KEX Kirby Corporation

Kirby Corporation Announces 2004 Third Quarter and Nine Months Results - Earnings per share for the 2004 third quarter increased to $.53 from $.46 in the 2003 third quarter and to $1.44 for the first nine months of 2004 from $1.22 in the 2003 first nine months HOUSTON, Oct. 27 /PRNewswire-FirstCall/ -- Kirby Corporation (NYSE:KEX) ("Kirby") today announced net earnings for the third quarter ended September 30, 2004 of $13,250,000, or $.53 per share, an 18% improvement compared with $11,211,000, or $.46 per share, for the third quarter of 2003. The 2004 third quarter net earnings were in line with Kirby's published earnings guidance range of $.50 to $.54 per share. Consolidated revenues for the 2004 third quarter were $173,389,000, a 12% increase compared with $154,507,000 for the 2003 third quarter. Kirby reported record net earnings for the first nine months of 2004 of $36,048,000, or $1.44 per share, a 21% increase compared with $29,868,000, or $1.22 per share, for the first nine months of 2003. Consolidated revenues for the first nine months of 2004 were $501,580,000, a 9% increase compared with $461,446,000 for the first nine months of 2003. Marine transportation revenues and operating income for the 2004 third quarter increased 14% and 25%, respectively, compared with the third quarter of 2003. For the first nine months of 2004, marine transportation revenues and operating income increased 10% and 20%, respectively, when compared with the first nine months of 2003. The favorable results reflected strong petrochemical volumes as customers continued to run their plants at high utilization rates. Black oil volumes were strong, driven by high volumes of heavy refinery residual oil by-products, and refined products volumes reflected typical Midwest summer demand. Agricultural chemical volumes remained weak despite low Midwest inventory levels. The marine transportation 2004 third quarter and first nine months results were impacted by the following: -- Hurricane Ivan -- Made landfall near Gulf Shores, Alabama on September 16 and resulted in customer petrochemical plant and refinery closures, diversion of marine equipment and closure of the Gulf Intracoastal Waterway along the projected path of the storm. The initial projected path was from New Orleans to the Florida panhandle. Hurricane Ivan impacted the inland marine operations, as well as the operations of the 35% owned offshore partnership with a Florida utility, lowering Kirby's results by an estimated $.02 per share. -- Diesel Fuel -- The average price per gallon of diesel fuel consumed increased to $1.16 for the 2004 third quarter compared with $1.00 for the first six months of 2004. Higher fuel prices lowered Kirby's results by an estimated $.01 per share. -- McAlpine Lock Closure -- Major lock on the Ohio River closed for repair for 12 days in August, stopping all waterborne traffic with a destination upriver of Louisville, Kentucky, including Cincinnati and Pittsburgh. The closure of the lock lowered Kirby's results by an estimated $.01 per share, less than initially forecasted. -- Sale of Liquid Products Terminal -- Sale of the 50% owned Shreveport, La. terminal resulting in a third quarter 2004 loss on the sale of $.015 per share. This loss is reflected in equity in earnings of marine affiliates. The diesel engine services segment's third quarter 2004 revenues were in line with the 2003 third quarter revenues. Operating income improved by 7%, principally from increased sales of higher margin power generation parts. The segment's Midwest dry cargo river market was enhanced with the April 2004 purchase of the diesel engine services operations of Walker Paducah Corp. The segment's power generation market benefited from direct parts sales to a major power customer, while the rail market benefited from overall strong direct parts sales. The Gulf Coast offshore oil service market, and East Coast and West Coast marine markets remained weak, thereby negatively affecting the segment's 2004 third quarter results. Equity in earnings of marine affiliates for the 2004 third quarter was a loss of $782,000, and included the loss on the sale of the terminal and the negative impacts on the Company's 35% owned offshore partnership from Hurricanes Ivan, Frances and Jeanne. Joe Pyne, Kirby's President and Chief Executive Officer, commented, "Despite some challenges in the third quarter with respect to hurricanes, fuel, lock closures and the sale of the terminal, business levels allowed us to continue to perform well. Had it not been for these challenges, we would have been comfortably above the high end of our forecasted range. We are forecasting net earnings for the 2004 fourth quarter in the $.50 to $.54 per share range. This guidance compares with net earnings of $.45 per share reported for the 2003 fourth quarter. Our 2004 fourth quarter guidance range is based on firm petrochemical and black oil volumes, normal winter upriver refined products volumes, stronger imported agricultural chemical volumes and increased delay days resulting from anticipated winter weather conditions." Mr. Pyne further commented, "For the 2004 year, Kirby's earnings per share guidance is $1.94 to $1.98. This guidance compares with 2003 year earnings per share of $1.67. Capital spending guidance for 2004 has been revised to $90 to $93 million from $85 to $90 million and includes approximately $42.5 million for the construction of 16 new 30,000 barrel petrochemical tank barges and 10 new 30,000 barrel black oil tank barges. The increased capital spending guidance reflects higher steel prices, progress payments on barges scheduled for delivery in 2005 and the timing of capital upgrades on existing equipment." This earnings press release includes marine transportation performance measures for both the 2004 and 2003 third quarters and first nine 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, October 28, 2004, to discuss the 2004 third quarter and first nine months, and the outlook for the 2004 fourth 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 October 29 through 6:00 p.m. on Friday, November 26, 2004, by dialing 800-642-1687 for domestic callers and 706-645-9291 for international callers. The conference ID number is 1755171. The conference call can also be accessed by visiting Kirby's homepage at http://www.kirbycorp.com/ or at http://audioevent.mshow.com/191510 . 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 third quarters and first nine 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, October 28, 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/191510 A summary of the results for the third quarter and first nine months follows: CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Third Quarter Nine Months 2004 2003 2004 2003 (unaudited, $ in thousands except per share amounts) Revenues: Marine transportation $153,114 $134,396 $437,672 $396,617 Diesel engine services 20,275 20,111 63,908 64,829 173,389 154,507 501,580 461,446 Costs and expenses: Costs of sales and operating expenses 108,690 98,800 320,008 300,804 Selling, general and administrative 21,331 18,069 60,775 54,381 Taxes, other than on income 3,398 3,385 10,800 9,921 Depreciation and other amortization 14,015 13,369 41,403 38,495 Loss (gain) on disposition of assets 43 (71) 241 62 147,477 133,552 433,227 403,663 Operating income 25,912 20,955 68,353 57,783 Equity in earnings (loss) of marine affiliates (782) 1,022 534 2,209 Other expense (415) (134) (737) (736) Interest expense (3,344) (3,761) (10,008) (11,082) Earnings before taxes on income 21,371 18,082 58,142 48,174 Provision for taxes on income (8,121) (6,871) (22,094) (18,306) Net earnings $13,250 $11,211 $36,048 $29,868 Net earnings per share of common stock: Basic $.54 $.46 $1.48 $1.24 Diluted $.53 $.46 $1.44 $1.22 Common stock outstanding (in thousands): Basic 24,507 24,166 24,435 24,112 Diluted 25,190 24,545 25,066 24,429 CONDENSED CONSOLIDATED FINANCIAL INFORMATION Third Quarter Nine Months 2004 2003 2004 2003 (unaudited, $ in thousands except per share amounts) EBITDA: (A) Net earnings $13,250 $11,211 $36,048 $29,868 Interest expense 3,344 3,761 10,008 11,082 Provision for taxes on income 8,121 6,871 22,094 18,306 Depreciation and other amortization 14,015 13,369 41,403 38,495 $38,730 $35,212 $109,553 $97,751 EBITDA per share - diluted (A) $1.54 $1.43 $4.37 $4.00 Capital expenditures $19,750 $14,464 $75,810 $52,187 Acquisitions of businesses and marine equipment $--- $--- $11,085 $37,816 September 30, 2004 2003 (unaudited, $ in thousands) Long-term debt, including current portion $251,397 $270,049 Stockholders' equity $414,634 $356,590 Debt to capitalization ratio 37.7% 43.1% MARINE TRANSPORTATION STATEMENTS OF EARNINGS Third Quarter Nine Months 2004 2003 2004 2003 (unaudited, $ in thousands) Marine transportation revenues $153,114 $134,396 $437,672 $396,617 Costs and expenses: Costs of sales and operating expenses 93,579 83,492 272,626 251,713 Selling, general and administrative 16,887 14,216 47,619 42,836 Taxes, other than on income 3,293 3,206 10,475 9,450 Depreciation and other amortization 13,286 12,654 39,148 36,304 127,045 113,568 369,868 340,303 Operating income $26,069 $20,828 $67,804 $56,314 Operating margins 17.0% 15.5% 15.5% 14.2% DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS Third Quarter Nine Months 2004 2003 2004 2003 (unaudited, $ in thousands) Diesel engine services revenues $20,275 $20,111 $63,908 $64,829 Costs and expenses: Costs of sales and operating expenses 15,102 15,246 47,269 48,951 Selling, general and administrative 3,041 2,859 9,092 8,607 Taxes, other than income 95 81 268 241 Depreciation and amortization 264 272 883 788 18,502 18,458 57,512 58,587 Operating income $1,773 $1,653 $6,396 $6,242 Operating margins 8.7% 8.2% 10.0% 9.6% OTHER COSTS AND EXPENSES Third Quarter Nine Months 2004 2003 2004 2003 (unaudited, $ in thousands) General corporate expenses $1,887 $1,597 $5,606 $4,711 Loss (gain) on disposition of assets $43 $(71) $241 $62 MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS Third Quarter Nine Months 2004 2003 2004 2003 Ton Miles (in millions) (B) 4,238 4,021 12,294 11,467 Revenue/Ton Mile (cents/tm) (C) 3.6 3.3 3.6 3.5 Towboats operated (average) (D) 237 222 235 226 Delay Days (E) 1,658 1,001 5,839 4,852 Average cost per gallon of fuel consumed $1.16 $.86 $1.04 $.89 Tank barges: Active 888 882 Inactive 49 70 Barrel capacities (in millions): Active 16.4 16.0 Inactive .9 1.3 (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: Third quarter 2004 revenues of $153,114,000 divided by 4,238,000,000 ton miles = 3.6 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/191510

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