Kirby Corporation (“Kirby”) (NYSE: KEX) today announced net
earnings attributable to Kirby for the third quarter ended
September 30, 2022 of $39.1 million or $0.65 per share, compared
with a net loss of $(264.7) million, or $(4.41) per share for the
2021 third quarter. Excluding one-time items related to coastal
marine in the 2021 third quarter, adjusted net earnings
attributable to Kirby were $10.3 million or $0.17 per share.
Consolidated revenues for the 2022 third quarter were $745.8
million compared with $598.9 million reported for the 2021 third
quarter.
David Grzebinski, Kirby’s President and Chief
Executive Officer, commented, “I am pleased with Kirby’s third
quarter results and the improvement in both of our segments. During
the third quarter, our inland marine transportation business
delivered strong results with significant sequential and
year-over-year improvement in profitability. Tight market
conditions in inland led to sequential increases in spot market
rates in the high single digits, and term contract pricing that
continued to push higher. Overall, higher demand and pricing
improvements helped to improve inland operating margins into the
low double digits during the quarter.
“Coastal marine transportation also delivered
improved financial performance with steady gains in revenue and
operating income. Market conditions were favorable in the quarter,
with our barge utilization in the low to mid-90% range and modest
increases in spot prices. These factors coupled with continued cost
discipline resulted in further improvement in operating income for
our coastal business during the third quarter.
“In our distribution and services segment,
lingering supply chain constraints continued to impact our ability
to deliver new equipment during the third quarter. Despite these
headwinds, we were able to show both sequential and year-over-year
improvements in revenues and operating income. Strong demand and
pricing improvements contributed to increased profitability with
operating margins improving to the high single digits,” Mr.
Grzebinski concluded.
Segment Results – Marine
Transportation
Marine transportation revenues for the 2022
third quarter were $433.0 million compared with $338.5 million for
the 2021 third quarter. Operating income for the 2022 third quarter
was $41.7 million compared with $16.9 million for the 2021 third
quarter. Segment operating margin for the 2022 third quarter was
9.6% compared with 5.0% for the 2021 third quarter.
In the inland market, average 2022 third quarter
barge utilization was in the low 90% range compared to the low 80%
range in the 2021 third quarter. Operating conditions were
favorable with fewer weather and lock delays contributing to a 16%
decrease in delay days versus the year-ago period. During the
quarter, average spot market rates increased in the high single
digits sequentially and in the mid 20% range compared to the 2021
third quarter. Term contracts that renewed in the third quarter
increased in the low-teens range on average compared to the
year-ago period. Revenues in the inland market increased 35%
compared to the 2021 third quarter primarily due to increased
volumes, barge utilization, pricing, and fuel rebills. Inland’s
operating margin improved into the low double digits despite
ongoing headwinds from high fuel costs and inflationary pressures.
The inland market represented 80% of segment revenues in the third
quarter of 2022.
In coastal, market conditions continued to
improve modestly during the quarter, with Kirby’s barge utilization
in the low to mid-90% range. Pricing in the spot market increased
in the high-single digits sequentially and term contract renewals
increased in the 20% range year-over-year. Revenues in the coastal
market were 6% higher compared to the 2021 third quarter and
represented 20% of segment revenues. The coastal business continued
to show improvement in operating margins with margins in the
low-to-mid single digits during the quarter.
Segment Results –
Distribution and Services
Distribution and services revenues for the 2022
third quarter were $312.8 million compared with $260.4 million for
the 2021 third quarter. Operating income for the 2022 third quarter
was $22.3 million compared with $11.0 million for the 2021 third
quarter. Operating margin was 7.1% for the 2022 third quarter
compared with 4.2% for the 2021 third quarter.
In the commercial and industrial market,
revenues and operating income increased compared to the 2021 third
quarter, primarily due to strong economic activity across the U.S.
that resulted in higher business levels in marine repair, power
generation, and on-highway. Overall, commercial and industrial
revenues increased 8% compared to the 2021 third quarter and
represented approximately 53% of segment revenues. Commercial and
industrial operating margins were in the high-single digits.
In the oil and gas market, revenues and
operating income improved compared to the 2021 third quarter driven
by higher oilfield activity which resulted in increased demand for
new transmissions and parts in the distribution business. The
business continued to experience increased year-over-year demand
with incremental orders and deliveries of our new environmentally
friendly pressure pumping equipment and power generation equipment
for electric fracturing despite on-going supply chain disruptions.
Overall, oil and gas revenues increased 37% compared to the 2021
third quarter and represented approximately 47% of segment
revenues. Oil and gas operating margins were in the mid-single
digits.
Cash Generation
For the 2022 third quarter, EBITDA was $113.0
million compared with Adjusted EBITDA of $79.5 million for the 2021
third quarter. During the quarter, net cash provided by operating
activities was $65.6 million, and capital expenditures were $41.2
million. During the quarter, the Company had net proceeds from
asset sales totaling $9.6 million. Kirby also used $4.8 million to
repurchase 76,044 shares at an average price of $63.33. As of
September 30, 2022, the Company had $37.0 million of cash and cash
equivalents on the balance sheet and $520.5 million of liquidity
available. Total debt was $1,118.5 million, reflecting a $44.9
million reduction compared to December 31, 2021, and the
debt-to-capitalization ratio improved to 27.3%.
2022 Fourth Quarter Outlook
Commenting on the 2022 fourth quarter outlook,
Mr. Grzebinski said, “We had a good quarter with both businesses
performing well. Refinery activity remains at high levels, our
barge utilization is strong in both inland and coastal, and rates
are steadily increasing. While we expect some near-term headwinds
related to record low water conditions on the Mississippi River,
increasing delay days due to normal seasonal weather conditions,
and high levels of shipyard activity in coastal, our outlook in the
marine market remains strong. In distribution and services, despite
ongoing supply chain constraints and delays, demand for our
products and services is growing, and we continue to receive new
orders in manufacturing. Overall, we expect these favorable
conditions to continue, and barring supply chain bottlenecks
worsening, expect our businesses to deliver improved financial
results in the coming quarters.
Mr. Grzebinski concluded, “Labor constraints and
inflationary pressures continue to contribute to rising costs
across our businesses, and we are mindful of economic headwinds
related to the impact of higher interest rates and a potential
recession as we move in to 2023. With these factors in mind, we
continue to focus on managing costs and driving cash flow from
operations. In the near-term, we intend to use free cash flow to
reduce debt and to opportunistically return capital to
shareholders. Consistent with our balanced approach to capital
allocation, we will continue to prudently evaluate accretive
acquisitions and high-return organic growth opportunities to drive
value for our shareholders.”
In inland marine, favorable conditions are
expected to continue going forward, driven by high refinery and
petrochemical plant utilization, increased volumes from new
petrochemical plants, and minimal new barge construction across the
industry. Kirby expects these strengths to be offset by increasing
delay days due to normal seasonal weather conditions and record low
water conditions on the Mississippi River. The Company still
expects further improvements in the spot market, which currently
represents approximately 40% of inland revenues. Term contracts are
also expected to continue to reset higher for the duration of the
year and into 2023. Overall, 2022 inland revenues are expected to
grow by 20% to 25% on a full year basis as market conditions remain
tight and term contracts renew higher. Inflationary cost pressures,
including increasing fuel prices, are expected to remain headwinds
but will be mitigated when escalations in contracts occur during
the fourth quarter and into 2023. Barring further cost inflation,
rising fuel costs and further disruption from low water, the
Company expects near term operating margins to be in the low to
mid-teens as we move into 2023.
In coastal marine, Kirby expects modestly
improved customer demand in the fourth quarter with barge
utilization remaining in the low to mid-90% range. Rates are
expected to continue to slowly improve, but meaningful gains will
remain challenged until underutilized barge capacity across the
industry is more fully absorbed. For the full year, with the impact
of the Company’s exit from the Hawaiian market, coastal revenues
are expected to be flat to up in the low single digits compared to
2021. Revenues and operating margins are expected to be impacted by
ongoing planned shipyard maintenance and ballast water treatment
installations on certain vessels, with offsets from higher coal
shipments. Coastal operating margins for the remainder of the year
are expected to remain in the low to mid-single digits.
In distribution and services, favorable oilfield
fundamentals and strong demand in commercial and industrial are
expected to continue in the fourth quarter of 2022. In the oil and
gas market, high commodity prices, increasing rig counts, and
growing well completions activity are expected to drive strong
demand for OEM products, parts, and services in the distribution
business. In manufacturing, the Company expects demand for new
environmentally friendly pressure pumping and e-frac power
generation equipment to remain strong, with a growing backlog of
new orders and increased deliveries of new equipment into 2023.
However, persistent supply chain issues and long lead times are
expected to continue in the near-term, contributing to some
volatility as deliveries of new products possibly shift into future
quarters. In commercial and industrial, strong markets are expected
to yield full year revenue growth in the low double-digit
percentage range, with increased activity in power generation,
marine repair, and on-highway offset slightly by normal seasonal
slowness in Thermo King. Overall, the Company expects segment
revenues to grow 25% to 30% on a full year basis with operating
margins in the mid to high-single digits.
Kirby expects 2022 capital spending of between
$170 to $190 million. Approximately $5 million is associated with
the construction of new inland towboats, and approximately $145 to
$155 million is associated with marine maintenance capital and
improvements to existing inland and coastal marine equipment and
facility improvements. The balance of approximately $20 to $30
million largely relates to new machinery and equipment and facility
improvements in distribution and services, as well as information
technology projects in corporate. Overall, Kirby expects to
generate net cash provided by operating activities of $390 million
to $450 million, with free cash flow of $200 million to $280
million in 2022.
Conference Call
A conference call is scheduled for 7:30 a.m.
Central Daylight Time today, Monday, October 24, 2022, to discuss
the 2022 third quarter performance as well as the outlook for the
remainder of 2022. To listen to the webcast, please visit the
Investor Relations section of Kirby’s website at www.kirbycorp.com.
For listeners who wish to participate in the question and answer
session via telephone, please pre-register at Kirby Earnings Call
Registration. All registrants will receive dial-in information and
a PIN allowing them to access the live call. A slide presentation
for this conference call will be posted on Kirby’s website
approximately 15 minutes before the start of the webcast. 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, Adjusted EBITDA, which Kirby defines as net
earnings attributable to Kirby before interest expense, taxes on
income, depreciation and amortization, impairment of long-lived
assets, and impairment of goodwill. A reconciliation of Adjusted
EBITDA with GAAP net earnings 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 2021 year and
quarters are available in the Investor Relations section of Kirby’s
website, www.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 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,
2021.
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, and coastwise along all three United States coasts. 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 genuine
replacement parts for engines, transmissions, reduction gears,
electric motors, drives, and controls, specialized electrical
distribution and control systems, energy storage battery systems,
and related equipment used in oilfield services, marine, power
generation, on-highway, and other industrial applications. Kirby
also rents equipment including generators, industrial compressors,
high capacity lift trucks, and refrigeration trailers for use in a
variety of industrial markets. For the oil and gas market, Kirby
manufactures and remanufactures oilfield service equipment,
including pressure pumping units, and manufactures electric power
generation equipment, specialized electrical distribution and
control equipment, and high capacity energy storage/battery systems
for oilfield customers.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
(unaudited,
$ in thousands, except per share amounts) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Marine transportation |
|
$ |
433,040 |
|
|
$ |
338,514 |
|
|
$ |
1,194,231 |
|
|
$ |
972,352 |
|
Distribution and services |
|
|
312,803 |
|
|
|
260,406 |
|
|
|
860,358 |
|
|
|
683,042 |
|
Total revenues |
|
|
745,843 |
|
|
|
598,920 |
|
|
|
2,054,589 |
|
|
|
1,655,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales and operating expenses |
|
|
552,392 |
|
|
|
446,519 |
|
|
|
1,526,872 |
|
|
|
1,219,038 |
|
Selling, general and administrative |
|
|
75,381 |
|
|
|
66,065 |
|
|
|
221,721 |
|
|
|
198,434 |
|
Taxes, other than on income |
|
|
9,121 |
|
|
|
9,917 |
|
|
|
28,332 |
|
|
|
28,541 |
|
Depreciation and amortization |
|
|
50,419 |
|
|
|
53,462 |
|
|
|
150,498 |
|
|
|
163,484 |
|
Impairments and other charges |
|
|
— |
|
|
|
340,713 |
|
|
|
— |
|
|
|
340,713 |
|
Gain on disposition of assets |
|
|
(377 |
) |
|
|
(830 |
) |
|
|
(7,971 |
) |
|
|
(5,082 |
) |
Total costs and expenses |
|
|
686,936 |
|
|
|
915,846 |
|
|
|
1,919,452 |
|
|
|
1,945,128 |
|
Operating income (loss) |
|
|
58,907 |
|
|
|
(316,926 |
) |
|
|
135,137 |
|
|
|
(289,734 |
) |
Other
income |
|
|
3,805 |
|
|
|
1,832 |
|
|
|
11,853 |
|
|
|
8,146 |
|
Interest
expense |
|
|
(11,755 |
) |
|
|
(10,500 |
) |
|
|
(32,598 |
) |
|
|
(32,172 |
) |
Earnings (loss) before taxes on income |
|
|
50,957 |
|
|
|
(325,594 |
) |
|
|
114,392 |
|
|
|
(313,760 |
) |
(Provision)
benefit for taxes on income |
|
|
(11,713 |
) |
|
|
60,442 |
|
|
|
(28,956 |
) |
|
|
55,840 |
|
Net earnings (loss) |
|
|
39,244 |
|
|
|
(265,152 |
) |
|
|
85,436 |
|
|
|
(257,920 |
) |
Net
(earnings) loss attributable to noncontrolling interests |
|
|
(153 |
) |
|
|
422 |
|
|
|
(454 |
) |
|
|
5 |
|
Net earnings (loss) attributable to Kirby |
|
$ |
39,091 |
|
|
$ |
(264,730 |
) |
|
$ |
84,982 |
|
|
$ |
(257,915 |
) |
Net earnings
(loss) per share attributable to Kirby common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.65 |
|
|
$ |
(4.41 |
) |
|
$ |
1.41 |
|
|
$ |
(4.30 |
) |
Diluted |
|
$ |
0.65 |
|
|
$ |
(4.41 |
) |
|
$ |
1.41 |
|
|
$ |
(4.30 |
) |
Common stock
outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
59,896 |
|
|
|
60,062 |
|
|
|
60,088 |
|
|
|
60,044 |
|
Diluted |
|
|
60,182 |
|
|
|
60,062 |
|
|
|
60,369 |
|
|
|
60,044 |
|
CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
(unaudited,
$ in thousands) |
|
Adjusted
EBITDA:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to Kirby |
|
$ |
39,091 |
|
|
$ |
(264,730 |
) |
|
$ |
84,982 |
|
|
$ |
(257,915 |
) |
Interest expense |
|
|
11,755 |
|
|
|
10,500 |
|
|
|
32,598 |
|
|
|
32,172 |
|
Provision (benefit) for taxes on income |
|
|
11,713 |
|
|
|
(60,442 |
) |
|
|
28,956 |
|
|
|
(55,840 |
) |
Impairment of long-lived assets |
|
|
— |
|
|
|
121,661 |
|
|
|
— |
|
|
|
121,661 |
|
Impairment of goodwill |
|
|
— |
|
|
|
219,052 |
|
|
|
— |
|
|
|
219,052 |
|
Depreciation and amortization |
|
|
50,419 |
|
|
|
53,462 |
|
|
|
150,498 |
|
|
|
163,484 |
|
|
|
$ |
112,978 |
|
|
$ |
79,503 |
|
|
$ |
297,034 |
|
|
$ |
222,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
$ |
41,204 |
|
|
$ |
33,599 |
|
|
$ |
120,263 |
|
|
$ |
71,968 |
|
Acquisitions
of businesses and marine equipment |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,900 |
|
|
$ |
7,470 |
|
|
|
September 30,2022 |
|
|
December 31,2021 |
|
|
|
|
|
|
|
(unaudited,
$ in thousands) |
|
Cash and cash equivalents |
|
$ |
36,991 |
|
|
$ |
34,813 |
|
Long-term
debt, including current portion |
|
$ |
1,118,459 |
|
|
$ |
1,163,367 |
|
Total
equity |
|
$ |
2,975,363 |
|
|
$ |
2,888,782 |
|
Debt to
capitalization ratio |
|
|
27.3 |
% |
|
|
28.7 |
% |
MARINE TRANSPORTATION STATEMENTS OF
EARNINGS
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
(unaudited,
$ in thousands) |
|
Marine transportation revenues |
|
$ |
433,040 |
|
|
$ |
338,514 |
|
|
$ |
1,194,231 |
|
|
$ |
972,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales and operating expenses |
|
|
306,817 |
|
|
|
237,233 |
|
|
|
855,519 |
|
|
|
681,317 |
|
Selling, general and administrative |
|
|
32,794 |
|
|
|
29,464 |
|
|
|
93,424 |
|
|
|
88,314 |
|
Taxes, other than on income |
|
|
7,346 |
|
|
|
8,422 |
|
|
|
23,156 |
|
|
|
23,828 |
|
Depreciation and amortization |
|
|
44,370 |
|
|
|
46,480 |
|
|
|
132,667 |
|
|
|
141,560 |
|
Total costs and expenses |
|
|
391,327 |
|
|
|
321,599 |
|
|
|
1,104,766 |
|
|
|
935,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
$ |
41,713 |
|
|
$ |
16,915 |
|
|
$ |
89,465 |
|
|
$ |
37,333 |
|
Operating
margin |
|
|
9.6 |
% |
|
|
5.0 |
% |
|
|
7.5 |
% |
|
|
3.8 |
% |
DISTRIBUTION AND SERVICES STATEMENTS OF
EARNINGS
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(unaudited,
$ in thousands) |
|
Distribution and services revenues |
|
$ |
312,803 |
|
|
$ |
260,406 |
|
|
$ |
860,358 |
|
|
$ |
683,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales and operating expenses |
|
|
245,223 |
|
|
|
207,877 |
|
|
|
670,938 |
|
|
|
537,100 |
|
Selling, general and administrative |
|
|
39,289 |
|
|
|
35,002 |
|
|
|
121,864 |
|
|
|
104,477 |
|
Taxes, other than on income |
|
|
1,749 |
|
|
|
1,470 |
|
|
|
5,067 |
|
|
|
4,620 |
|
Depreciation and amortization |
|
|
4,274 |
|
|
|
5,018 |
|
|
|
12,513 |
|
|
|
16,739 |
|
Total costs and expenses |
|
|
290,535 |
|
|
|
249,367 |
|
|
|
810,382 |
|
|
|
662,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
$ |
22,268 |
|
|
$ |
11,039 |
|
|
$ |
49,976 |
|
|
$ |
20,106 |
|
Operating
margin |
|
|
7.1 |
% |
|
|
4.2 |
% |
|
|
5.8 |
% |
|
|
2.9 |
% |
OTHER COSTS AND EXPENSES
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(unaudited,
$ in thousands) |
|
General corporate expenses |
|
$ |
5,451 |
|
|
$ |
4,997 |
|
|
$ |
12,275 |
|
|
$ |
11,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of long-lived assets |
|
$ |
— |
|
|
$ |
121,661 |
|
|
$ |
— |
|
|
$ |
121,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of goodwill |
|
$ |
— |
|
|
$ |
219,052 |
|
|
$ |
— |
|
|
$ |
219,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
disposition of assets |
|
$ |
(377 |
) |
|
$ |
(830 |
) |
|
$ |
(7,971 |
) |
|
$ |
(5,082 |
) |
ONE-TIME CHARGES
The 2022 first nine months and 2021 third quarter
and 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):
|
|
Third Quarter 2022 |
|
|
First Nine Months 2022 |
|
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Per Share |
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Per Share |
|
|
|
|
|
|
|
(unaudited,
$ in millions except per share amounts) |
|
GAAP earnings |
|
$ |
51.0 |
|
|
$ |
39.1 |
|
|
$ |
0.65 |
|
|
$ |
114.4 |
|
|
$ |
85.0 |
|
|
$ |
1.41 |
|
Severance
expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.5 |
|
|
|
1.3 |
|
|
|
0.02 |
|
Earnings,
excluding one-time items(2) |
|
$ |
51.0 |
|
|
$ |
39.1 |
|
|
$ |
0.65 |
|
|
$ |
115.9 |
|
|
$ |
86.3 |
|
|
$ |
1.43 |
|
|
|
Third Quarter 2021 |
|
|
First Nine Months 2021 |
|
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Per Share |
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Per Share |
|
|
|
|
|
|
|
(unaudited,
$ in millions except per share amounts) |
|
GAAP loss |
|
$ |
(325.6 |
) |
|
$ |
(264.7 |
) |
|
$ |
(4.41 |
) |
|
$ |
(313.8 |
) |
|
$ |
(257.9 |
) |
|
$ |
(4.30 |
) |
Impairments
and other charges |
|
|
340.7 |
|
|
|
275.0 |
|
|
|
4.58 |
|
|
|
340.7 |
|
|
|
275.0 |
|
|
|
4.58 |
|
Earnings,
excluding one-time items(2) |
|
$ |
15.1 |
|
|
$ |
10.3 |
|
|
$ |
0.17 |
|
|
$ |
26.9 |
|
|
$ |
17.1 |
|
|
$ |
0.28 |
|
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 |
|
|
|
2022 |
|
|
2021(3) |
|
|
2022 |
|
|
2021(3) |
|
|
|
|
|
|
|
(unaudited,
$ in millions) |
|
Net cash provided by operating activities |
|
$ |
65.6 |
|
|
$ |
82.6 |
|
|
$ |
161.2 |
|
|
$ |
280.4 |
|
Less:
Capital expenditures |
|
|
(41.2 |
) |
|
|
(33.6 |
) |
|
|
(120.3 |
) |
|
|
(72.0 |
) |
Free cash
flow(2) |
|
$ |
24.4 |
|
|
$ |
49.0 |
|
|
$ |
40.9 |
|
|
$ |
208.4 |
|
|
|
FY 2022 Projection |
|
|
FY 2021(3) |
|
|
|
Low |
|
|
High |
|
|
Actual |
|
|
|
|
|
|
|
|
|
|
(unaudited,
$ in millions) |
|
|
|
|
Net cash provided by operating activities |
|
$ |
390.0 |
|
|
$ |
450.0 |
|
|
$ |
321.6 |
|
Less:
Capital expenditures |
|
|
(190.0 |
) |
|
|
(170.0 |
) |
|
|
(98.0 |
) |
Free cash
flow(2) |
|
$ |
200.0 |
|
|
$ |
280.0 |
|
|
$ |
223.6 |
|
MARINE TRANSPORTATION PERFORMANCE
MEASUREMENTS
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Inland
Performance Measurements: |
|
|
|
|
|
|
|
|
|
|
|
|
Ton Miles (in millions)(4) |
|
|
3,706 |
|
|
|
3,393 |
|
|
|
10,410 |
|
|
|
9,852 |
|
Revenue/Ton Mile (cents/tm)(5) |
|
|
9.3 |
|
|
|
7.5 |
|
|
|
9.0 |
|
|
|
7.4 |
|
Towboats operated (average)(6) |
|
|
274 |
|
|
|
243 |
|
|
|
269 |
|
|
|
248 |
|
Delay Days(7) |
|
|
1,253 |
|
|
|
1,499 |
|
|
|
7,152 |
|
|
|
7,275 |
|
Average cost per gallon of fuel consumed |
|
$ |
4.24 |
|
|
$ |
2.24 |
|
|
$ |
3.60 |
|
|
$ |
1.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barges
(active): |
|
|
|
|
|
|
|
|
|
|
|
|
Inland tank barges |
|
|
|
|
|
|
|
|
1,035 |
|
|
|
1,036 |
|
Coastal tank barges |
|
|
|
|
|
|
|
|
29 |
|
|
|
35 |
|
Offshore dry-cargo barges |
|
|
|
|
|
|
|
|
4 |
|
|
|
4 |
|
Barrel
capacities (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
Inland tank barges |
|
|
|
|
|
|
|
|
23.0 |
|
|
|
23.2 |
|
Coastal tank barges |
|
|
|
|
|
|
|
|
3.0 |
|
|
|
3.4 |
|
(1) Kirby has historically evaluated its operating performance
using numerous measures, one of which is Adjusted EBITDA, a
non-GAAP financial measure. Kirby defines Adjusted 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. Adjusted EBITDA is presented
because of its wide acceptance as a financial indicator. Adjusted
EBITDA is one of the performance measures used in Kirby’s incentive
bonus plan. Adjusted 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. Adjusted 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
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 2021 10-K 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 2022 inland
marine transportation revenues of $345.1 million divided by 3,706
million inland marine transportation ton miles = 9.3 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: |
Kurt
Niemietz |
|
713-435-1077 |
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