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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): October 24, 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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 October 24, 2007, Kirby Corporation (“Kirby”) issued a press release announcing earnings for the three months and nine months ended September 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 third quarters and first nine months is included in the press release.

Item 9.01.

Financial Statements and Exhibits

(c)

Exhibits:

99.1 Press release dated October 24, 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: October 25, 2007

EXHIBIT INDEX

Exhibit 99.1 Press release dated October 24, 2007

ex99_1.htm

Exhibit 99.1

KIRBY CORPORATION	Contact: Steve Holcomb
	713-435-1135

FOR IMMEDIATE RELEASE

KIRBY CORPORATION ANNOUNCES RECORD

RESULTS FOR THE 2007 THIRD QUARTER

·	2007 third quarter earnings per share were $.64, a 33% increase compared with $.48 earned in the 2006 third quarter

·	2007 first nine months earnings per share were $1.66, a 23% increase compared with $1.35 earned in the 2006 first nine months

·	2007 fourth quarter earnings per share guidance is $.57 to $.62 versus $.44 earned in the 2006 fourth quarter

·	2007 year earnings per share guidance increased to $2.23 to $2.28 versus $1.79 earned in the 2006 year

Houston, Texas (October 24, 2007)– Kirby Corporation (“Kirby”) (NYSE:KEX) today announced record net earnings for the third quarter ended September 30, 2007 of $34.4 million, or $.64 per share, compared with net earnings of $25.9 million, or $.48 per share, for the 2006 third quarter. Kirby’s initial published 2007 third quarter earnings guidance range was $.53 to $.58 per share, which was revised to exceed $.60 per share on September 24. Consolidated revenues for the 2007 third quarter were a record $302.6 million, an increase of 14% over the $264.6 million reported for the 2006 third quarter.

“Our record third quarter results mark the 15^th consecutive quarter that our earnings exceeded the same quarter of the previous year,” said Joe Pyne, Kirby’s President and Chief Executive Officer. “Our marine transportation demand fundamentals remain the best we have seen since the early 1980s, with our fleet of tank barges and towboats essentially fully utilized. Pricing for our services continues to trend upward. Our diesel engine services segment continues to benefit from strong service activity and direct parts sales in the majority of its markets, as well as from the accretive acquisitions during 2006 and 2007, including the acquisition of Saunders Engine and Equipment Company, Inc. (“Saunders”) on July 20, 2007 for $12.4 million in cash, subject to working capital adjustments.”

Kirby reported record net earnings for the 2007 first nine months of $89.0 million, or $1.66 per share, compared with $72.0 million, or $1.35 per share, for the first nine months of 2006. Consolidated revenues for the 2007 first nine months were a record $864.8 million, an 18% increase compared with $732.8 million for the first nine months of 2006.

Segment Results

Marine transportation revenues and operating income for the 2007 third quarter increased 14% and 34%, respectively, compared with the third quarter of 2006. For the first nine months of 2007, marine transportation revenues and operating income increased 13% and 24% compared with the 2006 first nine months. The higher results for both periods reflected continued strong demand in all of Kirby’s transportation markets: petrochemical, black oil, refined products and agricultural chemicals. The marine transportation operating margin was a record 22.9% for the 2007 third quarter compared with 19.6% for the 2006 third quarter. The improved operating margin reflected the strong demand, higher rates on contract renewals and spot market pricing, continued improvements in the current shortage of vessel personnel and towboats, and better weather conditions.

The diesel engine services revenues and operating income for the 2007 third quarter increased 14% and 16%, respectively, compared with the 2006 third quarter. For the first nine months of 2007, diesel engine services revenues and operating income increased 44% and 45% compared with the 2006 first nine months. The results for both 2007 periods reflected the accretive acquisitions of Global Power Holding Company in June 2006, Marine Engine Specialists, Inc. in July 2006, and Saunders in July 2007, all high-speed diesel engine service companies. The diesel engine services operating margin was 15.5% for the 2007 third quarter compared with 15.3% for the 2006 third quarter, benefiting from continued strong markets, high labor utilization, and higher service rates and parts pricing implemented during 2006 and the 2007 first nine months.

Outlook

Commenting on the 2007 fourth 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 to be consistent with the first nine months of 2007. We anticipate that some deterioration in operating conditions caused by winter weather will increase delay days and decrease efficiency. Business levels in our diesel engine services markets remain strong as we enter the fourth quarter. For the 2007 fourth quarter, our earnings guidance is $.57 to $.62 per share, reflecting a 30% to 41% increase compared with $.44 per share for the 2006 fourth quarter. For the 2007 year, we are increasing our earnings guidance to $2.23 to $2.28 per share, reflecting a 25% to 27% increase over the 2006 net earnings of $1.79 per share. Our capital spending guidance for 2007 is $150 to $160 million, which includes approximately $67 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 25, 2007, to discuss the 2007 third quarter performance as well as the outlook for the 2007 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 25, through 6:00 p.m. central time on Friday, November 23, by dialing 800-642-1687 for domestic and 706-645-9291 for international callers. The conference ID number is 19773950. The conference call can also be accessed by visiting Kirby’s homepage at http://www.kirbycorp.com/ or at http://audioevent.mshow.com/337749/. 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 with GAAP net earnings 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 2006 and 2005 years and quarters are available at Kirby’s web site, 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, 2006 filed with the Securities and Exchange Commission.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Third Quarter						Nine Months
	2007			2006 ⁽¹⁾			2007			2006 ⁽¹⁾
	(unaudited, $ in thousands except per share amounts)
Revenues:
Marine transportation	$	241,329		$	211,080		$	680,139		$	604,551
Diesel engine services		61,227			53,532			184,636			128,256
		302,556			264,612			864,775			732,807
Costs and expenses:
Costs of sales and operating expenses		186,338			169,003			542,545			470,587
Selling, general and administrative		31,313			29,321			91,287			79,600
Taxes, other than on income		3,237			3,289			9,626			9,879
Depreciation and amortization		20,407			16,689			60,274			47,294
Loss (gain) on disposition of assets		(30	)		(255	)		531			(1,197	)
		241,265			218,047			704,263			606,163

Operating income		61,291			46,565			160,512			126,644
Equity in earnings of marine affiliates		22			88			225			641
Other expense		(274	)		(389	)		(682	)		(457	)
Interest expense		(5,236	)		(4,503	)		(15,826	)		(10,505	)

Earnings before taxes on income		55,803			41,761			144,229			116,323
Provision for taxes on income		(21,373	)		(15,911	)		(55,240	)		(44,319	)

Net earnings	$	34,430		$	25,850		$	88,989		$	72,004

Net earnings per share of common stock:
Basic	$	.65		$	.49		$	1.68		$	1.37
Diluted	$	.64		$	.48		$	1.66		$	1.35
Common stock outstanding (in thousands):
Basic		52,983			52,587			52,892			52,400
Diluted		53,802			53,392			53,709			53,269

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

	Third Quarter				Nine Months
	2007		2006 ⁽¹⁾		2007			2006 ⁽¹⁾
	(unaudited, $ in thousands except per share amounts)
EBITDA: ⁽²⁾
Net earnings	$	34,430	$	25,850	$	88,989		$	72,004
Interest expense		5,236		4,503		15,826			10,505
Provision for taxes on income		21,373		15,911		55,240			44,319
Depreciation and amortization		20,407		16,689		60,274			47,294
	$	81,446	$	62,953	$	220,329		$	174,122

Capital expenditures	$	27,455	$	45,728	$	123,027		$	110,114
Acquisitions of businesses and marine equipment	$	12,374	$	22,652	$	61,766		$	139,425

					September 30,
					2007			2006 ⁽¹⁾
					(unaudited, $ in thousands)
Long-term debt, including current portion					$	333,732		$	326,810
Stockholders’ equity					$	732,241		$	627,720
Debt to capitalization ratio						31.3	%		34.2	%

MARINE TRANSPORTATION STATEMENTS OF EARNINGS

	Third Quarter						Nine Months
	2007			2006 ⁽¹⁾			2007			2006 ⁽¹⁾
	(unaudited, $ in thousands)

Marine transportation revenues	$	241,329		$	211,080		$	680,139		$	604,551

Costs and expenses:
Costs of sales and operating expenses		143,232			132,195			411,299			380,284
Selling, general and administrative		20,925			19,067			61,796			56,006
Taxes, other than on income		3,020			3,009			8,901			9,153
Depreciation and amortization		18,939			15,492			56,200			44,463
		186,116			169,763			538,196			489,906

Operating income	$	55,213		$	41,317		$	141,943		$	114,645

Operating margins		22.9	%		19.6	%		20.9	%		19.0	%

DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS

	Third Quarter						Nine Months
	2007			2006			2007			2006
	(unaudited, $ in thousands)

Diesel engine services revenues	$	61,227		$	53,532		$	184,636		$	128,256

Costs and expenses:
Costs of sales and operating expenses		43,106			36,808			131,246			90,293
Selling, general and administrative		7,358			7,588			21,080			16,150
Taxes, other than income		203			120			638			343
Depreciation and amortization		1,085			824			2,976			1,638
		51,752			45,340			155,940			108,424

Operating income	$	9,475		$	8,192		$	28,696		$	19,832

Operating margins		15.5	%		15.3	%		15.5	%		15.5	%

OTHER COSTS AND EXPENSES

	Third Quarter						Nine Months
	2007			2006			2007		2006
	(unaudited, $ in thousands)

General corporate expenses	$	3,427		$	3,199		$	9,596	$	9,030
Loss (gain) on disposition of assets	$	(30	)	$	(255	)	$	531	$	(1,197	)

MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS

	Third Quarter				Nine Months
	2007		2006		2007		2006

Ton Miles (in millions) ⁽³⁾		4,353		4,045		12,510		11,936
Revenue/Ton Mile (cents/tm) ⁽⁴⁾		5.3		5.0		5.2		4.8
Towboats operated (average) ⁽⁵⁾		255		242		252		241
Delay Days ⁽⁶⁾		1,444		1,200		5,846		5,049
Average cost per gallon of fuel consumed	$	2.21	$	2.08	$	1.96	$	1.97
Tank barges:
Active						913		903
Inactive						49		53
Barrel capacities (in millions):
Active						17.3		17.0
Inactive						.9		1.0

⁽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 2006 quarterly results, reducing the first quarter net earnings by $69,000, increasing the second quarter by $310,000, increasing the third quarter by $250,000 and increasing the first nine months by $491,000. The recast reduced the 2006 first quarter diluted earnings per share by $.01 to $.42, had no impact on the second and third quarter diluted earnings per share, and increased the 2006 first nine months diluted earning per share by $.01 to $1.35. 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: Third quarter 2007 inland marine revenues of $230,615,000 divided by 4,353,000,000 marine transportation ton miles = 5.3 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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