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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2022

or

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

 

Commission File Number: 1-7615

 

KIRBY CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Nevada

 

74-1884980

(I.R.S. Employer Identification No.)

(State or other jurisdiction of incorporation or organization)

 

 

55 Waugh Drive, Suite 1000

Houston, TX

 

77007

(Address of principal executive offices)

 

(Zip Code)

 

713-435-1000

(Registrant’s telephone number, including area code)

 

No Change

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

KEX

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 

As of May 6, 2022, 60.3 million shares of the Registrant’s $0.10 par value per share common stock were outstanding.

 

 

 


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED BALANCE SHEETS

(Unaudited)

 

 

March 31,
2022

 

 

December 31,
2021

 

 

 

($ in thousands)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

32,398

 

 

$

34,813

 

Accounts receivable:

 

 

 

 

 

 

Trade – less allowance for doubtful accounts

 

 

420,823

 

 

 

417,958

 

Other

 

 

125,757

 

 

 

149,964

 

Inventories – net

 

 

360,457

 

 

 

331,350

 

Prepaid expenses and other current assets

 

 

75,896

 

 

 

69,780

 

Total current assets

 

 

1,015,331

 

 

 

1,003,865

 

 

 

 

 

 

 

 

Property and equipment

 

 

5,391,988

 

 

 

5,392,851

 

Accumulated depreciation

 

 

(1,731,674

)

 

 

(1,714,336

)

Property and equipment – net

 

 

3,660,314

 

 

 

3,678,515

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

164,986

 

 

 

167,730

 

Goodwill

 

 

438,748

 

 

 

438,748

 

Other intangibles, net

 

 

57,934

 

 

 

60,070

 

Other assets

 

 

45,479

 

 

 

50,135

 

Total assets

 

$

5,382,792

 

 

$

5,399,063

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Bank notes payable

 

$

3,097

 

 

$

1,934

 

Income taxes payable

 

 

93

 

 

 

 

Accounts payable

 

 

218,907

 

 

 

199,088

 

Accrued liabilities

 

 

188,302

 

 

 

236,078

 

Current portion of operating lease liabilities

 

 

34,454

 

 

 

33,902

 

Deferred revenues

 

 

68,982

 

 

 

72,770

 

Total current liabilities

 

 

513,835

 

 

 

543,772

 

 

 

 

 

 

 

 

Long-term debt, net – less current portion

 

 

1,151,638

 

 

 

1,161,433

 

Deferred income taxes

 

 

580,014

 

 

 

574,152

 

Operating lease liabilities – less current portion

 

 

156,271

 

 

 

159,672

 

Other long-term liabilities

 

 

69,169

 

 

 

71,252

 

Total long-term liabilities

 

 

1,957,092

 

 

 

1,966,509

 

 

 

 

 

 

 

 

Contingencies and commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Kirby stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.10 par value per share. Authorized 120 million shares, issued 65.5 million shares

 

 

6,547

 

 

 

6,547

 

Additional paid-in capital

 

 

853,610

 

 

 

854,512

 

Accumulated other comprehensive income – net

 

 

(25,477

)

 

 

(25,966

)

Retained earnings

 

 

2,363,873

 

 

 

2,346,439

 

Treasury stock – at cost, 5.2 million shares at March 31, 2022 and 5.4 million at December 31, 2021

 

 

(289,098

)

 

 

(295,208

)

Total Kirby stockholders’ equity

 

 

2,909,455

 

 

 

2,886,324

 

Noncontrolling interests

 

 

2,410

 

 

 

2,458

 

Total equity

 

 

2,911,865

 

 

 

2,888,782

 

Total liabilities and equity

 

$

5,382,792

 

 

$

5,399,063

 

 

See accompanying notes to condensed financial statements.

 

2


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF EARNINGS

(Unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

($ in thousands, except per share amounts)

 

Revenues:

 

 

 

 

 

 

Marine transportation

 

$

355,536

 

 

$

300,951

 

Distribution and services

 

 

255,246

 

 

 

195,899

 

Total revenues

 

 

610,782

 

 

 

496,850

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

Costs of sales and operating expenses

 

 

450,618

 

 

 

363,040

 

Selling, general and administrative

 

 

75,765

 

 

 

69,629

 

Taxes, other than on income

 

 

9,590

 

 

 

8,260

 

Depreciation and amortization

 

 

49,964

 

 

 

54,890

 

Gain on disposition of assets

 

 

(4,849

)

 

 

(2,133

)

Total costs and expenses

 

 

581,088

 

 

 

493,686

 

 

 

 

 

 

 

 

Operating income

 

 

29,694

 

 

 

3,164

 

Other income

 

 

4,308

 

 

 

3,791

 

Interest expense

 

 

(10,203

)

 

 

(10,966

)

 

 

 

 

 

 

 

Earnings (loss) before taxes on income

 

 

23,799

 

 

 

(4,011

)

(Provision) benefit for taxes on income

 

 

(6,213

)

 

 

891

 

 

 

 

 

 

 

 

Net earnings (loss)

 

 

17,586

 

 

 

(3,120

)

Net earnings attributable to noncontrolling interests

 

 

(152

)

 

 

(255

)

 

 

 

 

 

 

 

Net earnings (loss) attributable to Kirby

 

$

17,434

 

 

$

(3,375

)

 

 

 

 

 

 

 

Net earnings (loss) per share attributable to Kirby common stockholders:

 

 

 

 

 

 

Basic

 

$

0.29

 

 

$

(0.06

)

Diluted

 

$

0.29

 

 

$

(0.06

)

 

See accompanying notes to condensed financial statements.

 

3


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

2022

 

 

2021

 

 

 

 

 

 

($ in thousands)

 

Net earnings (loss)

 

$

17,586

 

 

$

(3,120

)

 

 

 

 

 

 

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

Pension and postretirement benefits

 

 

13

 

 

 

745

 

Foreign currency translation adjustments

 

 

476

 

 

 

(497

)

Total other comprehensive income (loss), net of taxes

 

 

489

 

 

 

248

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss), net of taxes

 

 

18,075

 

 

 

(2,872

)

Net earnings attributable to noncontrolling interests

 

 

(152

)

 

 

(255

)

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to Kirby

 

$

17,923

 

 

$

(3,127

)

 

See accompanying notes to condensed financial statements.

 

4


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

 

($ in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings (loss)

 

$

17,586

 

 

$

(3,120

)

Adjustments to reconcile net earnings (loss) to net cash provided by operations:

 

 

 

 

 

 

Depreciation and amortization

 

 

49,964

 

 

 

54,890

 

Provision (benefit) for deferred income taxes

 

 

5,856

 

 

 

(533

)

Amortization of share-based compensation

 

 

5,965

 

 

 

5,722

 

Amortization of major maintenance costs

 

 

7,113

 

 

 

8,360

 

Other

 

 

(3,480

)

 

 

(1,138

)

Increase (decrease) in cash flows resulting from changes in operating assets and liabilities, net

 

 

(50,782

)

 

 

38,377

 

Net cash provided by operating activities

 

 

32,222

 

 

 

102,558

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(35,075

)

 

 

(14,052

)

Acquisitions of businesses

 

 

(3,900

)

 

 

 

Proceeds from disposition of assets

 

 

14,280

 

 

 

4,754

 

Net cash used in investing activities

 

 

(24,695

)

 

 

(9,298

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings (payments) on bank credit facilities, net

 

 

1,163

 

 

 

(119,606

)

Payments on long-term debt

 

 

(10,000

)

 

 

 

Proceeds from exercise of stock options

 

 

2,336

 

 

 

411

 

Payments related to tax withholding for share-based compensation

 

 

(3,093

)

 

 

(2,045

)

Return of investment to noncontrolling interest and other

 

 

(348

)

 

 

(25

)

Net cash used in financing activities

 

 

(9,942

)

 

 

(121,265

)

Decrease in cash and cash equivalents

 

 

(2,415

)

 

 

(28,005

)

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

 

34,813

 

 

 

80,338

 

Cash and cash equivalents, end of period

 

$

32,398

 

 

$

52,333

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid (received) during the period:

 

 

 

 

 

 

Interest paid

 

$

18,022

 

 

$

18,732

 

Income taxes refunded, net

 

$

(24

)

 

$

(117,659

)

Operating cash outflow from operating leases

 

$

11,040

 

 

$

10,688

 

Non-cash investing activity:

 

 

 

 

 

 

Capital expenditures included in accounts payable

 

$

(487

)

 

$

(7,207

)

Right-of-use assets obtained in exchange for lease obligations

 

$

6,464

 

 

$

6,219

 

 

See accompanying notes to condensed financial statements.

 

5


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in-

 

 

Comprehensive

 

 

Retained

 

 

Treasury Stock

 

 

Noncontrolling

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income, Net

 

 

Earnings

 

 

Shares

 

 

Amount

 

 

Interests

 

 

Total

 

 

(in thousands)

 

Balance at December 31, 2021

 

65,472

 

 

$

6,547

 

 

$

854,512

 

 

$

(25,966

)

 

$

2,346,439

 

 

 

(5,361

)

 

$

(295,208

)

 

$

2,458

 

 

$

2,888,782

 

Stock option exercises

 

 

 

 

 

 

 

438

 

 

 

 

 

 

 

 

 

34

 

 

 

1,898

 

 

 

 

 

 

2,336

 

Issuance of stock for equity awards, net of forfeitures

 

 

 

 

 

 

 

(7,305

)

 

 

 

 

 

 

 

 

133

 

 

 

7,305

 

 

 

 

 

 

 

Tax withholdings on equity award vesting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49

)

 

 

(3,093

)

 

 

 

 

 

(3,093

)

Amortization of share-based compensation

 

 

 

 

 

 

 

5,965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,965

 

Total comprehensive income, net of taxes

 

 

 

 

 

 

 

 

 

 

489

 

 

 

17,434

 

 

 

 

 

 

 

 

 

152

 

 

 

18,075

 

Return of investment to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(200

)

 

 

(200

)

Balance at March 31, 2022

 

65,472

 

 

$

6,547

 

 

$

853,610

 

 

$

(25,477

)

 

$

2,363,873

 

 

 

(5,243

)

 

$

(289,098

)

 

$

2,410

 

 

$

2,911,865

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in-

 

 

Comprehensive

 

 

Retained

 

 

Treasury Stock

 

 

Noncontrolling

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income, Net

 

 

Earnings

 

 

Shares

 

 

Amount

 

 

Interests

 

 

Total

 

 

(in thousands)

 

Balance at December 31, 2020

 

65,472

 

 

$

6,547

 

 

$

844,979

 

 

$

(61,452

)

 

$

2,593,393

 

 

 

(5,434

)

 

$

(299,161

)

 

$

3,247

 

 

$

3,087,553

 

Stock option exercises

 

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

 

8

 

 

 

392

 

 

 

 

 

 

411

 

Issuance of stock for equity awards, net of forfeitures

 

 

 

 

 

 

 

(4,461

)

 

 

 

 

 

 

 

 

81

 

 

 

4,461

 

 

 

 

 

 

 

Tax withholdings on equity award vesting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39

)

 

 

(2,045

)

 

 

 

 

 

(2,045

)

Amortization of share-based compensation

 

 

 

 

 

 

 

5,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,722

 

Total comprehensive loss, net of taxes

 

 

 

 

 

 

 

 

 

 

248

 

 

 

(3,375

)

 

 

 

 

 

 

 

 

255

 

 

 

(2,872

)

Return of investment to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25

)

 

 

(25

)

Balance at March 31, 2021

 

65,472

 

 

$

6,547

 

 

$

846,259

 

 

$

(61,204

)

 

$

2,590,018

 

 

 

(5,384

)

 

$

(296,353

)

 

$

3,477

 

 

$

3,088,744

 

 

See accompanying notes to condensed financial statements.

 

6


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

 

(1) Basis for Preparation of the Condensed Financial Statements

The condensed financial statements included herein have been prepared by Kirby Corporation and its consolidated subsidiaries (the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including significant accounting policies normally included in annual financial statements, have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Certain reclassifications have been made to reflect the current presentation of financial information.

(2) Acquisition

On March 31, 2022, the Company paid $3.9 million in cash to purchase assets of a gearbox repair company in the distribution and services segment. Assets acquired consisted primarily of property and equipment.

(3) Revenues

The following table sets forth the Company’s revenues by major source (in thousands):

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

2022

 

 

2021

 

Marine transportation segment:

 

 

 

 

 

 

 

 

 

 

Inland transportation

 

 

 

 

 

$

277,910

 

 

$

224,451

 

Coastal transportation

 

 

 

 

 

 

77,626

 

 

 

76,500

 

 

 

 

 

 

 

$

355,536

 

 

$

300,951

 

Distribution and services segment:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

 

 

 

$

147,533

 

 

$

132,908

 

Oil and gas

 

 

 

 

 

 

107,713

 

 

 

62,991

 

 

 

 

 

 

 

$

255,246

 

 

$

195,899

 

Contract liabilities represent advance consideration received from customers, and are recognized as revenue over time as the related performance obligation is satisfied. Revenues recognized during the three months ended March 31, 2022 and 2021 that were included in the opening contract liability balances were $28.6 million and $30.8 million, respectively. The Company presents all contract liabilities within the deferred revenues financial statement caption on the balance sheets. The Company did not have any contract assets at March 31, 2022 or December 31, 2021. The Company applies the practical expedient that allows non-disclosure of information about remaining performance obligations that have original expected durations of one year or less.

 

(4) Segment Data

The Company’s operations are aggregated into two reportable business segments as follows:

Marine Transportation Segment ("KMT") — Provides marine transportation by United States flagged vessels principally of liquid cargoes throughout the United States inland waterway system, along all three United States coasts, and, to a lesser extent, in United States coastal transportation of dry-bulk cargoes. The principal products transported include petrochemicals, black oil, refined petroleum products, and agricultural chemicals.

Distribution and Services Segment ("KDS") — Provides after-market services and genuine replacement parts for engines, transmissions, reduction gears, and related equipment used in oilfield services, marine, power generation, on-highway, and other industrial applications. The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, and manufactures and remanufactures oilfield service equipment, including pressure pumping units, electric power generation equipment, specialized electrical distribution and control equipment, and high capacity energy storage/battery systems for oilfield service and railroad customers.

7


 

The Company’s two reportable business segments are managed separately based on fundamental differences in their operations. The Company evaluates the performance of its segments based on the contributions to operating income of the respective segments, before income taxes, interest, gains or losses on disposition of assets, other nonoperating income, noncontrolling interests, accounting changes, and nonrecurring items. Intersegment revenues, based on market-based pricing, of KDS from KMT of $7.6 million and $4.9 million for the three months ended March 31, 2022 and 2021, respectively, as well as the related intersegment profit of $0.8 million and $0.5 million for the three months ended March 31, 2022 and 2021, respectively, have been eliminated from the tables below.

The following tables set forth the Company’s revenues and profit or loss by reportable segment and total assets (in thousands):

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

Marine transportation

 

 

 

 

 

$

355,536

 

 

$

300,951

 

Distribution and services

 

 

 

 

 

 

255,246

 

 

 

195,899

 

 

 

 

 

 

 

$

610,782

 

 

$

496,850

 

Segment profit:

 

 

 

 

 

 

 

 

 

 

Marine transportation

 

 

 

 

 

$

16,935

 

 

$

1,940

 

Distribution and services

 

 

 

 

 

 

10,971

 

 

 

2,911

 

Other

 

 

 

 

 

 

(4,107

)

 

 

(8,862

)

 

 

 

 

 

 

$

23,799

 

 

$

(4,011

)

 

 

 

March 31,
2022

 

 

December 31,
2021

 

Total assets: