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form8k.htm

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): July 25, 2007

Kirby Corporation

(Exact name of registrant as specified in its charter)

Nevada	1-7615	74-1884980
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

55 Waugh Drive, Suite 1000		77007
Houston, Texas		(Zip Code)
(Address of principal executive offices)

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))

Item 2.02.

Results of Operations and Financial Condition

On July 25, 2007, Kirby Corporation (“Kirby”) issued a press release announcing earnings for the three months and six months ended June 30, 2007. 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 2007 and 2006 second quarters and first six months is included in the press release.

Item 9.01.

Financial Statements and Exhibits

(c)

Exhibits:

99.1

Press release dated July 25, 2007

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.

		KIRBY CORPORATION
		(Registrant)

		By:	/s/ Norman W. Nolen
			Norman W. Nolen
			Executive Vice President, Treasurer and Chief Financial Officer

Dated: July 26, 2007

EXHIBIT INDEX

Exhibit 99.1

Press release dated July 25, 2007

ex99_1.htm

KIRBY CORPORATION	Contact:	Steve Holcomb
		713-435-1135

FOR IMMEDIATE RELEASE

KIRBY CORPORATION ANNOUNCES RECORD

RESULTS FOR THE 2007 SECOND QUARTER

·	2007 second quarter earnings per share were $.56, a 27% increase compared with $.44 earned in the 2006 second quarter

·	2007 first six months earnings per share were $1.02, a 17% increase compared with $.87 earned in the 2006 first six months

·	Purchased Saunders Engine and Equipment Company, Inc., a Gulf Coast high-speed diesel engine services provider, for approximately $13.2 million in cash

·	2007 third quarter earnings per share guidance is $.53 to $.58 versus $.48 earned in the 2006 third quarter

·	2007 year earnings per share guidance increased to $2.05 to $2.15 versus $1.79 earned in the 2006 year

Houston, Texas (July 25, 2007)– Kirby Corporation (“Kirby”) (NYSE:KEX) today announced record net earnings for the second quarter ended June 30, 2007 of $30,137,000, or $.56 per share, compared with net earnings of $23,643,000, or $.44 per share, for the 2006 second quarter. Kirby’s published earnings guidance range for the 2007 second quarter was $.48 to $.53 per share. Consolidated revenues for the 2007 second quarter were a record $288,008,000, an increase of 18% over $243,292,000 reported for the 2006 second quarter.

Kirby reported record net earnings for the 2007 first six months of $54,559,000, or $1.02 per share, compared with $46,154,000, or $.87 per share, for the first six months of 2006. Consolidated revenues for the 2007 first six months were a record $562,219,000, a 20% increase compared with $468,195,000 for the first half of 2006.

Marine transportation revenues and operating income for the 2007 second quarter increased 13% and 25%, respectively, compared with the second quarter of 2006. For the first six months of 2007, marine transportation revenues and operating income increased 12% and 18%, respectively, compared with the 2006 first six months. The higher results for both periods reflected continued strong petrochemical and black oil demand, fleet efficiency resulting from operating additional towboats, improvements in the current shortage of vessel personnel, and higher rates on contract renewals and spot market pricing. The 2007 second quarter also benefited from stronger seasonal agricultural chemical volumes. The marine transportation operating margin was a record 21.0% for 2007 second quarter compared with 18.9% for the 2006 second quarter.

The diesel engine services revenues and operating income for the 2007 second quarter increased 49% and 59%, respectively, compared with the 2006 second quarter. For the first six months of 2007, diesel engine services revenues and operating income increased 65% compared with the 2006 first half. The results for both 2007 periods reflected the accretive acquisitions of Global Power Holding Company on June 7, 2006 and Marine Engine Specialists, Inc. on July 21, 2006, both high-speed diesel engine service providers. The medium-speed diesel engine sector reflected its normal seasonal softness during the 2007 second quarter compared with the 2007 first quarter, which benefited from seasonal winter work for Midwest and Great Lakes marine customers; however, in-house and in-field service activity and direct parts sales remained brisk. The high-speed sector also remained strong during the 2007 second quarter, with the activity in the Gulf Coast oil service industry returning to lower but more normal levels. Both the medium and high-speed sectors benefited from continued high labor utilization, and higher service rates and parts pricing implemented during 2006 and in the 2007 first half. The diesel engine services operating margin for the 2007 second quarter was 16.0% compared with 15.0% for the 2006 second quarter.

On July 20, 2007, Kirby purchased substantially all of the assets of Saunders Engine and Equipment Company, Inc. (“Saunders”) for approximately $13.2 million in cash. Saunders, a Gulf Coast high-speed diesel engine services provider, operated factory-authorized full service marine dealerships for Cummins and Detroit Diesel engines, and served as an authorized marine dealer for Caterpillar engines in Alabama. Financing of the acquisition was through Kirby’s $250 million revolving credit facility.

Joe Pyne, Kirby’s President and Chief Executive Officer, commented, “Both our marine transportation and diesel engine services business fundamentals remained very strong in the 2007 first half. Our inland marine transportation segment remains essentially fully utilized, volumes remain strong, pricing continues to trend upward and we have made slow but steady progress in alleviating our towboat and vessel personnel shortage issues.”

Commenting on the 2007 third quarter market conditions and guidance, Mr. Pyne said, “We expect our marine transportation business levels to remain strong and anticipate contract and spot market rate increases consistent with the 2007 first half. We also expect our diesel engine services segment to remain strong, but we anticipate a summer slowdown that is typical for this segment. For the 2007 third quarter, our guidance is $.53 to $.58 per share, reflecting a 10% to 21% increase compared with $.48 per share reported for the 2006 third quarter. For the 2007 year, we are increasing our guidance to $2.05 to $2.15 per share, reflecting a 15% to 20% increase over the 2006 net earnings of $1.79 per share. We have increased our capital spending guidance for 2007 to $150 to $160 million, which includes approximately $75 million for the construction of 30 tank barges and seven towboats. Delivery is scheduled throughout 2007 and into early 2008.”

This earnings press release includes marine transportation performance measures for both the 2007 and 2006 second quarters and first six months. The performance measures include ton miles, revenue per ton mile, towboats operated and delay days. Comparable performance measures for the 2006 and 2005 years and quarters are available at Kirby’s web site under the caption Performance Measurements in the Investor Relations section. Kirby’s homepage can be accessed by visiting www.kirbycorp.com.

A conference call is scheduled at 10:00 a.m. central time tomorrow, Thursday, July 26, 2007, to discuss the 2007 second quarter and first six months, and the outlook for the 2007 third 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 approximately 1:00 p.m. central time on Thursday, July 26, through 6:00 p.m. central time on Friday, August 24, 2007, by dialing 800-642-1687 for domestic callers and 706-645-9291 for international callers. The conference ID number is 7173233. The conference call can also be accessed by visiting Kirby’s homepage at http://www.kirbycorp.com/ or at http://audioevent.mshow.com/334349/. A replay will be available on each of those web sites following the conference call.

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 for the 2007 and 2006 second quarters and first six months with GAAP net earnings for the same periods is included in the Condensed Consolidated Financial Information in this press release.

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, 2006 filed with the Securities and Exchange Commission.

CONFERENCE CALL INFORMATION
Date:	Thursday, July 26, 2007	Leader:	Steve Holcomb
Time:	10:00 a.m. central time	Conf. ID:	7173233
U.S.:	888-328-2514	Int’l:	706-679-3262
Website: http://www.kirbycorp.com/ or http://audioevent.mshow.com/334349/

A summary of the results for the second quarter and first six months follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Second Quarter						Six Months
	2007			2006 ⁽¹⁾			2007			2006 ⁽¹⁾
	(unaudited, $ in thousands except per share amounts)
Revenues:
Marine transportation	$	229,745		$	204,088		$	438,810		$	393,471
Diesel engine services		58,263			39,204			123,409			74,724
		288,008			243,292			562,219			468,195
Costs and expenses:
Costs of sales and operating expenses		180,608			157,094			356,207			301,584
Selling, general and administrative		29,468			26,518			59,974			50,279
Taxes, other than on income		3,255			3,403			6,389			6,590
Depreciation and amortization		20,280			15,515			39,867			30,605
Loss (gain) on disposition of assets		62			(785	)		561			(942	)
		233,673			201,745			462,998			388,116

Operating income		54,335			41,547			99,221			80,079
Equity in earnings of marine affiliates		105			87			203			553
Other expense		(160	)		(134	)		(408	)		(68	)
Interest expense		(5,436	)		(3,304	)		(10,590	)		(6,002	)

Earnings before taxes on income		48,844			38,196			88,426			74,562
Provision for taxes on income		(18,707	)		(14,553	)		(33,867	)		(28,408	)

Net earnings	$	30,137		$	23,643		$	54,559		$	46,154

Net earnings per share of common stock:
Basic	$	.57		$	.45		$	1.03		$	.88
Diluted	$	.56		$	.44		$	1.02		$	.87
Common stock outstanding (in thousands):
Basic		52,849			52,450			52,802			52,268
Diluted		53,731			53,411			53,662			53,208

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

	Second Quarter				Six Months
	2007		2006 ⁽¹⁾		2007		2006 ⁽¹⁾
	(unaudited, $ in thousands except per share amounts)
EBITDA: ⁽²⁾
Net earnings	$	30,137	$	23,643	$	54,559	$	46,154
Interest expense		5,436		3,304		10,590		6,002
Provision for taxes on income		18,707		14,553		33,867		28,408
Depreciation and amortization		20,280		15,515		39,867		30,605
	$	74,560	$	57,015	$	138,883	$	111,169

Capital expenditures	$	41,923	$	42,760	$	95,572	$	64,386
Acquisitions of businesses and marine equipment	$	2,075	$	100,533	$	49,392	$	116,773

	June 30,
	2007			2006
	(unaudited, $ in thousands)
Long-term debt, including current portion	$	383,653		$	285,434
Stockholders’ equity	$	695,521		$	606,288
Debt to capitalization ratio		35.6	%		32.0	%

MARINE TRANSPORTATION STATEMENTS OF EARNINGS

	Second Quarter						Six Months
	2007			2006 ⁽¹⁾			2007			2006 ⁽¹⁾
	(unaudited, $ in thousands)

Marine transportation revenues	$	229,745		$	204,088		$	438,810		$	393,471

Costs and expenses:
Costs of sales and operating expenses		139,237			129,006			268,067			248,089
Selling, general and administrative		20,391			18,777			40,871			36,939
Taxes, other than on income		3,003			3,133			5,881			6,144
Depreciation and amortization		18,945			14,673			37,261			28,971
		181,576			165,589			352,080			320,143

Operating income	$	48,169		$	38,499		$	86,730		$	73,328

Operating margins		21.0	%		18.9	%		19.8	%		18.6	%

DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS

	Second Quarter						Six Months
	2007			2006			2007			2006
	(unaudited, $ in thousands)

Diesel engine services revenues	$	58,263		$	39,204		$	123,409		$	74,724

Costs and expenses:
Costs of sales and operating expenses		41,371			28,078			88,140			53,485
Selling, general and administrative		6,412			4,640			13,722			8,562
Taxes, other than income		191			136			435			223
Depreciation and amortization		965			475			1,891			814
		48,939			33,329			104,188			63,084

Operating income	$	9,324		$	5,875		$	19,221		$	11,640

Operating margins		16.0	%		15.0	%		15.6	%		15.6	%

OTHER COSTS AND EXPENSES

	Second Quarter					Six Months
	2007		2006			2007		2006
	(unaudited, $ in thousands)

General corporate expenses	$	3,096	$	3,612		$	6,169	$	5,831
Loss (gain) on disposition of assets	$	62	$	(785	)	$	561	$	(942	)

MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS

	Second Quarter				Six Months
	2007		2006		2007		2006

Ton Miles (in millions) ⁽³⁾		4,380		4,096		8,157		7,891
Revenue/Ton Mile (cents/tm) ⁽⁴⁾		5.0		4.7		5.1		4.8
Towboats operated (average) ⁽⁵⁾		252		241		250		240
Delay Days ⁽⁶⁾		1,802		1,378		4,402		3,849
Average cost per gallon of fuel consumed	$	1.95	$	1.99	$	1.83	$	1.92
Tank barges:
Active						915		897
Inactive						50		62
Barrel capacities (in millions):
Active						17.4		16.7
Inactive						.9		1.2

⁽¹⁾

In the 2007 first quarter, Kirby adopted Financial Accounting Standards Board Staff Position No. AUG AIR-1, “Accounting for Planned Major Maintenance Activities.” The guidance prohibits the use of the accrue-in-advance method of accounting for planned major maintenance activities in interim and annual financial reporting periods because an obligation has not occurred and therefore a liability should not be recognized. The adoption resulted in the recast of Kirby’s prior years’ quarterly results, reducing the 2006 first quarter net earnings by $69,000, increasing the 2006 second quarter by $310,000 and increasing the 2006 first six months by $241,000. The recast reduced the 2006 first quarter diluted earnings per share by $.01 to $.42, had no impact on the 2006 second quarter diluted earnings per share and increased the 2006 first six months diluted earning per share by $.01 to $.87. The adoption had no impact on Kirby’s annual financial statements.

⁽²⁾

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.

⁽³⁾	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.

⁽⁴⁾	Inland marine transportation revenues divided by ton miles. Example: Second quarter 2007 inland marine revenues of $218,151,000 divided by 4,380,000,000 marine transportation ton miles = 5.0 cents.

⁽⁵⁾	Towboats operated are the average number of owned and chartered towboats operated during the period.

⁽⁶⁾	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.

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