UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): October 29,
2008
Kirby
Corporation
(Exact
name of registrant as specified in its charter)
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Nevada
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1-7615
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74-1884980
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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55
Waugh Drive, Suite 1000
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77007
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Houston,
Texas
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(Zip
Code)
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(Address
of principal executive offices)
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Registrant’s
telephone number, including area code:
(713)
435-1000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
£ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02.
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Results
of Operations and Financial
Condition
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On
October 29, 2008, Kirby Corporation (“Kirby”) issued a press release announcing
earnings for the three months and nine months ended September 30,
2008. A copy of the press release is attached as Exhibit 99.1 to this
report.
EBITDA, a
non-GAAP financial measure, is used in the press release. Kirby
defines EBITDA as net earnings before interest expense, taxes on income,
depreciation and amortization. Kirby has historically evaluated its
operating performance using numerous measures, one of which is
EBITDA. 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. A quantitative reconciliation of
EBITDA to GAAP net earnings for the 2008 and 2007 third quarters and first nine
months is included in the press release.
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Item
9.01.
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Financial
Statements and Exhibits
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(c)
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Exhibits:
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99.1
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Press
release dated October 29, 2008
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
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KIRBY
CORPORATION
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(Registrant)
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By:
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/s/
Norman W. Nolen
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Norman
W. Nolen
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Executive
Vice President, Treasurer
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and
Chief Financial
Officer
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Dated: October
30, 2008
EXHIBIT
INDEX
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Press
release dated October 29, 2008
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Exhibit 99.1
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KIRBY
CORPORATION
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Contact: Steve
Holcomb
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713-435-1135
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FOR IMMEDIATE
RELEASE
KIRBY
CORPORATION ANNOUNCES RECORD
RESULTS
FOR THE 2008 THIRD QUARTER
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·
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2008 third quarter earnings per
share were $.77, a 20% increase compared with $.64 earned in the 2007
third quarter
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·
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Purchased 756,900 shares of
Kirby common stock at an average price of $39.90 per
share
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·
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2008 fourth quarter earnings
per share guidance is $.77 to $.82 versus $.64 earned in the 2007 fourth
quarter
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·
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2008 year earnings per share
guidance is $2.96 to $3.01 versus $2.29 earned in
2007
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Houston, Texas (October 29,
2008) – Kirby Corporation (“Kirby”) (NYSE:KEX) today announced record net
earnings for the third quarter ended September 30, 2008 of $41.8 million, or
$.77 per share, compared with net earnings of $34.4 million, or $.64 per share,
for the 2007 third quarter. The 2008 third quarter results included
an estimated $.09 per share negative impact from Hurricanes Gustav and Ike,
partially offset by a $.04 per share positive timing impact from lower diesel
fuel prices. Consolidated revenues for the 2008 third quarter were a
record $354.6 million, an increase of 17% over the $302.6 million reported for
the 2007 third quarter.
“Our
record third quarter results mark the 19th
consecutive quarter that our net earnings exceeded the same quarter of the
previous year, despite the negative impact from Hurricanes Gustav and Ike,” said
Joe Pyne, Kirby’s President and Chief Executive Officer. “Our marine
transportation segment’s results reflected continued strong demand in the
majority of our markets and pricing for our services continued to trend
upward. Our diesel engine services segment’s results reflected
continued strong demand in our medium-speed markets.”
Impact
of Hurricanes Gustav and Ike
Hurricane
Gustav, which made landfall between Houma and Morgan City, Louisiana on
September 1, resulted in the closure for several days of the Gulf Intracoastal
Waterway in Louisiana, the closure of Kirby’s Gulf Coast diesel engine services
operations for several days, as well as disruptions to the operations of Kirby’s
four offshore barge and tug units. Hurricane Ike made
landfall on September 13 in the Houston/Galveston area as a strong Category 2
hurricane, closing much of the Gulf Coast petrochemical and refining capacity
prior to landfall. Strong winds and a 15 to 20 foot storm surge
significantly affected petrochemical and refining plants in the Houston and Port
Arthur/Beaumont areas, some of which are still not back in operation or are
operating at reduced levels. Additionally, eight miles of the
Gulf Intracoastal Waterway between the Houston Ship Channel and Port Arthur,
Texas were closed for 11 days after Ike’s landfall due to obstructions in the
waterway, completely stopping all movements to and from the Houston
area. Hurricanes Gustav and Ike caused no material damage to Kirby’s
active tank barge and towboat fleet. The estimated impact of the
hurricanes on the 2008 third quarter was a negative $.09 per
share.
Marine
Transportation Operating Results
Marine
transportation revenues and operating income for the 2008 third quarter
increased 19% and 18%, respectively, compared with the third quarter of
2007. The higher third quarter results reflected favorable demand in
Kirby’s petrochemical and black oil markets, partially offset by continued
weakness in the upriver refined products market. While demand during
the third quarter softened for certain products, overall barge utilization
remained high. Operating conditions were favorable in July and
August, but deteriorated in September due to Hurricanes Gustav and
Ike. Ton miles for the 2008 third quarter decreased 21% compared with
the 2007 third quarter due primarily to disruptions caused by the two Gulf Coast
hurricanes and a continued soft Midwest refined products market. On a
positive note, the third quarter results reflected a $.04 per share benefit from
the timing impact of falling diesel fuel prices, which declined from an average
high of $4.33 per gallon on July 14 to an average low of $3.11 per gallon on
September 30. The 2008 third quarter operating margin was 22.7%
compared with 22.9% for the 2007 third quarter.
Diesel
Engine Services Operating Results
Diesel
engine services revenues and operating income for the 2008 third quarter
increased 11% and 12%, respectively, compared with the 2007 third quarter,
despite the negative impact of Hurricane Gustav. The higher results
reflected continued strong service activity and direct parts sales in the
medium-speed markets, led by favorable Midwest marine and power generation
markets. The high-speed market continued to experience a slowdown in
the Gulf Coast oil services sector, but was stronger than the 2008 first
half. The diesel engine services operating margin was 15.7% for the
2008 third quarter compared with 15.5% for the 2007 third quarter.
Treasury
Stock Purchases
During
August, September and October 2008, Kirby purchased 756,900 shares of its common
stock for $30,202,000, for an average purchase price of $39.90 per
share. Since the beginning of 2008, Kirby has purchased 837,400
shares of its common stock for $33,377,000, for an average purchase price of
$39.86 per share. Kirby has 1,420,000 shares remaining under its
current Board of Directors repurchase authorization.
Fourth
Quarter and Year Outlook
Commenting
on the 2008 fourth quarter market conditions and guidance, Mr. Pyne said,
“Certainly the current global financial situation has significantly reduced our
visibility. Hurricanes Gustav and Ike materially affected the Gulf
Coast petrochemical and refining industries. Many of these facilities
are just now returning to full operational status. Until inventories
get back to desired levels, we anticipate our fleet utilization will maintain
its high utilization rates. Business levels in our diesel engine
services markets are anticipated to remain favorable, with some improvement in
the Gulf Coast oil services market. For the 2008 fourth quarter, our
earnings guidance is $.77 to $.82 per share, reflecting a 20% to 28% increase
compared with $.64 per share for the 2007 fourth quarter. For the
2008 year, our earnings guidance is $2.96 to $3.01 per share, reflecting a 29%
to 31% increase over 2007 net earnings of $2.29 per share. Our 2008
capital spending guidance range remains at $165 to $175 million, including
approximately $90 million for the construction of new tank barges and
towboats.”
Conference
Call
A
conference call is scheduled at 10:00 a.m. central time tomorrow, Thursday,
October 30, 2008, to discuss the 2008 third quarter performance as well as the
outlook for the 2008 fourth quarter and year. The conference call
number is 888-328-2514 for domestic callers and 706-679-3262 for international
callers. The leader’s name is Steve Holcomb. An audio
playback will be available at 1:00 p.m. central time on Thursday, October 30,
through 6:00 p.m. central time on Friday, November 28, by dialing 800-642-1687
for domestic and 706-645-9291 for international callers. The
conference ID number is 68666693. 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 homepage 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 before
interest expense, taxes on income, depreciation and amortization. A
reconciliation of EBITDA with GAAP net earnings is included in this press
release. This earnings press release also includes marine
transportation performance measures, consisting of ton miles, revenue per ton
mile, towboats operated and delay days. Comparable performance
measures for the 2007 and 2006 years and quarters are available at Kirby’s web
site, http://www.kirbycorp.com/,
under the caption Performance Measurements in the Investor Relations
section.
About
Kirby Corporation
Kirby
Corporation, based in Houston, Texas, operates inland tank barges and towing
vessels, transporting petrochemicals, black oil products, refined petroleum
products and agricultural chemicals throughout the United States inland waterway
system. Kirby also owns and operates four ocean-going barge and tug
units transporting dry-bulk commodities in United States coastwise
trade. 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, power generation and railroad
applications.
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, 2007
filed with the Securities and Exchange Commission.
A summary
of the results for the third quarter and first nine months follows:
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
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Third Quarter
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Nine Months
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|||||||||||||||
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2008
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2007
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2008
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2007
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(unaudited,
$ in thousands except per share amounts)
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Revenues:
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Marine
transportation
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$ | 286,880 | $ | 241,329 | $ | 830,014 | $ | 680,139 | ||||||||
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Diesel
engine services
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67,767 | 61,227 | 203,463 | 184,636 | ||||||||||||
| 354,647 | 302,556 | 1,033,477 | 864,775 | |||||||||||||
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Costs
and expenses:
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Costs
of sales and operating expenses
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220,875 | 186,338 | 649,480 | 542,545 | ||||||||||||
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Selling,
general and administrative
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36,026 | 31,313 | 102,349 | 91,287 | ||||||||||||
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Taxes,
other than on income
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3,560 | 3,237 | 10,548 | 9,626 | ||||||||||||
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Depreciation
and amortization
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22,420 | 20,407 | 67,132 | 60,274 | ||||||||||||
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Loss
(gain) on disposition of assets
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166 | (30 | ) | (276 | ) | 531 | ||||||||||
| 283,047 | 241,265 | 829,233 | 704,263 | |||||||||||||
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Operating
income
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71,600 | 61,291 | 204,244 | 160,512 | ||||||||||||
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Other
expense
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(515 | ) | (252 | ) | (1,101 | ) | (457 | ) | ||||||||
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Interest
expense
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(3,375 | ) | (5,236 | ) | (10,665 | ) | (15,826 | ) | ||||||||
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Earnings
before taxes on income
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67,710 | 55,803 | 192,478 | 144,229 | ||||||||||||
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Provision
for taxes on income
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(25,932 | ) | (21,373 | ) | (73,719 | ) | (55,240 | ) | ||||||||
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Net
earnings
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$ | 41,778 | $ | 34,430 | $ | 118,759 | $ | 88,989 | ||||||||
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Net
earnings per share of common stock:
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||||||||||||||||
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Basic
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$ | .78 | $ | .65 | $ | 2.22 | $ | 1.68 | ||||||||
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Diluted
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$ | .77 | $ | .64 | $ | 2.19 | $ | 1.66 | ||||||||
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Common
stock outstanding (in thousands):
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||||||||||||||||
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Basic
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53,549 | 52,983 | 53,464 | 52,892 | ||||||||||||
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Diluted
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54,197 | 53,802 | 54,179 | 53,709 | ||||||||||||
CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
|
Third Quarter
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Nine Months
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|||||||||||||||
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2008
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2007
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2008
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2007
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(unaudited,
$ in thousands)
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EBITDA: (1)
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Net
earnings
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$ | 41,778 | $ | 34,430 | $ | 118,759 | $ | 88,989 | ||||||||
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Interest
expense
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3,375 | 5,236 | 10,665 | 15,826 | ||||||||||||
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Provision
for taxes on income
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25,932 | 21,373 | 73,719 | 55,240 | ||||||||||||
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Depreciation
and amortization
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22,420 | 20,407 | 67,132 | 60,274 | ||||||||||||
| $ | 93,505 | $ | 81,446 | $ | 270,275 | $ | 220,329 | |||||||||
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Capital
expenditures
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$ | 35,014 | $ | 27,455 | $ | 141,525 | $ | 123,027 | ||||||||
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Acquisitions
of businesses and marine equipment
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$ | 302 | $ | 12,374 | $ | 5,436 | $ | 61,766 | ||||||||
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September 30,
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2008
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2007
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(unaudited,
$ in thousands)
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||||||||||||||||
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Long-term
debt, including current portion
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$ | 269,170 | $ | 333,732 | ||||||||||||
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Stockholders’
equity
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$ | 886,116 | $ | 732,241 | ||||||||||||
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Debt
to capitalization ratio
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23.3 | % | 31.3 | % | ||||||||||||
MARINE TRANSPORTATION
STATEMENTS OF EARNINGS
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Third Quarter
|
Nine Months
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|||||||||||||||
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2008
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2007
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2008
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2007
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(unaudited,
$ in thousands)
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||||||||||||||||
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Marine
transportation revenues
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$ | 286,880 | $ | 241,329 | $ | 830,014 | $ | 680,139 | ||||||||
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Costs
and expenses:
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||||||||||||||||
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Costs
of sales and operating expenses
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173,249 | 143,232 | 507,083 | 411,299 | ||||||||||||
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Selling,
general and administrative
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24,477 | 20,925 | 68,382 | 61,796 | ||||||||||||
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Taxes,
other than on income
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3,318 | 3,020 | 9,741 | 8,901 | ||||||||||||
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Depreciation
and amortization
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20,811 | 18,939 | 62,113 | 56,200 | ||||||||||||
| 221,855 | 186,116 | 647,319 | 538,196 | |||||||||||||
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Operating
income
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$ | 65,025 | $ | 55,213 | $ | 182,695 | $ | 141,943 | ||||||||
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Operating
margins
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22.7 | % | 22.9 | % | 22.0 | % | 20.9 | % | ||||||||
DIESEL ENGINE SERVICES
STATEMENTS OF EARNINGS
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Third Quarter
|
Nine Months
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2008
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2007
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2008
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2007
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(unaudited,
$ in thousands)
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||||||||||||||||
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Diesel
engine services revenues
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$ | 67,767 | $ | 61,227 | $ | 203,463 | $ | 184,636 | ||||||||
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Costs
and expenses:
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||||||||||||||||
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Costs
of sales and operating expenses
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47,626 | 43,106 | 142,397 | 131,246 | ||||||||||||
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Selling,
general and administrative
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8,164 | 7,358 | 24,506 | 21,080 | ||||||||||||
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Taxes,
other than income
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229 | 203 | 757 | 638 | ||||||||||||
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Depreciation
and amortization
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1,121 | 1,085 | 3,715 | 2,976 | ||||||||||||
| 57,140 | 51,752 | 171,375 | 155,940 | |||||||||||||
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Operating
income
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$ | 10,627 | $ | 9,475 | $ | 32,088 | $ | 28,696 | ||||||||
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Operating
margins
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15.7 | % | 15.5 | % | 15.8 | % | 15.5 | % | ||||||||
OTHER COSTS AND
EXPENSES
|
Third Quarter
|
Nine Months
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|||||||||||||||
|
2008
|
2007
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2008
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2007
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|||||||||||||
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(unaudited,
$ in thousands)
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||||||||||||||||
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General
corporate expenses
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$ | 3,886 | $ | 3,427 | $ | 10,815 | $ | 9,596 | ||||||||
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Loss
(gain) on disposition of assets
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$ | 166 | $ | (30 | ) | $ | (276 | ) | $ | 531 | ||||||
MARINE TRANSPORTATION
PERFORMANCE MEASUREMENTS
|
Third Quarter
|
Nine Months
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|||||||||||||||
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2008
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2007
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2008
|
2007
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|||||||||||||
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Ton
Miles (in millions) (2)
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3,459 | 4,353 | 10,975 | 12,510 | ||||||||||||
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Revenue/Ton
Mile (cents/tm) (3)
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7.9 | 5.3 | 7.2 | 5.2 | ||||||||||||
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Towboats
operated (average) (4)
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255 | 255 | 258 | 252 | ||||||||||||
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Delay
Days (5)
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1,429 | 1,444 | 6,341 | 5,846 | ||||||||||||
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Average
cost per gallon of fuel consumed
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$ | 3.99 | $ | 2.21 | $ | 3.40 | $ | 1.96 | ||||||||
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Tank
barges:
|
||||||||||||||||
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Active
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915 | 913 | ||||||||||||||
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Inactive
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64 | 49 | ||||||||||||||
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Barrel
capacities (in millions):
|
||||||||||||||||
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Active
|
17.5 | 17.3 | ||||||||||||||
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Inactive
|
1.1 | .9 | ||||||||||||||
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(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 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.
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(2)
|
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.
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(3)
|
Inland
marine transportation revenues divided by ton
miles. Example: Third quarter 2008 inland marine
revenues of $274,869,000 divided by 3,459,000,000 marine transportation
ton miles = 7.9 cents.
|
|
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(4)
|
Towboats
operated are the average number of owned and chartered towboats operated
during the period.
|
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(5)
|
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.
|