Kirby Corporation (“Kirby” or the “Company”) (NYSE: KEX) today
announced net earnings attributable to Kirby for the third quarter
ended September 30, 2020 of $27.5 million, or $0.46 per share,
compared with net earnings of $48.0 million or $0.80 per share for
the 2019 third quarter. Consolidated revenues for the 2020 third
quarter were $496.6 million compared with $666.8 million reported
for the 2019 third quarter.
David Grzebinski, Kirby’s President and Chief
Executive Officer, commented, “The COVID-19 pandemic and the
associated economic slowdown adversely impacted Kirby’s businesses
during the third quarter. Although general economic activity was
slightly improved and increased profitability was realized in the
distribution and services segment, the marine transportation
businesses experienced lower volumes and barge utilization.
“In marine transportation, our inland and
coastal businesses were heavily affected by weak demand for liquid
products including refined products, crude, and black oil.
Throughout the third quarter, refinery utilization was well below
historical norms as many of our customers experienced low consumer
demand, high product inventories, and unfavorable economics.
Additionally, a very active hurricane season resulted in further
reductions in volumes and widespread disruptions including
prolonged closures of some refineries, chemical plants, waterways,
and major ports. These challenging market conditions during the
quarter contributed to low barge utilization and limited spot
market activity.
“In distribution and services, financial results
sequentially improved during the third quarter as activity levels
began to recover, and we realized the benefit of cost reductions.
In commercial and industrial, activity levels in on-highway and
power generation increased as lockdowns eased and economic activity
rebounded. Additionally, we experienced higher utilization levels
in our power generation rental fleet as a result of hurricanes
along the Gulf Coast. In the oilfield, although activity remained
muted, U.S. frac activity levels improved from second quarter lows,
leading to modest increases in service demand and sales of pressure
pumping equipment. Overall, revenues increased 10% sequentially
with operating margin improving to breakeven,” Mr. Grzebinski
concluded.
Third Quarter 2020 Segment Results –
Marine Transportation Marine transportation revenues for
the 2020 third quarter were $320.6 million compared with $412.7
million for the 2019 third quarter. Operating income for the 2020
third quarter was $32.4 million compared with $72.7 million for the
2019 third quarter. Segment operating margin for the 2020 third
quarter was 10.1% compared with 17.6% for the 2019 third
quarter.
In the inland market, average barge utilization
was in the low 70% range during the 2020 third quarter compared to
the low 90% range in the 2019 third quarter. Barge volumes were
heavily impacted by lower refinery and chemical plant utilization
and reduced demand for refined products and petrochemicals.
Significant hurricane and tropical storm activity also contributed
to widespread and prolonged operational disruptions and lower
volumes along the Gulf Coast throughout the quarter. As a result of
lower barge utilization, average spot market pricing for the
quarter declined approximately 10% both sequentially and
year-on-year. Average term contract pricing on expiring contracts
was down in the low single digits. Revenues in the inland market
declined 22% compared to the 2019 third quarter due to the impact
of reduced barge utilization and lower fuel rebills, but were
partially offset by the Savage Inland Marine asset acquisition
which closed on April 1, 2020. During the third quarter, the inland
market represented 77% of segment revenues and had an operating
margin in the mid-teens.
In the coastal market, reduced demand for
refined products and black oil resulted in limited spot market
activity and barge utilization in the mid-70% range. Pricing in the
spot market was generally stable; however, average term contract
pricing declined in the mid-single digits year-on-year. Revenues in
the coastal market declined 25% compared to the 2019 third quarter
as a result of reduced spot market activity, lower fuel rebills,
retirements of three large capacity vessels, and delays associated
with hurricanes and tropical storms along the East and Gulf Coasts.
The coastal market represented 23% of segment revenues and had a
negative operating margin in the mid-single digits during the
quarter.
Third Quarter
2020 Segment Results –
Distribution and Services Distribution and
services revenues for the 2020 third quarter were $176.0 million
compared with $254.1 million for the 2019 third quarter. Operating
income for the 2020 third quarter was $1.1 million compared with
$9.1 million for the 2019 third quarter. Operating margin was 0.6%
for the 2020 third quarter compared with 3.6% for the 2019 third
quarter.
In the oil and gas market, revenues and
operating income declined compared to the 2019 third quarter due to
low oil prices and reduced oilfield activity which resulted in
limited customer demand for new and overhauled transmissions, parts
and service. The manufacturing business experienced a sharp
reduction in orders year-on-year with minimal deliveries of new and
remanufactured pressure pumping equipment. During the quarter, the
oil and gas market represented approximately 28% of segment
revenues and had a negative operating margin in the low double
digits.
In the commercial and industrial market,
revenues declined compared to the 2019 third quarter primarily due
to reduced economic activity which resulted in lower activity
levels in the on-highway and power generation businesses. The
marine business was also down year-on-year due to reduced major
overhaul activity and new engine sales. These reductions were
partially offset by the contribution from Convoy Servicing Company
(“Convoy”), a Thermo King distributor which was acquired in early
2020. During the quarter, the commercial and industrial market
represented approximately 72% of segment revenues and had an
operating margin in the mid-single digits.
Cash Generation For the 2020
third quarter, EBITDA was $85.7 million compared with $133.1
million for the 2019 third quarter. During the quarter, net cash
provided by operating activities was $117.7 million, some of which
was used to fund capital expenditures of $36.6 million. As of
September 30, 2020, the Company had $119.6 million of cash and cash
equivalents on the balance sheet. Total debt was $1,578.3 million,
reflecting a $64.5 million reduction compared to June 30, 2020, and
the debt-to-capitalization ratio was 33.9%.
2020 Outlook Commenting on the
fourth quarter outlook, Mr. Grzebinski said, “Although Kirby
continues to be challenged by unprecedented declines in demand as a
result of the COVID-19 pandemic, our business activity and
utilization levels have bottomed. Economic activity is slowly
improving, and we have seen pockets of increased demand. While this
is encouraging, in the fourth quarter our results are expected to
be impacted by continued low barge utilization and pricing
pressure, normal seasonality from weather in marine, and likely,
customer budget exhaustion in distribution and services. Looking
beyond 2020, while the timing and magnitude of a material economic
recovery are unclear, we believe this demand driven downturn is
temporary and demand will rebound sometime in 2021. In marine, as
discussed before, pricing typically does not improve until barge
utilization is in the mid-80% range. Nevertheless, Kirby is in a
strong financial position, and we will continue to tightly manage
our costs, maintain capital discipline, generate free cash flow,
and pay down debt.”
In inland marine, absent potential new lockdowns
related to COVID-19, Kirby expects improvement in barge utilization
going forward as refinery and chemical plants along the Gulf Coast
recover from recent hurricanes and economic activity gradually
increases. The reopening of the Illinois River in October is also
expected to contribute some sequential improvement in barge
utilization. However, until a meaningful recovery in demand occurs,
market conditions are expected to remain challenging. As well,
increased delays from seasonal winter weather are expected to have
an adverse impact on operating efficiencies. Overall, compared to
the 2020 third quarter, Kirby expects inland revenues and operating
margins will be flat to down slightly in the fourth quarter.
In coastal, the spot market is expected to
remain challenging in the near term until demand for refined
products and black oil materially improves. However, compared to
the third quarter, reduced delays associated with recent hurricanes
and tropical storms on the East and Gulf Coasts are expected to
modestly benefit the fourth quarter’s results. Overall, Kirby
expects coastal fourth quarter revenues will be flat sequentially
with operating margins in the negative low single digits.
In distribution and services, activity levels
are slowly recovering from 2020 second quarter lows. In the fourth
quarter, Kirby expects to benefit from the gradual improvement in
the economy, but a weak oil and gas market, potential customer
budget exhaustion, and some seasonality will likely result in
sequential reductions in revenue and operating income. In the oil
and gas market, activity is expected to be minimal as customers
continue to rationalize excess pressure pumping capacity resulting
in limited deliveries of new pressure pumping units. Also, many oil
and gas companies are expected to slow drilling and completions
activity in the fourth quarter, further reducing demand for parts
and service. In commercial and industrial, demand for parts and new
engines in marine and on-highway is expected to increase as
economic activity improves and customers complete projects. These
gains, however, will be partially offset by seasonal activity
reductions associated with the dry cargo harvest in marine and
reduced utilization of the power generation rental fleet following
hurricane season. Overall, compared to the 2020 third quarter,
segment revenues are expected to modestly decline in the fourth
quarter with operating margins in the negative low to mid-single
digits.
On the balance sheet, as of September 30, 2020,
Kirby had approximately $613 million of cash and liquidity
available. The Company does not have any scheduled debt maturities
until 2023. Kirby expects 2020 capital spending to be approximately
$150 million, representing a year-on-year reduction of
approximately 40%. The Company remains focused on good maintenance
of the marine transportation fleet, but capital spending needs are
limited. Overall, Kirby expects to generate net cash provided by
operating activities of $450 million to $500 million, with free
cash flow of $300 million to $350 million in 2020.
Conference Call A conference
call is scheduled for 7:30 a.m. Central Standard Time today,
Thursday, October 29, 2020, to discuss the 2020 third quarter
performance as well as the outlook for the 2020 fourth quarter. To
listen to the webcast, please visit the Investor Relations section
of Kirby’s website at https://kirbycorp.com. A slide presentation
for this conference call will be posted on Kirby’s website
approximately 15 minutes before the start of the webcast. For
listeners who wish to participate in the question and answer
session of the conference call webcast, you may access the call by
dialing (866) 691-5839 within the U.S. and Canada or +1 (409)
216-0840 internationally. The conference ID for the call is
2166834. A replay of the webcast will be available for a period of
one year by visiting the News & Events page in the Investor
Relations section of Kirby’s website.
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 includes a non-GAAP
financial measure, EBITDA, which Kirby defines as net earnings
(loss) attributable to Kirby before interest expense, taxes on
income, depreciation and amortization, impairment of long-lived
assets, and impairment of goodwill. A reconciliation of EBITDA with
GAAP net earnings (loss) attributable to Kirby is included in this
press release. This press release also includes non-GAAP financial
measures which exclude certain one-time items, including earnings
before taxes on income (excluding one-time items), net earnings
attributable to Kirby (excluding one-time items), and diluted
earnings per share (excluding one-time items). A reconciliation of
these measures with GAAP is included in this press release.
Management believes the exclusion of certain one-time items from
these financial measures enables it and investors to assess and
understand operating performance, especially when comparing those
results with previous and subsequent periods or forecasting
performance for future periods, primarily because management views
the excluded items to be outside of Kirby’s normal operating
results. This press release also includes a non-GAAP financial
measure, free cash flow, which Kirby defines as net cash provided
by operating activities less capital expenditures. A reconciliation
of free cash flow with GAAP is included in this press release.
Kirby uses free cash flow to assess and forecast cash flow and to
provide additional disclosures on the Company’s liquidity as a
result of uncertainty surrounding the impact of the COVID-19
pandemic on global and regional market conditions. Free cash flow
does not imply the amount of residual cash flow available for
discretionary expenditures as it excludes mandatory debt service
requirements and other non-discretionary expenditures. This press
release also includes marine transportation performance measures,
consisting of ton miles, revenue per ton mile, towboats operated
and delay days. Comparable marine transportation performance
measures for the 2019 year and quarters are available in the
Investor Relations section of Kirby’s website,
https://kirbycorp.com, under Financials.
Forward-Looking Statements
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, and
the impact of the COVID-19 pandemic and the related response of
governments on global and regional market conditions.
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,
2019 and in subsequent quarterly filings on Form 10-Q.
About Kirby Corporation Kirby
Corporation, based in Houston, Texas, is the nation’s largest
domestic tank barge operator transporting bulk liquid products
throughout the Mississippi River System, on the Gulf Intracoastal
Waterway, coastwise along all three United States coasts, and in
Alaska and Hawaii. Kirby transports petrochemicals, black oil,
refined petroleum products and agricultural chemicals by tank
barge. In addition, Kirby participates in the transportation of
dry-bulk commodities in United States coastwise trade. Through the
distribution and services segment, Kirby provides after-market
service and parts for engines, transmissions, reduction gears, and
related equipment used in oilfield services, marine, power
generation, on-highway, and other industrial
applications. Kirby also rents equipment including generators,
industrial compressors, railcar movers, and high capacity lift
trucks for use in a variety of industrial markets, and manufactures
and remanufactures oilfield service equipment, including pressure
pumping units, for land-based oilfield service customers.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
(unaudited,
$ in thousands, except per share amounts) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine transportation |
|
$ |
320,602 |
|
$ |
412,665 |
|
$ |
1,104,846 |
|
$ |
1,185,072 |
|
Distribution and services |
|
|
175,965 |
|
|
254,144 |
|
|
576,806 |
|
|
997,400 |
|
Total revenues |
|
|
496,567 |
|
|
666,809 |
|
|
1,681,652 |
|
|
2,182,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales and operating expenses |
|
|
340,764 |
|
|
458,514 |
|
|
1,167,871 |
|
|
1,558,664 |
|
Selling, general and administrative |
|
|
61,720 |
|
|
64,656 |
|
|
199,412 |
|
|
206,602 |
|
Taxes, other than on income |
|
|
9,077 |
|
|
10,909 |
|
|
33,548 |
|
|
31,486 |
|
Depreciation and amortization |
|
|
54,779 |
|
|
54,455 |
|
|
165,067 |
|
|
164,771 |
|
Impairments and other charges |
|
|
— |
|
|
— |
|
|
561,274 |
|
|
— |
|
(Gain) loss on disposition of assets |
|
|
316 |
|
|
374 |
|
|
13 |
|
|
(4,901 |
) |
Total costs and expenses |
|
|
466,656 |
|
|
588,908 |
|
|
2,127,185 |
|
|
1,956,622 |
|
Operating income (loss) |
|
|
29,911 |
|
|
77,901 |
|
|
(445,533 |
) |
|
225,850 |
|
Other
income |
|
|
1,172 |
|
|
864 |
|
|
6,185 |
|
|
2,677 |
|
Interest
expense |
|
|
(11,809 |
) |
|
(14,310 |
) |
|
(37,316 |
) |
|
(43,026 |
) |
Earnings (loss) before taxes on income |
|
|
19,274 |
|
|
64,455 |
|
|
(476,664 |
) |
|
185,501 |
|
(Provision)
benefit for taxes on income |
|
|
8,419 |
|
|
(16,305 |
) |
|
182,657 |
|
|
(45,454 |
) |
Net earnings (loss) |
|
|
27,693 |
|
|
48,150 |
|
|
(294,007 |
) |
|
140,047 |
|
Less: Net
earnings attributable to noncontrolling interests |
|
|
(204 |
) |
|
(163 |
) |
|
(743 |
) |
|
(477 |
) |
Net earnings (loss) attributable to Kirby |
|
$ |
27,489 |
|
$ |
47,987 |
|
$ |
(294,750 |
) |
$ |
139,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) per share attributable to Kirby common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.46 |
|
$ |
0.80 |
|
$ |
(4.92 |
) |
$ |
2.33 |
|
Diluted |
|
$ |
0.46 |
|
$ |
0.80 |
|
$ |
(4.92 |
) |
$ |
2.32 |
|
Common stock
outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
59,915 |
|
|
59,749 |
|
|
59,903 |
|
|
59,733 |
|
Diluted |
|
|
59,931 |
|
|
59,906 |
|
|
59,903 |
|
|
59,879 |
|
CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
(unaudited,
$ in thousands) |
|
EBITDA:
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to Kirby |
|
$ |
27,489 |
|
$ |
47,987 |
|
$ |
(294,750 |
) |
$ |
139,570 |
|
Interest expense |
|
|
11,809 |
|
|
14,310 |
|
|
37,316 |
|
|
43,026 |
|
Provision (benefit) for taxes on income |
|
|
(8,419 |
) |
|
16,305 |
|
|
(182,657 |
) |
|
45,454 |
|
Impairment of long-lived assets |
|
|
— |
|
|
— |
|
|
165,304 |
|
|
— |
|
Impairment of goodwill |
|
|
— |
|
|
— |
|
|
387,970 |
|
|
— |
|
Depreciation and amortization |
|
|
54,779 |
|
|
54,455 |
|
|
165,067 |
|
|
164,771 |
|
|
|
$ |
85,658 |
|
$ |
133,057 |
|
$ |
278,250 |
|
$ |
392,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
$ |
36,541 |
|
$ |
56,800 |
|
$ |
129,371 |
|
$ |
184,068 |
|
Acquisitions
of businesses and marine equipment |
|
$ |
6,525 |
|
$ |
4,700 |
|
$ |
348,772 |
|
$ |
257,540 |
|
|
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
|
|
|
|
(unaudited, $ in thousands) |
|
Cash and cash equivalents |
|
$ |
119,586 |
|
$ |
24,737 |
|
Long-term
debt, including current portion |
|
$ |
1,578,344 |
|
$ |
1,369,767 |
|
Total
equity |
|
$ |
3,078,367 |
|
$ |
3,371,592 |
|
Debt to
capitalization ratio |
|
|
33.9 |
% |
|
28.9 |
% |
MARINE TRANSPORTATION STATEMENTS OF
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
(unaudited,
$ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine
transportation revenues |
|
$ |
320,602 |
|
$ |
412,665 |
|
$ |
1,104,846 |
|
$ |
1,185,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales and operating expenses |
|
|
207,038 |
|
|
257,869 |
|
|
717,923 |
|
|
771,596 |
|
Selling, general and administrative |
|
|
26,554 |
|
|
28,424 |
|
|
85,294 |
|
|
90,896 |
|
Taxes, other than on income |
|
|
7,307 |
|
|
9,230 |
|
|
27,852 |
|
|
26,355 |
|
Depreciation and amortization |
|
|
47,312 |
|
|
44,445 |
|
|
139,295 |
|
|
134,861 |
|
Total costs and expenses |
|
|
288,211 |
|
|
339,968 |
|
|
970,364 |
|
|
1,023,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
32,391 |
|
$ |
72,697 |
|
$ |
134,482 |
|
$ |
161,364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
10.1 |
% |
|
17.6 |
% |
|
12.2 |
% |
|
13.6 |
% |
DISTRIBUTION AND SERVICES STATEMENTS OF
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
(unaudited,
$ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
and services revenues |
|
$ |
175,965 |
|
$ |
254,144 |
|
$ |
576,806 |
|
$ |
997,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales and operating expenses |
|
|
133,726 |
|
|
200,645 |
|
|
449,948 |
|
|
787,068 |
|
Selling, general and administrative |
|
|
33,098 |
|
|
33,608 |
|
|
108,295 |
|
|
108,194 |
|
Taxes, other than on income |
|
|
1,754 |
|
|
1,674 |
|
|
5,636 |
|
|
5,102 |
|
Depreciation and amortization |
|
|
6,283 |
|
|
9,085 |
|
|
22,252 |
|
|
27,167 |
|
Total costs and expenses |
|
|
174,861 |
|
|
245,012 |
|
|
586,131 |
|
|
927,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
1,104 |
|
$ |
9,132 |
|
$ |
(9,325 |
) |
$ |
69,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
0.6 |
% |
|
3.6 |
% |
|
(1.6 |
)% |
|
7.0 |
% |
OTHER COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
(unaudited,
$ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
corporate expenses |
|
$ |
3,268 |
|
$ |
3,554 |
|
$ |
9,403 |
|
$ |
10,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of long-lived assets |
|
$ |
— |
|
$ |
— |
|
$ |
165,304 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of goodwill |
|
$ |
— |
|
$ |
— |
|
$ |
387,970 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
write-downs |
|
$ |
— |
|
$ |
— |
|
$ |
8,000 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss
on disposition of assets |
|
$ |
316 |
|
$ |
374 |
|
$ |
13 |
|
$ |
(4,901 |
) |
ONE TIME CHARGES AND
BENEFITS
The 2020 first nine months GAAP results include
certain one-time charges. The following is a reconciliation of GAAP
earnings to non-GAAP earnings, excluding the one-time items for
earnings before tax (pre-tax), net earnings attributable to Kirby
(after-tax), and diluted earnings per share (per share):
|
|
|
First Nine Months 2020 |
|
|
|
|
Pre-Tax |
|
After-Tax |
|
Per Share |
|
|
|
|
(unaudited,
$ in millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
GAAP loss |
|
$ |
(476.7 |
) |
$ |
(294.8 |
) |
$ |
(4.92 |
) |
Impairments
and other charges |
|
|
561.3 |
|
433.3 |
|
7.24 |
|
Income tax
benefit on 2018 and 2019 net operating loss carrybacks |
|
|
— |
|
(50.8 |
) |
(0.85 |
) |
Earnings,
excluding one-time items(2) |
|
$ |
84.6 |
$ |
87.7 |
$ |
1.47 |
|
RECONCILIATION OF FREE CASH
FLOW
The following is a reconciliation of GAAP net
cash provided by operating activities to non-GAAP free cash
flow(2):
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019(3) |
|
2020 |
|
2019(3) |
|
|
|
(unaudited,
$ in millions) |
|
Net cash provided by operating activities |
|
$ |
117.7 |
|
$ |
199.4 |
|
$ |
359.8 |
|
$ |
387.6 |
|
Less:
Capital expenditures |
|
|
(36.6 |
) |
|
(56.8 |
) |
|
(129.4 |
) |
|
(184.1 |
) |
Free cash
flow(2) |
|
$ |
81.1 |
|
$ |
142.6 |
|
$ |
230.4 |
|
$ |
203.5 |
|
|
|
FY 2020 Projection |
|
|
FY 2019(3) |
|
|
|
Low |
|
High |
|
|
Actual |
|
|
|
(unaudited,
$ in millions) |
|
|
|
|
Net cash provided by operating activities |
|
$ |
450.0 |
|
$ |
500.0 |
|
$ |
511.8 |
|
Less:
Capital expenditures |
|
|
(150.0 |
) |
|
(150.0 |
) |
|
(248.2 |
) |
Free cash
flow(2) |
|
$ |
300.0 |
|
$ |
350.0 |
|
$ |
263.6 |
|
MARINE TRANSPORTATION PERFORMANCE
MEASUREMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Inland
Performance Measurements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ton Miles (in millions) (4) |
|
|
2,794 |
|
|
3,958 |
|
|
10,101 |
|
|
10,811 |
|
Revenue/Ton Mile (cents/tm) (5) |
|
|
8.9 |
|
|
8.0 |
|
|
8.6 |
|
|
8.4 |
|
Towboats operated (average) (6) |
|
|
265 |
|
|
304 |
|
|
300 |
|
|
299 |
|
Delay Days (7) |
|
|
1,335 |
|
|
2,284 |
|
|
8,640 |
|
|
10,228 |
|
Average cost per gallon of fuel consumed |
|
$ |
1.27 |
|
$ |
2.00 |
|
$ |
1.47 |
|
$ |
2.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barges (active): |
|
|
|
|
|
|
|
Inland tank barges |
|
|
1,084 |
|
|
1,065 |
|
Coastal tank barges |
|
|
47 |
|
|
49 |
|
Offshore dry-cargo barges |
|
|
4 |
|
|
4 |
|
Barrel capacities (in millions): |
|
|
|
|
|
|
|
Inland tank barges |
|
|
24.5 |
|
|
23.7 |
|
Coastal tank barges |
|
|
4.3 |
|
|
4.7 |
|
(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, impairment of long-lived
assets, and impairment of goodwill. 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) Kirby uses certain non-GAAP
financial measures to review performance excluding certain one-time
items including: earnings before taxes on income, excluding
one-time items; net earnings attributable to Kirby, excluding
one-time items; and diluted earnings per share, excluding one-time
items. Management believes that the exclusion of certain one-time
items from these financial measures enables it and investors to
assess and understand operating performance, especially when
comparing those results with previous and subsequent periods or
forecasting performance for future periods, primarily because
management views the excluded items to be outside of the company’s
normal operating results. Kirby also uses free cash flow, which is
defined as net cash provided by operating activities less capital
expenditures, to assess and forecast cash flow and to provide
additional disclosures on the Company’s liquidity as a result of
uncertainty surrounding the impact of the COVID-19 pandemic on
global and regional market conditions. Free cash flow does not
imply the amount of residual cash flow available for discretionary
expenditures as it excludes mandatory debt service requirements and
other non-discretionary expenditures. These non-GAAP financial
measures are not calculations 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) See Kirby’s 2019 10-K and 2019
third quarter 10-Q for amounts provided by (used in) investing and
financing activities.
(4) 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.
(5) Inland marine transportation
revenues divided by ton miles. Example: Third quarter 2020 inland
marine transportation revenues of $247,647,000 divided by
2,794,000,000 inland marine transportation ton miles = 8.9
cents.
(6) Towboats operated are the
average number of owned and chartered towboats operated during the
period.
(7) 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.
Contact:
Eric Holcomb
713-435-1545
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