KEX Kirby Corporation

Kirby Corporation Announces Record 2004 Second Quarter and Six Months Results - 2004 second quarter earnings per share were $.55 compared with $.48 earned in the 2003 second quarter HOUSTON, July 28 /PRNewswire-FirstCall/ -- Kirby Corporation (NYSE:KEX) ("Kirby") today announced record net earnings for the second quarter ended June 30, 2004 of $13,778,000, or $.55 per share, compared with $11,789,000, or $.48 per share, for the second quarter of 2003. The 2004 second quarter net earnings were slightly above Kirby's published earnings guidance range of $.50 to $.54 per share. Consolidated revenues for the 2004 second quarter were $170,876,000 compared with $158,739,000 for the 2003 second quarter. Kirby reported record net earnings for the first six months of 2004 of $22,798,000, or $.91 per share, compared with $18,657,000, or $.77 per share, for the first six months of 2003. Consolidated revenues for the first six months of 2004 were $328,191,000 compared with $306,939,000 for the first half of 2003. Marine transportation revenues increased 9% for the 2004 second quarter compared with the second quarter of 2003, while operating income increased 14% during the same period. For the first six months of 2004, marine transportation revenues increased 9% and operating income increased 18% when compared with the 2003 first half. The favorable results were attributable to strong petrochemical and black oil products volumes, and normal seasonal refined products volumes, offset to some degree by weak liquid fertilizer volumes. The diesel engine services segment's second quarter 2004 revenues and operating income were slightly above 2003 second quarter levels. During the 2004 second quarter, the Midwest dry cargo river market continued to improve and its operations were enhanced with the April 2004 purchase of the diesel engine services operations of Walker Paducah. The segment's rail market benefited from several large orders from transit customers during the 2004 second quarter. A continued weak Gulf Coast offshore oil service market, as well as weak East Coast and West Coast marine markets, negatively affected the segment's 2004 second quarter results. Joe Pyne, Kirby's President and Chief Executive Officer, commented, "We are encouraged by the continued improvement in our petrochemical and black oil products markets. The petrochemical and black oil markets contributed 68% and 18%, respectively, of our 2004 first half marine transportation revenues. We are forecasting net earnings for the 2004 third quarter in the $.50 to $.54 per share range. This guidance compares with net earnings of $.46 per share reported for the 2003 third quarter. Our 2004 third quarter guidance is based on similar petrochemical and black oil volumes, as well as a normal refined products market and an improved liquid fertilizer market. The third quarter will be negatively impacted by the closure of the McAlpine lock on the Ohio River for major repairs for approximately two weeks in August. The lock closure will stop all waterborne traffic on the Ohio River with a destination upriver of Louisville, Kentucky, including Cincinnati and Pittsburgh. We estimate the impact of the McAlpine lock closure on the 2004 third quarter results will be approximately $.02 to $.03 per share." Mr. Pyne further commented, "For the 2004 year, we are tightening our earnings guidance to $1.90 to $1.95 per share. This guidance compares with 2003 year net earnings of $1.67 per share. Capital spending guidance for 2004 remains in the $85 to $90 million range and includes approximately $41 million for the construction of 16 new 30,000 barrel petrochemical tank barges and 10 new 30,000 barrel black oil tank barges." This earnings press release includes marine transportation performance measures for both the 2004 and 2003 second quarters and first six months. The performance measures include ton miles, revenues per ton mile, towboats operated and delay days. Comparable performance measures for the 2003 and 2002 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 9:00 a.m. central time tomorrow, Thursday, July 29, 2004, to discuss the 2004 second quarter and first six months, and the outlook for the 2004 third quarter and full 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 11:00 a.m. central time on July 29 through 6:00 p.m. on Friday, August 27, 2004, by dialing 800-642-1687 for domestic callers and 706-645-9291 for international callers. The conference ID number is 8949236. The conference call can also be accessed by visiting Kirby's homepage at http://www.kirbycorp.com/ or at http://audioevent.mshow.com/178187 . 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 2004 and 2003 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. Through the diesel engine services segment, Kirby provides after-market service for large medium-speed diesel engines used in marine, power generation and industrial, 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 the number of acquisitions made by Kirby. A listing of additional risk factors can be found in Kirby's annual report on Form 10-K for the year ended December 31, 2003, filed with the Securities and Exchange Commission. CONFERENCE CALL INFORMATION Date: Thursday, July 29, 2004 Time: 9:00 a.m. central time U.S.: 888-328-2514 Int'l: 706-679-3262 Leader: Steve Holcomb Passcode: Kirby Webcast: http://www.kirbycorp.com/ or http://audioevent.mshow.com/178187 A summary of the results for the second quarter and first six months follows: CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Second Quarter Six Months 2004 2003 2004 2003 (unaudited, $ in thousands except per share amounts) Revenues: Marine transportation $149,065 $137,156 $284,558 $262,221 Diesel engine services 21,811 21,583 43,633 44,718 170,876 158,739 328,191 306,939 Costs and expenses: Costs of sales and operating expenses 108,391 101,153 211,318 202,004 Selling, general and administrative 19,479 18,751 39,444 36,312 Taxes, other than on income 4,150 3,485 7,402 6,536 Depreciation and other amortization 13,591 12,894 27,388 25,126 Loss on disposition of assets 196 126 198 133 145,807 136,409 285,750 270,111 Operating income 25,069 22,330 42,441 36,828 Equity in earnings of marine affiliates 494 751 1,316 1,187 Other expense (51) (199) (322) (602) Interest expense (3,290) (3,867) (6,664) (7,321) Earnings before taxes on income 22,222 19,015 36,771 30,092 Provision for taxes on income (8,444) (7,226) (13,973) (11,435) Net earnings $13,778 $11,789 $22,798 $18,657 Net earnings per share of common stock: Basic $.56 $.49 $ .93 $.77 Diluted $.55 $.48 $ .91 $.77 Common stock outstanding (in thousands): Basic 24,434 24,105 24,392 24,084 Diluted 25,093 24,412 25,003 24,370 CONDENSED CONSOLIDATED FINANCIAL INFORMATION Second Quarter Six Months 2004 2003 2004 2003 (unaudited, $ in thousands except per share amounts) EBITDA: (A) Net earnings $13,778 $11,789 $22,798 $18,657 Interest expense 3,290 3,867 6,664 7,321 Provision for taxes on income 8,444 7,226 13,973 11,435 Depreciation and other amortization 13,591 12,894 27,388 25,126 $39,103 $35,776 $70,823 $62,539 EBITDA per share - diluted (A) $1.56 $1.47 $2.83 $2.57 Capital expenditures $32,013 $18,971 $56,060 $37,723 Acquisitions of businesses and marine equipment $9,975 $1,500 $11,085 $37,816 June 30, 2004 2003 (unaudited, $ in thousands) Long-term debt, including current portion $251,453 $295,133 Stockholders' equity $402,622 $343,026 Debt to capitalization ratio 38.4% 46.2% MARINE TRANSPORTATION STATEMENTS OF EARNINGS Second Quarter Six Months 2004 2003 2004 2003 (unaudited, $ in thousands) Marine transportation revenues $149,065 $137,156 $284,558 $262,221 Costs and expenses: Costs of sales and operating expenses 92,081 85,050 179,047 168,221 Selling, general and administrative 15,228 14,837 30,732 28,620 Taxes, other than on income 4,049 3,342 7,182 6,244 Depreciation and other amortization 12,846 12,145 25,862 23,650 124,204 115,374 242,823 226,735 Operating income $24,861 $21,782 $41,735 $35,486 Operating margins 16.7% 15.9% 14.7% 13.5% DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS Second Quarter Six Months 2004 2003 2004 2003 (unaudited, $ in thousands) Diesel engine services revenues $21,811 $21,583 $43,633 $44,718 Costs and expenses: Costs of sales and operating expenses 16,233 16,076 32,167 33,705 Selling, general and administrative 3,017 2,994 6,051 5,748 Taxes, other than income 91 77 173 160 Depreciation and amortization 286 264 619 516 19,627 19,411 39,010 40,129 Operating income $2,184 $2,172 $4,623 $4,589 Operating margins 10.0% 10.1% 10.6% 10,3% OTHER COSTS AND EXPENSES Second Quarter Six Months 2004 2003 2004 2003 (unaudited, $ in thousands) General corporate expenses $1,780 $1,498 $3,719 $3,114 Loss on disposition of assets $196 $126 $198 $133 MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS Second Quarter Six Months 2004 2003 2004 2003 Ton Miles (in millions) (A) 4,321 3,991 8,056 7,446 Revenue/Ton Mile (cents/tm) (C) 3.5 3.4 3.5 3.5 Towboats operated (average) (D) 237 226 234 228 Delay Days (E) 1,822 1,268 4,181 3,851 Average cost per gallon of fuel consumed $1.01 $.81 $1.00 $.91 Tank barges: Active 887 897 Inactive 43 76 Barrel capacities (in millions): Active 16.3 16.3 Inactive .8 1.4 (A) 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. (B) 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. (C) Marine transportation revenues divided by ton miles. Example: Second quarter 2004 revenues of $149,065,000 divided by 4,321,000,000 ton miles = 3.5 cents. (D) Towboats operated are the average number of owned and chartered towboats operated during the period. (E) Delay days measures the lost time incurred by a tow (towboat and 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/ http://audioevent.mshow.com/178187

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