 shares, during
2010. Total debt as of December 31,
2010 was $200.1 million,
consisting predominately of a $200
million private placement loan that matures in 2013.
Kirby's debt-to-capitalization ratio was 14.7% at
December 31, 2010. Cash and
cash equivalents at December 31, 2010
were $195.6 million compared with
$97.8 million at December 31, 2009.
Outlook
Commenting on the 2011 first quarter and full year market
conditions and guidance, Mr. Pyne said, "Our guidance for the 2011
first quarter is $.56 to $.61 per
share. This compares with $.46
per share for the 2010 first quarter that included a $.05 per share charge for retirements and shore
staff reductions. Our 2011 first quarter guidance includes
unfavorable winter weather conditions at various severity levels
and equipment utilization from the mid to high 80% range. For the
2011 year, our guidance range is $2.35 to
$2.55 per share compared with $2.15 per share for 2010. Our low end
guidance assumes equipment utilization will be consistent with
current utilization throughout 2011, and term contract renewal and
spot contract pricing will improve modestly later in the year.
Our high end guidance assumes a continued modest improvement
in equipment utilization, some reduction in excess industry-wide
tank barge capacity and modest improvement in term contract renewal
and spot contract pricing throughout 2011. Both our 2011 year
low end and high end guidance assumes our diesel engine services
segment will continue to face challenges in its Gulf Coast oil
services market, with some gradual improvement as 2011 progresses,
and assumes stable Midwest and East Coast marine markets, and a
stable power generation market. Our guidance represents our
current judgment with respect to our 2011 performance as
the United States economy
continues its slow recovery process. Our 2011 capital
spending guidance range is $170 to $180
million, including approximately $100
million for the construction of 40 new tank barges and three
new towboats."
Commenting on the financial condition of Kirby, Mr. Pyne said,
"Kirby remains in excellent financial condition with an investment
grade rated balance sheet, sustainable cash flows and low debt
levels. We currently have $209
million of cash on our balance sheet. During the
recessionary years of 2009 and 2010 we removed a significant amount
of cost from our businesses, thereby allowing us to maintain marine
transportation and diesel engine services operating margins above
20% and 10%, respectively. For 2011, we will continue to
focus on the areas we can control: safety, customer service,
cost, upgrading our fleet and looking for opportunities to grow our
marine transportation and diesel engine services businesses."
Conference Call
A conference call is scheduled at 10:00
a.m. central time tomorrow, Thursday, January 27, 2011, to
discuss the 2010 fourth quarter and year performance as well as the
outlook for the 2011 first 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
28764805. An audio playback will be available at 1:00 p.m. central time on Thursday, January 27, through 5:00 p.m. central time on Friday, February 25, 2011 by dialing 888-843-7419
for domestic and 630-652-3042 for international callers. The
passcode is 28764805#. 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 2010 and 2009 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.
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|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
|
|
|
|
|
Fourth
Quarter
|
Year
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited,
$ in thousands except per share amounts)
|
|
Revenues:
|
|
|
|
|
|
Marine
transportation
|
$
232,443
|
$
216,904
|
$
915,046
|
$
881,298
|
|
Diesel engine
services
|
53,875
|
42,684
|
194,511
|
200,860
|
|
|
286,318
|
259,588
|
1,109,557
|
1,082,158
|
|
Costs and expenses:
|
|
|
|
|
|
Costs of sales and
operating expenses
|
177,328
|
150,843
|
683,236
|
637,833
|
|
Selling, general and
administrative
|
27,328
|
29,908
|
117,694
|
121,401
|
|
Taxes, other than on
income
|
3,038
|
2,837
|
13,209
|
12,104
|
|
Depreciation and
amortization
|
24,937
|
24,244
|
95,296
|
93,968
|
|
Impairment of
goodwill
|
—
|
1,901
|
—
|
1,901
|
|
Loss (gain) on disposition
of assets
|
23
|
38
|
78
|
(1,079)
|
|
|
232,654
|
209,771
|
909,513
|
866,128
|
|
Operating
income
|
53,664
|
49,817
|
200,044
|
216,030
|
|
Other income
|
383
|
233
|
556
|
608
|
|
Interest expense
|
(2,845)
|
(2,693)
|
(10,960)
|
(11,080)
|
|
Earnings before taxes on
income
|
51,202
|
47,357
|
189,640
|
205,558
|
|
Provision for taxes on
income
|
(19,279)
|
(17,716)
|
(72,258)
|
(78,020)
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|
|
|
|
|
|
|
Net earnings
|
31,923
|
29,641
|
117,382
|
127,538
|
|
Less: Net earnings attributable
to noncontrolling interests
|
(303)
|
(439)
|
(1,133)
|
(1,597)
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|
|
|
|
|
|
|
Net earnings attributable
to Kirby
|
$
31,620
|
$
29,202
|
$
116,249
|
$
125,941
|
|
|
|
|
|
|
|
Net earnings per share
attributable to Kirby common stockholders:
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|
|
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|
Basic
|
$
.59
|
$
.54
|
$
2.16
|
$
2.34
|
|
Diluted
|
$
.59
|
$
.54
|
$ 2.15
|
$ 2.34
|
|
Common stock outstanding (in
thousands):
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|
|
|
|
|
Basic
|
53,041
|
53,252
|
53,331
|
53,192
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|
Diluted
|
53,194
|
53,374
|
53,466
|
53,313
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|
|
|
|
|
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|
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CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
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|
|
|
|
|
|
Fourth
Quarter
|
Year
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited,
$ in thousands)
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|
EBITDA: (1)
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|
|
|
|
|
Net earnings attributable
to Kirby
|
$
31,620
|
$
29,202
|
$
116,249
|
$
125,941
|
|
Interest
expense
|
2,845
|
2,693
|
10,960
|
11,080
|
|
Provision for taxes on
income
|
19,279
|
17,716
|
72,258
|
78,020
|
|
Depreciation and
amortization
|
24,937
|
24,244
|
95,296
|
93,968
|
|
|
$
78,681
|
$
73,855
|
$
294,763
|
$
309,009
|
|
|
|
|
|
|
|
Capital expenditures
|
$ 28,805
|
$ 29,688
|
$
136,841
|
$
192,660
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
2010
|
2009
|
|
|
|
|
(unaudited,
$ in thousands)
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|
Cash and cash
equivalents
|
|
|
$
195,600
|
$ 97,836
|
|
Long-term debt, including
current portion
|
|
|
$
200,134
|
$
200,239
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|
Total equity
|
|
|
$
1,159,139
|
$
1,056,095
|
|
Debt to capitalization
ratio
|
|
|
14.7%
|
15.9%
|
|
|
|
|
|
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MARINE
TRANSPORTATION STATEMENTS OF EARNINGS
|
|
|
Fourth
Quarter
|
Year
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited,
$ in thousands)
|
|
|
|
|
|
|
|
Marine transportation
revenues
|
$ 232,443
|
$ 216,904
|
$ 915,046
|
$ 881,298
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
Costs of sales and
operating expenses
|
137,876
|
120,962
|
540,427
|
494,139
|
|
Selling, general and
administrative
|
18,967
|
19,850
|
80,938
|
80,897
|
|
Taxes, other than on
income
|
2,888
|
2,331
|
12,213
|
10,587
|
|
Depreciation and
amortization
|
23,319
|
22,625
|
88,710
|
87,589
|
|
|
183,050
|
165,768
|
722,288
|
673,212
|
|
|
|
|
|
|
|
Operating
income
|
$
49,393
|
$
51,136
|
$
192,758
|
$
208,086
|
|
|
|
|
|
|
|
Operating
margins
|
21.2%
|
23.6%
|
21.1%
|
23.6%
|
|
|
|
|
|
|
|
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|
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DIESEL
ENGINE SERVICES STATEMENTS OF EARNINGS
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|
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Fourth
Quarter
|
Year
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited,
$ in thousands)
|
|
|
|
|
|
|
|
Diesel engine services
revenues
|
$ 53,875
|
$ 42,684
|
$ 194,511
|
$ 200,860
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
Costs of sales and
operating expenses
|
39,452
|
29,881
|
142,809
|
143,694
|
|
Selling, general and
administrative
|
6,448
|
7,438
|
26,131
|
30,440
|
|
Taxes, other than
income
|
141
|
494
|
963
|
1,474
|
|
Depreciation and
amortization
|
941
|
1,057
|
4,055
|
4,247
|
|
|
46,982
|
38,870
|
173,958
|
179,855
|
|
|
|
|
|
|
|
Operating
income
|
$
6,893
|
$
3,814
|
$
20,553
|
$
21,005
|
|
|
|
|
|
|
|
Operating
margins
|
12.8%
|
8.9%
|
10.6%
|
10.5%
|
|
|
|
|
|
|
|
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|
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OTHER COSTS
AND EXPENSES
|
|
|
|
|
|
|
Fourth
Quarter
|
Year
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited,
$ in thousands)
|
|
|
|
|
|
|
|
General corporate
expenses
|
$
2,599
|
$
3,194
|
$
13,189
|
$
12,239
|
|
|
|
|
|
|
|
Loss (gain) on disposition of
assets
|
$
23
|
$
38
|
$
78
|
$
(1,079)
|
|
Impairment of
goodwill
|
$
—
|
$
1,901
|
$
—
|
$
1,901
|
|
|
|
|
|
|
|
|
|
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MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS
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|
|
|
|
Fourth
Quarter
|
Year
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
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Ton Miles (in millions)
(2)
|
3,317
|
2,945
|
12,957
|
11,977
|
|
Revenue/Ton Mile (cents/tm)
(3)
|
6.7
|
7.1
|
6.8
|
7.1
|
|
Towboats operated (average)
(4)
|
220
|
212
|
221
|
220
|
|
Delay Days (5)
|
1,498
|
1,808
|
5,772
|
5,201
|
|
Average cost per gallon of fuel
consumed
|
$ 2.29
|
$ 1.98
|
$ 2.22
|
$ 1.72
|
|
Tank barges:
|
|
|
|
|
|
Active
|
825
|
863
|
|
Inactive
|
34
|
4
|
|
Barrel capacities (in
millions):
|
|
|
|
Active
|
15.9
|
16.7
|
|
Inactive
|
0.4
|
0.1
|
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(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.
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(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.
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(3)
|
Inland marine
transportation revenues divided by ton miles. Example:
Fourth quarter 2010 inland marine revenues of $223,365,000
divided by 3,317,000,000 marine transportation ton miles = 6.7
cents.
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(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.
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SOURCE Kirby Corporation