- 2009 second quarter earnings per share were $.63 compared with
$.74 earned in the 2008 second quarter - 2009 third quarter
earnings per share guidance is $.62 to $.67 versus $.77 earned in
the 2008 third quarter - 2009 year earnings per share guidance
revised to $2.40 to $2.50 versus $2.91 earned in 2008 HOUSTON, July
29 /PRNewswire-FirstCall/ -- Kirby Corporation ("Kirby") (NYSE:KEX)
today announced net earnings for the second quarter ended June 30,
2009 of $33.7 million, or $.63 per share, compared with net
earnings of $40.3 million, or $.74 per share, for the 2008 second
quarter. Kirby's published 2009 second quarter guidance range was
$.52 to $.62 per share. Consolidated revenues for the 2009 second
quarter were $272.7 million compared with $348.3 million reported
for the 2008 second quarter. Joe Pyne, Kirby's President and Chief
Executive Officer, commented, "The decline in our marine
transportation and diesel engine services demand reflects a
difficult economic environment. Our 2009 first quarter actions
focused on early retirements, staff reductions, cost reductions and
efficiency initiatives. Our marine transportation mix of business,
which is heavily weighted to term contracts, softened the negative
impact of lower demand on our second quarter operating results.
Marine transportation demand across all four of our market segments
remained below prior year levels. Our diesel engine services
segment's service levels and direct parts sales remained weak as
our customers continued to defer maintenance, particularly in the
Gulf Coast oil services market." Kirby reported net earnings for
the 2009 first six months of $61.7 million, or $1.15 per share,
compared with $77.0 million, or $1.42 per share, for the first half
of 2008. Consolidated revenues for the 2009 first six months were
$550.4 million compared with $678.8 million for the first six
months of 2008. During the 2009 first quarter, Kirby took specific
steps to reduce overhead and lower expenditures, taking a $4.0
million charge before taxes, or $.05 per share. The shore staffs of
the marine transportation and diesel engine services segments were
reduced by approximately 6% through early retirements and staff
reductions. In addition, all officer and management salaries were
frozen at 2008 levels. On-going cost reduction efforts include a
significant reduction in the number of chartered towboats operated
and the laying up of Kirby owned towboats and tank barges. Kirby
estimates that the 2009 first quarter early retirements and staff
reductions charge had a positive $.02 per share impact on the
second quarter results, will result in a savings of $.02 per share
for the 2009 year, net of the $.05 per share first quarter charge,
and will result in a savings of $.08 per share for 2010. Segment
Results - Marine Transportation Marine transportation revenues and
operating income for the 2009 second quarter decreased 23% and 15%,
respectively, compared with the second quarter of 2008. The
reductions reflect lower petrochemicals, black oil products,
refined petroleum products and agricultural chemicals demand,
driven by the current global economic recession and lower pricing.
In addition, lower diesel fuel costs resulted in lower revenues
associated with the pass through of diesel fuel to the customer
through fuel escalation and de-escalation clauses in term
contracts. Petrochemical demand of more finished products into the
Midwest continued to modestly improve and demand along the Gulf
Coast appears to be stabilized when compared with the 2009 first
quarter. Black oil demand remained relatively stable while refined
products demand remained weak. Agricultural chemical demand also
remained weak as the spring Midwest inventory fill did not occur
primarily due to heavy spring rain which reduced the farmers'
ability to apply fertilizer. The number of time charters, or day
rate contracts, declined during the quarter as customers returned
equipment they did not need or became comfortable that their
requirements could be filled in the spot market. The marine
transportation segment operated an average of 219 towboats during
the 2009 second quarter and 226 towboats during the 2009 first six
months compared with 259 towboats operated during the 2008
corresponding periods. As demand weakened, Kirby released chartered
towboats and laid-up Kirby owned towboats to balance its horsepower
requirements with volume demand. Going forward, Kirby will continue
to monitor its towboat requirements and downsize or increase its
towboat fleet as market changes warrant. The marine transportation
operating margin improved to 24.4% for the 2009 second quarter
compared with 22.0% for the 2008 second quarter. The improved
operating margin, despite the decrease in demand, reflected the
positive impact of Kirby's cost reduction and efficiency
initiatives, lower insurance claim losses, more efficient
operations at lower utilization rates and more favorable operating
conditions compared with the 2008 corresponding period. Segment
Results - Diesel Engine Services The diesel engine services
revenues and operating income for the 2009 second quarter decreased
17% and 28%, respectively, compared with the 2008 second quarter.
The marine market remained weak as Gulf Coast offshore oil services
and inland marine customers, and East and West Coast customers
deferred maintenance on equipment in response to the economic
slowdown. The medium-speed railroad market also remained weak as
customers deferred maintenance. The medium-speed power generation
market benefited from favorable engine-generator set upgrades
projects and the international offshore oil services market was
stronger during the second quarter. The diesel engine services
operating margin was 13.6% for the 2009 second quarter compared
with 15.6% for the 2008 second quarter. Cash Flow Continued strong
cash flow for the 2009 first half, aided by a reduction in accounts
receivable, was used to fund capital expenditures of $116.6
million, including $84.0 million for new tank barge and towboat
construction and $32.6 million for upgrades to the existing fleet,
and to reduce debt by $36.9 million. Total debt as of June 30, 2009
was $210.4 million and the debt-to-capitalization ratio was 17.9%,
down from 21.7% at December 31, 2008 and 25.6% at June 30, 2008.
Outlook Commenting on the 2009 third quarter market conditions and
guidance, Mr. Pyne said, "For the 2009 third quarter, our earnings
guidance is $.62 to $.67 per share compared with $.77 per share for
the 2008 third quarter. For the 2009 year, we are tightening our
earnings guidance to $2.40 to $2.50 per share compared with net
earnings for the 2008 year of $2.91 per share. We continue to see
some improved demand in our upriver movements of petrochemicals and
stable demand in the balance of our marine transportation markets.
While upriver movements of petrochemicals historically have been a
leading indicator for both positive and negative demand going
forward, it is just too early to tell if this improvement in
upriver volumes will continue. It appears to us that our customers
are fine tuning their volumes to what they see as sustainable
demand. We anticipate our diesel engine services business will
continue to face challenges for the balance of 2009 as customers
continue to defer maintenance due to reduced utilization of their
equipment. Our 2009 capital spending guidance range remains at $180
to $190 million, which includes approximately $135 million for the
construction of 46 new tank barges and five towboats." Conference
Call A conference call is scheduled at 10:00 a.m. central time
tomorrow, Thursday, July 30, 2009, to discuss the 2009 second
quarter performance as well as the outlook for the 2009 third
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
24962345. An audio playback will be available at 1:00 p.m. central
time on Thursday, July 30, through 6:00 p.m. central time on
Friday, August 28, 2009, 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 by 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 2008 and
2007 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, 2008 filed with the Securities and Exchange
Commission. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Second
Quarter Six Months 2009 2008 2009 2008 (unaudited, $ in thousands
except per share amounts) Revenues: Marine transportation $217,906
$281,906 $436,927 $543,134 Diesel engine services 54,837 66,354
113,477 135,696 ------ ------ ------- ------- 272,743 348,260
550,404 678,830 ------- ------- ------- ------- Costs and expenses:
Costs of sales and operating expenses 160,710 220,259 329,804
428,605 Selling, general and administrative 28,734 33,451 63,544
66,323 Taxes, other than on income 3,193 3,455 6,278 6,988
Depreciation and amortization 22,519 22,385 44,795 44,712 Gain on
disposition of assets (120) (500) (364) (442) ----- ----- -----
----- 215,036 279,050 444,057 546,186 ------- ------- -------
------- Operating income 57,707 69,210 106,347 132,644 Other income
(expense) 91 (12) 186 (108) Interest expense (2,793) (3,508)
(5,606) (7,290) ------- ------- ------- ------- Earnings before
taxes on income 55,005 65,690 100,927 125,246 Provision for taxes
on income (21,020) (25,039) (38,478) (47,787) -------- --------
-------- -------- Net earnings 33,985 40,651 62,449 77,459 Less:
Net earnings attributable to noncontrolling interests (266) (317)
(724) (478) ----- ----- ----- ----- Net earnings attributable to
Kirby $33,719 $40,334 $61,725 $76,981 ======= ======= =======
======= Net earnings per share attributable to Kirby common
stockholders: (1) Basic $.63 $.75 $1.15 $1.43 Diluted $.63 $.74
$1.15 $1.42 Common stock outstanding (in thousands): (1) Basic
53,185 53,420 53,149 53,288 Diluted 53,273 53,773 53,270 53,663
CONDENSED CONSOLIDATED FINANCIAL INFORMATION Second Quarter Six
Months 2009 2008 2009 2008 (unaudited, $ in thousands) EBITDA: (2)
Net earnings attributable to Kirby $33,719 $40,334 $61,725 $76,981
Interest expense 2,793 3,508 5,606 7,290 Provision for taxes on
income 21,020 25,039 38,478 47,787 Depreciation and amortization
22,519 22,385 44,795 44,712 ------ ------ ------ ------ $80,051
$91,266 $150,604 $176,770 ======= ======= ======== ======== Capital
expenditures $51,763 $57,758 $116,608 $106,511 Acquisitions of
businesses and marine equipment $- $3,334 $- $5,134 June 30, 2009
2008 (unaudited, $ in thousands) Long-term debt, including current
portion $210,411 $298,889 Total equity $966,346 $867,526 Debt to
capitalization ratio 17.9% 25.6% MARINE TRANSPORTATION STATEMENTS
OF EARNINGS Second Quarter Six Months 2009 2008 2009 2008
(unaudited, $ in thousands) Marine transportation revenues $217,906
$281,906 $436,927 $543,134 -------- -------- -------- --------
Costs and expenses: Costs of sales and operating expenses 122,152
174,185 248,017 333,834 Selling, general and administrative 18,959
21,597 42,424 43,905 Taxes, other than on income 2,713 3,188 5,504
6,423 Depreciation and amortization 20,945 20,782 41,627 41,302
------ ------ ------ ------ 164,769 219,752 337,572 425,464 -------
------- ------- ------- Operating income $53,137 $62,154 $99,355
$117,670 ======= ======= ======= ======== Operating margins 24.4%
22.0% 22.7% 21.7% ===== ===== ===== ===== DIESEL ENGINE SERVICES
STATEMENTS OF EARNINGS Second Quarter Six Months 2009 2008 2009
2008 (unaudited, $ in thousands) Diesel engine services revenues
$54,837 $66,354 $113,477 $135,696 ------- ------- -------- --------
Costs and expenses: Costs of sales and operating expenses 38,558
46,074 81,787 94,771 Selling, general and administrative 7,293
8,510 16,256 16,342 Taxes, other than income 470 254 753 528
Depreciation and amortization 1,059 1,160 2,137 2,594 ----- -----
----- ----- 47,380 55,998 100,933 114,235 ------ ------ -------
------- Operating income $7,457 $10,356 $12,544 $21,461 ======
======= ======= ======= Operating margins 13.6% 15.6% 11.1% 15.8%
===== ===== ===== ===== OTHER COSTS AND EXPENSES Second Quarter Six
Months 2009 2008 2009 2008 (unaudited, $ in thousands) General
corporate expenses $3,007 $3,800 $5,916 $6,929 ====== ====== ======
====== Gain on disposition of assets $120 $500 $364 $442 ==== ====
==== ==== MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS Second
Quarter Six Months 2009 2008 2009 2008 Ton Miles (in millions) (3)
2,995 3,710 5,775 7,516 Revenue/Ton Mile (cents/tm) (4) 7.0 7.2 7.3
6.9 Towboats operated (average) (5) 219 259 226 259 Delay Days (6)
1,141 1,914 2,705 4,912 Average cost per gallon of fuel consumed
$1.43 $3.56 $1.49 $3.13 Tank barges: Active 894 918 Inactive 54 65
Barrel capacities (in millions): Active 17.1 17.5 Inactive 1.0 1.2
(1) Effective January 1, 2009, Kirby adopted FASB Staff Position
No. EITF 03-6-1 "Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities,"
("FSP EITF 03-6-1") which requires unvested share-based payment
awards with non-forfeitable rights to receive dividends or dividend
equivalents (whether paid or unpaid) to be considered participating
securities for the purposes of applying the two-class method of
calculating earnings per share. Accordingly, restricted stock
granted under Kirby's stock-based compensation plans are treated as
participating securities under the two-class method of determining
earnings per share and earnings per share for prior periods have
been restated to conform to FSP EITF 03- 6-1. The adoption of FSP
EITF 03-6-1 lowered basic earnings per common share for the six
months ended June 30, 2008 by $.01. (2) 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. (3) 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. (4) Inland marine transportation revenues
divided by ton miles. Example: Second quarter 2009 inland marine
revenues of $209,278,000 divided by 2,995,000,000 marine
transportation ton miles = 7.0 cents. (5) Towboats operated are the
average number of owned and chartered towboats operated during the
period. (6) 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/
Copyright