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Company Profile
Kirby Corporation, headquartered in Houston, Texas, is the nation's premier tank barge operator, transporting bulk liquid products throughout the Mississippi River System, along the Gulf Intracoastal Waterway, coastwise along all three U.S. coasts and in Alaska and Hawaii for a blue chip customer base.
Kirby's inland tank barge fleet represents approximately 27% of the U.S. inland tank barge capacity, transporting petrochemicals, black oil products, refined petroleum products and agricultural products. Kirby's inland fleet consists of 827 tank barges with 16.3 million barrels of capacity and 244 towboats.
Kirby's offshore tank barge fleet, one of the youngest fleets in the U.S coastwise trade, transports primarily refined petroleum products along the East Coast, West Coast and Gulf Coast, as well as Alaska and Hawaii. Kirby's offshore tank barge fleet consists of 57 tank barges with 3.8 million barrels of capacity and 63 tugboats. Kirby also owns and operates four offshore articulated dry-bulk barge and tug units primarily transporting coal and limestone rock across the Gulf of Mexico.
Through Kirby's diesel engine services segment, Kirby is the leading after market service provider for medium-speed and high-speed diesel engines, reduction gears and ancillary products for marine and power generation applications. Kirby also serves as a distributor and service provider for high-speed diesel engines, transmissions, pumps and compression products, and manufactures oilfield service equipment, including hydraulic fracturing equipment, for the land-based pressure pumping and oilfield service markets. |
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Highlights
2011 Third Quarter Summary
- Marine Transportation:
- U.S petrochemical volumes continued to improve as low U.S. natural gas prices positively impacted the global competitiveness of the U.S. petrochemical industry
- Higher production levels led to increased transportation volumes for both domestic consumers and terminals for export destinations
- U.S. refinery utilization levels stable with continued demand for exportation of diesel fuel and heavy fuel oils
- New demand for inland transportation of crude oil from shale formations in South Texas and an increase in crude oil movements from St. Louis to the Gulf Coast
- Inland petrochemical and black oil products fleets utilization levels in the low to mid 90% range
- Continued improvement in inland transportation term and spot contract rates negotiated during third quarter
- High diesel fuel prices contributed to higher marine transportation revenues, as well as higher operating costs
- Coastwise equipment utilization averaged in the mid to high 70% range with the Atlantic, Pacific and Hawaii fleets experiencing higher rates and the New York harbor fleet a much lower rate due to overcapacity of equipment in the bunkering markets
- Operating margin of 22.2% for 2011 third quarter compared with 22.1% for 2010 third quarter
- Strong inland petrochemical and black oil products demand and equipment utilization levels
- Higher inland transportation term and spot contract pricing
- Partially offset by lower margin from the coastwise market and by rising diesel fuel prices
- Diesel Engine Services:
- Increase in both revenues and operating income primarily attributable to the April 15 acquisition of United Holdings
- United benefited from strong market for manufacturing and sale of hydraulic fracturing equipment and sale of transmissions and diesel engines
- Benefited from strong power generation market with engine-generator set upgrades and strong direct parts and engine sales
- Gulf Coast oil services market remained weak as customers continued to defer major maintenance projects
- Operating margin of 10.0% for fall 2011 third quarter compared with 9.3% for the 2010 third quarter
2011 Fourth Quarter and Year Guidance
- Earnings Guidance:
- Fourth quarter guidance of $.97 to $1.02 per share, a 64% to 73% increase compared with $.59 reported for the 2010 fourth quarter
- 2011 year guidance of $3.30 to $3.35 per share compared with $2.15 for 2010
- Marine Transportation:
- Continued strong petrochemical and black oil products demand with utilization in the low to mid 90% levels
- Continued improvement in inland term contract renewals and spot contract pricing
- Fourth quarter results will be negatively impacted by winter weather conditions
- K-Sea anticipated to contribute with positive earnings; however, will be negatively impacted by seasonality in the refined products market and winter weather conditions
- Diesel Engine Services:
- Continued strong demand for manufacturing of hydraulic fracturing equipment and sale and service of transmissions and engines
- Power generation market slower with fewer engine-generator set upgrades
- Gulf Coast oil services market anticipated to remain weak
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* Net earnings attributable to Kirby and earnings per share attributable to Kirby common stockholders after adjustments are non-GAAP financial measures used by Kirby that exclude non-recurring adjustments in order to present a measure of net earnings that facilitates a comparison of results from one period to results from another period on a more consistent basis, since the non-recurring items are materially different in nature and amount from one period to another. The adjustments generally represent items that are outside normal business operations and are therefore difficult to predict for future periods.
** 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 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.
Financial Highlights
(In millions, except for
share amounts) |
Third Quarter |
Nine Months |
2011 |
2010 |
Increase |
2011 |
2010 |
Increase |
Marine Revenues |
$351.2 |
$232.8 |
$118.4 |
$859.5 |
$682.6 |
$176.9 |
| Diesel Revenues |
$212.4 |
$48.5 |
$163.9 |
$440.8 |
$140.6 |
$300.2 |
| Total Revenues |
$563.6 |
$281.3 |
$282.3 |
$1,300.3 |
$823.2 |
$477.1 |
| Operating Income |
$92.3 |
$52.7 |
$39.6 |
$219.4 |
$146.4 |
$73.0 |
| Net Earnings |
$52.7 |
$30.7 |
$22.0 |
$126.9 |
$84.6 |
$42.3 |
| EPS - diluted |
$.94 |
$.57 |
$.37 |
$2.33 |
$1.56 |
$.77 |
| Fleet
The U.S. inland waterway system is comprised mainly of the Mississippi River and its tributaries and the Gulf Intracoastal Waterway (see map below) and is one of the busiest, cost-efficient, productive and safest transportation systems in the world. The inland waterway system comprises 12,000 miles of navigable interconnected rivers, canals and intracoastal waterways serving the U.S. as water highways.
The U.S. also benefits from the coastwise trade of bulk liquid and dry products to ports along the East Coast, Gulf Coast, and West Coast, as well as in Alaska and Hawaii.
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