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Kirby Corporation Announces Record 2013 Third Quarter Results



        Kirby Corporation Announces Record 2013 Third Quarter Results

- 2013 third quarter earnings per share were $1.21 compared with $.95 earned
in the 2012 third quarter

- 2013 third quarter included a credit of $.08 per share from eliminating
United's three-year earnout contingent liability

- 2013 fourth quarter earnings per share guidance is $1.05 to $1.15 compared
with $1.03 earned in the 2012 fourth quarter

- 2013 year earnings per share guidance revised to $4.37 to $4.47 compared
with $3.73 earned in 2012

PR Newswire

HOUSTON, Oct. 28, 2013

HOUSTON, Oct. 28, 2013 /PRNewswire/ -- Kirby Corporation ("Kirby") (NYSE:KEX)
today announced record net earnings attributable to Kirby for the third
quarter ended September 30, 2013 of $69.1 million, or $1.21 per share,
compared with $53.1 million, or $.95 per share, for the 2012 third quarter. 
Consolidated revenues for the 2013 third quarter were $551.1 million compared
with $521.3 million reported for the 2012 third quarter. 

Kirby's 2013 third quarter results included a $7.9 million before taxes, or
$.08 per share, credit reducing the fair value of the contingent earnout
liability, thereby eliminating the remaining liability associated with the
acquisition of United Holdings LLC in April 2011. 

Joe Pyne, Kirby's Chairman and Chief Executive Officer, commented, "For both
our inland and coastal marine transportation markets, strong demand, high tank
barge utilization levels and favorable pricing trends continued during the
third quarter.  However, our land-based diesel engine services business
continues to be very challenging.  The significant increase in pressure
pumping horsepower during 2010, 2011 and early 2012, along with current low
natural gas prices, resulted in a very weak market for our land-based diesel
engine services sector.  However, there are signs that this cycle has bottomed
and we anticipate an improved market sometime in 2014."

Kirby reported net earnings attributable to Kirby for the 2013 first nine
months of $188.8 million, or $3.32 per share, compared with $151.6 million, or
$2.70 per share, for the first nine months of 2012.  Consolidated revenues for
the 2013 first nine months were $1.67 billion compared with $1.60 billion for
the first nine months of 2012.

Segment Results – Marine Transportation
Marine transportation revenues for the 2013 third quarter were $436.2 million
compared with $349.8 million for the 2012 third quarter.  Operating income for
the 2013 third quarter was $113.6 million compared with $81.7 million for the
2012 third quarter.

The inland marine transportation markets continued their strong performance
with the petrochemical, black oil and refined products fleets consistently in
the 90% to 95% utilization range, with favorable pricing trends.  During July,
adverse operating conditions continued due to the Algiers Lock closure from
structural damage that created heavy congestion and delays in the New Orleans
area, and resulting congestion and delays at the Bayou Sorrels and Port Allen
Locks.  With the reopening of the Algiers Lock in mid-July, traffic delays
returned to normal levels by the end of the month.  During September, low
water levels on the upper Mississippi River System lead to the light loading
of tank barges destined for that area. 

The coastal marine transportation markets also continued their strong
performance with fleet utilization in the 90% range compared with the 75% to
80% range for the 2012 third quarter, leading to favorable short-term and
long-term contract renewals and higher spot contract pricing.  The higher
utilization resulted from increased demand for crude oil and gas condensate
movements and continued success in expanding the coastal customer base to
include inland's major customers with coastal requirements. The third quarter
also benefited from fewer shipyard days compared with previous quarters, as
well as cost reductions from the sale in early August 2013 of the New York
Harbor bunkering fleet that operated at a loss.    

The marine transportation operating margin for the 2013 third quarter was
26.1% compared with 23.4% for the third quarter of 2012. 

Segment Results – Diesel Engine Services
Diesel engine services revenues for the 2013 third quarter were $114.9 million
compared with $171.6 million for the 2012 third quarter.  Operating income for
the 2013 third quarter was $9.1 million, including a $7.9 million credit to
the contingent earnout liability, compared with operating income of $14.6
million for the 2012 third quarter.

The lower revenue and operating income primarily reflected a continuation of a
weak land-based environment for the manufacturing of oil service equipment,
including pressure pumping units, and lower sales and service of land-based
engines, transmissions and parts.  The market for the remanufacturing of older
pressure pumping units remained relatively stable.  The marine diesel engine
services market benefited from major service projects for inland and coastal
customers.  The power generation market benefited from generator set upgrades
and parts sales for both domestic and international customers.

The diesel engine services operating margin was 7.9% for the 2013 third
quarter, including the positive impact of the $7.9 million credit to the
contingent earnout liability, compared with 8.5% for the 2012 third quarter. 

Cash Generation
Cash flow remained strong during the 2013 first nine months, with EBITDA of
$448.3 million compared with $370.4 million for the 2012 first nine months. 
The cash flow was used in part to fund capital expenditures of $207.0 million,
including $127.0 million for new inland tank barge and towboat construction
and progress payments on the construction of two offshore dry-bulk barge and
tug units completed during the 2013 second quarter, and $80.0 million
primarily for upgrades to the existing inland and coastal fleets.  Total debt
as of September 30, 2013 was $860.9 million and the debt-to-capitalization
ratio was 31.0%, a significant decrease from total debt as of December 31,
2012 of $1.14 billion and debt-to-capitalization ratio of 39.9%.  

Outlook
Commenting on the 2013 fourth quarter and full year market outlook and
guidance, Mr. Pyne said, "Our earnings guidance for the 2013 fourth quarter is
$1.05 to $1.15 per share compared 2012 fourth quarter earnings of $1.03 per
share that included a $.09 per share credit to the United contingent earnout
liability.  For the 2013 year, we raised and narrowed our guidance range to
$4.37 to $4.47 per share compared with $3.73 for 2012.  This 2013 annual
guidance range includes a cumulative $0.20 per share credit to the United
contingent earnout liability. We anticipate continued strong demand across all
inland marine transportation markets during the fourth quarter, utilization
levels remaining in the 90% to 95% range and favorable pricing trends.  For
our coastal marine transportation markets, we anticipate continued strong
demand, 90% utilization levels and improving pricing trends.  Our fourth
quarter guidance reflects the beginning of unfavorable winter weather
conditions for both our inland and coastal transportation markets.  For our
diesel engine services segment, we continue to believe we are at the bottom of
the cycle in our land-based market and should begin to see some improvement
sometime in 2014.  Our fourth quarter guidance assumes our diesel engine
services marine and power generation markets will remain stable and our
land-based market weak." 

Mr. Pyne continued, "Our 2013 capital spending guidance is currently in the
$240 to $250 million range, including approximately $143 million for the
construction of 68 inland tank barges, three inland towboats, and progress
payments on the construction of two offshore articulated dry-bulk barge and
tugboat units placed in service in the 2013 second quarter.  The balance of
$97 to $107 million is primarily capital upgrades and improvements to existing
inland and coastal marine equipment and facilities, and diesel engine services
facilities." 

Conference Call
A conference call is scheduled at 10:00 a.m. central time today, Monday,
October 28, 2013, to discuss the 2013 third quarter performance as well as the
outlook for the 2013 fourth quarter and year.  The conference call number is
800-446-2782 for domestic callers and 847-413-3235 for international callers. 
The leader's name is Steve Holcomb.  The confirmation number is 35892904.  An
audio playback will be available at 1:00 p.m. central time on Monday, October
28, through 5:00 p.m. central time on Friday, November 29, 2013 by dialing
888-843-7419 for domestic and 630-652-3042 for international callers.  A live
audio webcast of the conference call will be available to the public and a
replay available after the 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 2012 year and quarters are available at Kirby's
website, http://www.kirbycorp.com/, under the caption Performance Measurements
in the Investor Relations section. 

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.  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, 2012 filed with the Securities and Exchange Commission. 

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, the Gulf Intracoastal Waterway, coastwise along all
three United States coasts and in Alaska and Hawaii.  Kirby transports
petrochemicals, refined petroleum products, black oil and agricultural
chemicals by tank barge.  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 and power generation applications.  Kirby
also distributes and services diesel engines, transmissions, pumps,
compression products and manufactures and remanufactures oilfield service
equipment, including pressure pumping units, for land-based pressure pumping
and oilfield service markets.

 

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                         Third Quarter             Nine Months
                         2013         2012         2013          2012
                         (unaudited, $ in thousands except per share amounts)
Revenues:
     Marine              $   436,181  $            $   1,278,567 $   1,027,923
transportation                        349,771
     Diesel engine       114,924      171,553      395,231       572,184
services
                         551,105      521,324      1,673,798     1,600,107
Costs and expenses:
     Costs of sales and  344,396      344,990      1,083,257     1,075,265
operating expenses
     Selling, general    43,241       44,473       128,335       140,772
and administrative
     Taxes, other than   3,714        3,455        12,589        11,276
on income
     Depreciation and    41,640       35,729       122,907       107,400
amortization
     Loss (gain) on      (223)        40           (728)         (1)
disposition of assets
                         432,768      428,687      1,346,360     1,334,712
     Operating income    118,337      92,637       327,438       265,395
  Other income (expense) 60           (56)         236           123
  Interest expense       (6,694)      (6,056)      (21,901)      (17,797)
     Earnings before     111,703      86,525       305,773       247,721
taxes on income
  Provision for taxes on (42,007)     (32,794)     (114,733)     (93,676)
income
     Net earnings        69,696       53,731       191,040       154,045
Less: Net earnings
attributable to          (573)        (676)        (2,246)       (2,495)
noncontrolling interests
     Net earnings        $    69,123  $            $             $     151,550
attributable to Kirby                  53,055      188,794
Net earnings per share
attributable to Kirby
common stockholders: ^  
     Basic               $            $            $             $          
                         1.22            .95       3.33           2.71
     Diluted             $            $            $             $          
                         1.21            .95       3.32           2.70
Common stock outstanding
(in thousands):
     Basic               56,375       55,445       56,329        55,416
     Diluted             56,572       55,627       56,520        55,634
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                         Third Quarter             Nine Months
                         2013         2012         2013          2012
                         (unaudited, $ in thousands)
EBITDA: ^(1)
     Net earnings        $     69,123 $     53,055 $    188,794  $   151,550
attributable to Kirby
     Interest expense    6,694        6,056        21,901        17,797
     Provision for taxes 42,007       32,794       114,733       93,676
on income
     Depreciation and    41,640       35,729       122,907       107,400
amortization
                         $    159,464 $    127,634 $    448,335  $    370,423
Capital expenditures     $     38,872 $    102,041 $    207,047  $    255,887
                                                   September 30,  
                                                   2013          2012
                                                   (unaudited, $ in thousands)
Long-term debt,
including current                                  $    860,930  $     781,970
portion
Total equity                                       $ 1,912,255   $ 1,620,711
Debt to capitalization                             31.0%         32.5%
ratio

MARINE TRANSPORTATION STATEMENTS OF EARNINGS
                         Third Quarter               Nine Months
                         2013         2012         2013          2012
                         (unaudited, $ in thousands)
Marine transportation    $   436,181  $    349,771 $ 1,278,567   $ 1,027,923
revenues
Costs and expenses:
     Costs of sales and  253,093      208,165      771,654       622,038
operating expenses
     Selling, general    28,132       24,759       83,547        78,164
and administrative
     Taxes, other than   3,341        2,992        11,179        9,877
on income
     Depreciation and    37,968       32,160       111,724       95,929
amortization
                         322,534      268,076      978,104       806,008
         Operating       $   113,647  $     81,695 $  300,463    $  221,915
income
         Operating       26.1%        23.4%        23.5%         21.6%
margins
DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS
                             Third Quarter         Nine Months
                         2013         2012         2013          2012
                         (unaudited, $ in thousands)
Diesel engine services   $   114,924  $   171,553  $   395,231   $   572,184
revenues
Costs and expenses:
     Costs of sales and  91,303       136,825      311,603       453,227
operating expenses
     Selling, general    11,470       16,880       35,904        55,134
and administrative
     Taxes, other than   352          453          1,361         1,365
income
     Depreciation and    2,722        2,792        8,332         9,183
amortization
                         105,847      156,950      357,200       518,909
         Operating       $      9,077 $    14,603  $     38,031  $     53,275
income
         Operating       7.9%         8.5%         9.6%          9.3%
margins
OTHER COSTS AND EXPENSES
                         Third Quarter             Nine Months
                         2013         2012         2013          2012
                         (unaudited, $ in thousands)
General corporate        $      4,610 $      3,621 $      11,784 $      
expenses                                                          9,796
Loss (gain) on           $            $            $             $            
disposition of assets     (223)       40            (728)        (1)
MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS
                         Third Quarter             Nine Months
                         2013         2012         2013          2012
Inland Performance
Measurements:
          Ton Miles (in  2,904        2,791        8,885         9,267
millions) ^(2)
          Revenue/Ton    9.9          9.8          9.7           8.7
Mile (cents/tm) ^(3)
          Towboats       256          246          258           242
operated (average) ^(4)
          Delay Days     1,289        1,244        5,858         4,879
^(5)
          Average cost
per gallon of fuel       $ 3.11       $ 3.10       $ 3.20        $ 3.20
consumed
Barges (active):
          Inland tank barges                       855           853
          Coastal tank barges                      72            53
          Offshore dry-cargo barges                8             4
Barrel capacities (in millions):
          Inland tank barges                       17.2          16.9
          Coastal tank barges                      6.0           3.7

 

 

      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.  EBITDA is presented because of its wide acceptance as a
      financial indicator.  EBITDA is one of the performance measures used in
^ (1) 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.
      Ton miles indicate fleet productivity by measuring the distance (in
^(2)  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.
      Inland marine transportation revenues divided by ton miles.  Example: 
^(3)  Third quarter 2013 inland marine transportation revenues of $288,661,000
      divided by 2,904,000,000 inland marine transportation ton miles = 9.9
      cents.
^(4)  Towboats operated are the average number of owned and chartered towboats
      operated during the period.
      Delay days measures the lost time incurred by a tow (towboat and one or
^(5)  more tank barges) during transit.  The measure includes transit delays
      caused by weather, lock congestion and other navigational factors.

 

 

SOURCE Kirby Corporation

Website: http://www.kirbycorp.com
Contact: Steve Holcomb, 713-435-1135
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