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): January 30,
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
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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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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¨
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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
January 30, 2008, Kirby Corporation (“Kirby”) issued a press release announcing
earnings for the three months and year ended December 31, 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 fourth quarters and years
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 January 30, 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 and Chief Financial
Officer
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Dated: January
31, 2008
EXHIBIT
INDEX
Exhibit
99.1 Press release dated January
30, 2008
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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
2007
FOURTH QUARTER AND YEAR RESULTS
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·
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2007
fourth quarter earnings
per share were $.64, a 45% increase compared with $.44 earned in
the 2006
fourth quarter
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·
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2007
year earnings per share
were $2.29, a 28% increase compared with $1.79 earned in the 2006
year
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·
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2008
first quarter earnings per
share guidance is $.57 to $.62 versus $.46 earned in the 2007 first
quarter
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·
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2008
year earnings per share
guidance is $2.55 to $2.70 versus $2.29 earned in the 2007
year
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Houston,
Texas (January 30,
2008)– Kirby Corporation (“Kirby”) (NYSE:KEX) today announced record net
earnings for the fourth quarter ended December 31, 2007 of $34.4 million, or
$.64 per share, compared with net earnings of $23.4 million, or $.44 per share,
for the 2006 fourth quarter. Kirby’s initial published 2007 fourth
quarter earnings guidance range was $.57 to $.62 per share, which was revised
to
exceed $.62 per share on January 14. Consolidated revenues for the
2007 fourth quarter were a record $307.9 million, an increase of 22% over the
$251.4 million reported for the 2006 fourth quarter.
“The
record fourth quarter marked the 16th
consecutive quarter that our earnings exceeded the same quarter of the previous
year,” said Joe Pyne, Kirby’s President and Chief Executive
Officer. “Strong demand continued in all of the marine transportation
markets Kirby services. Our fleet of tank barges and towboats
remained essentially fully utilized and pricing for our services remained
consistent with the first nine months of 2007. We did experience an
increase in delay days and a corresponding decrease in efficiency caused by
typical poor operating conditions during the 2007 fourth quarter.”
Mr.
Pyne
further commented, “Our diesel engine services segment continued to experience
strong demand for service work and parts sales in our medium-speed markets,
with
some seasonal slowdown in demand in our high-speed service. The
segment continued to benefit from high labor utilization, higher service rates
and parts pricing implemented during 2006 and 2007, and from accretive
acquisitions completed during 2006 and 2007.”
Kirby
reported record net earnings for the 2007 year of $123.3 million, or $2.29
per
share, compared with $95.5 million, or $1.79 per share, for
2006. Consolidated revenues for the 2007 year were a record $1.17
billion, a 19% increase compared with $984.2 million for 2006.
Segment
Results – Marine Transportation
Marine
transportation revenues and operating income for the 2007 fourth quarter
increased 23% and 40%, respectively, compared with the fourth quarter of
2006. For the 2007 year, marine transportation revenues and operating
income increased 15% and 28%, respectively, compared with 2006. The
higher results for both 2007 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 21.8% for the 2007 fourth quarter compared
with 19.0% for the 2006 fourth quarter and 21.1% for the 2007 year compared
with
19.0% for 2006. The higher operating margins reflected the strong
demand, higher rates on contract renewals and spot market pricing, rate
escalators on a number of multi-year contracts and continued improvement in
vessel personnel and towboat availability, partially offset by increased delay
days caused by winter weather conditions and low water levels during 2007
compared with 2006 periods.
Segment
Results – Diesel Engine Services
The
diesel engine services revenues and operating income for the 2007 fourth quarter
increased 21% and 41%, respectively, compared with the 2006 fourth
quarter. For the 2007 year, diesel engine services revenues and
operating income increased 38% and 44% compared with 2006. 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 Engine and Equipment Company, Inc. in July 2007, all
high-speed diesel engine service companies. The diesel engine
services operating margin was 15.6% for the 2007 fourth quarter compared with
13.4% for the 2006 fourth quarter and 15.6% for the 2007 year compared with
14.9% for 2006. The diesel segment benefited from continued strong
markets, high labor utilization, higher service rates and parts pricing
implemented during 2006 and 2007, and from the accretive acquisitions noted
above.
Outlook
Commenting
on the 2008 first quarter and year, Mr. Pyne said, “We expect our marine
transportation business levels to remain strong and anticipate continued
favorable contract and spot market rate increases. Business levels in
our diesel engine services markets are anticipated to remain
strong. For the 2008 first quarter, our earnings guidance is $.57 to
$.62 per share compared with $.46 per share for the 2007 first
quarter. For the 2008 year, our guidance range is $2.55 to $2.70 per
share compared with 2007 net earnings of $2.29 per share. Our capital
spending guidance for 2008 is $150 to $160 million, which includes approximately
$80 million for the construction of new tank barges and
towboats.”
2
Conference
Call
A
conference call is scheduled at 10:00 a.m. central time tomorrow, Thursday,
January 31, 2008, to discuss the 2007 fourth quarter and year performance as
well as the outlook for the 2008 first 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, January 31, through 5:00 p.m. central time on Friday, February
29, by dialing 800-642-1687 for domestic and 706-645-9291 for international
callers. The conference ID number is 30012970. The
conference call can also be accessed by visiting Kirby’s website at http://www.kirbycorp.com/
or at http://audioevent.mshow.com/340885/. 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.
3
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CONDENSED
CONSOLIDATED STATEMENTS OF
EARNINGS
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||||||||||||||||
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Fourth
Quarter
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Year
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|||||||||||||||
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2007
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2006
(1)
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2007
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2006
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(unaudited,
$ in thousands except per share amounts)
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||||||||||||||||
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Revenues:
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Marine
transportation
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$ | 248,695 | $ | 202,665 | $ | 928,834 | $ | 807,216 | ||||||||
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Diesel
engine services
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59,155 | 48,746 | 243,791 | 177,002 | ||||||||||||
| 307,850 | 251,411 | 1,172,625 | 984,218 | |||||||||||||
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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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192,882 | 160,747 | 735,427 | 631,334 | ||||||||||||
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Selling,
general and administrative
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30,665 | 28,128 | 121,952 | 107,728 | ||||||||||||
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Taxes,
other than on income
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3,533 | 2,947 | 13,159 | 12,826 | ||||||||||||
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Depreciation
and amortization
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20,642 | 17,102 | 80,916 | 64,396 | ||||||||||||
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Loss
(gain) on disposition of assets
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(148 | ) | (239 | ) | 383 | (1,436 | ) | |||||||||
| 247,574 | 208,685 | 951,837 | 814,848 | |||||||||||||
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Operating
income
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60,276 | 42,726 | 220,788 | 169,370 | ||||||||||||
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Equity
in earnings of marine affiliates
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41 | 66 | 266 | 707 | ||||||||||||
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Other
expense
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(256 | ) | (217 | ) | (938 | ) | (674 | ) | ||||||||
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Interest
expense
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(4,458 | ) | (4,696 | ) | (20,284 | ) | (15,201 | ) | ||||||||
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Earnings
before taxes on income
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55,603 | 37,879 | 199,832 | 154,202 | ||||||||||||
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Provision
for taxes on income
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(21,251 | ) | (14,432 | ) | (76,491 | ) | (58,751 | ) | ||||||||
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Net
earnings
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$ | 34,352 | $ | 23,447 | $ | 123,341 | $ | 95,451 | ||||||||
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Net
earnings per share of common stock:
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||||||||||||||||
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Basic
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$ | .65 | $ | .45 | $ | 2.33 | $ | 1.82 | ||||||||
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Diluted
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$ | .64 | $ | .44 | $ | 2.29 | $ | 1.79 | ||||||||
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Common
stock outstanding (in thousands):
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||||||||||||||||
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Basic
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53,123 | 52,610 | 52,978 | 52,476 | ||||||||||||
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Diluted
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53,925 | 53,410 | 53,764 | 53,304 | ||||||||||||
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CONDENSED
CONSOLIDATED FINANCIAL
INFORMATION
|
||||||||||||||||
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Fourth
Quarter
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Year
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|||||||||||||||
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2007
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2006
(1)
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2007
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2006
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|||||||||||||
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(unaudited,
$ in thousands except per share amounts)
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EBITDA: (2)
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Net
earnings
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$ | 34,352 | $ | 23,447 | $ | 123,341 | $ | 95,451 | ||||||||
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Interest
expense
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4,458 | 4,696 | 20,284 | 15,201 | ||||||||||||
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Provision
for taxes on income
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21,251 | 14,432 | 76,491 | 58,751 | ||||||||||||
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Depreciation
and amortization
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20,642 | 17,102 | 80,916 | 64,396 | ||||||||||||
| $ | 80,703 | $ | 59,677 | $ | 301,032 | $ | 233,799 | |||||||||
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Capital
expenditures
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$ | 41,056 | $ | 29,015 | $ | 164,083 | $ | 139,129 | ||||||||
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Acquisitions
of businesses and marine equipment
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$ | 5,419 | $ | 4,486 | $ | 67,185 | $ | 143,911 | ||||||||
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December
31,
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||||||||
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2007
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2006
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|||||||
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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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$ | 297,383 | $ | 310,362 | ||||
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Stockholders’
equity
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$ | 769,830 | $ | 631,995 | ||||
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Debt
to capitalization ratio
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27.9 | % | 32.9 | % | ||||
4
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MARINE
TRANSPORTATION STATEMENTS OF
EARNINGS
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||||||||||||||||
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Fourth
Quarter
|
Year
|
|||||||||||||||
|
2007
|
2006
(1)
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2007
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2006
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|||||||||||||
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(unaudited,
$ in thousands)
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||||||||||||||||
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Marine
transportation revenues
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$ | 248,695 | $ | 202,665 | $ | 928,834 | $ | 807,216 | ||||||||
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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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151,470 | 126,069 | 562,769 | 506,353 | ||||||||||||
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Selling,
general and administrative
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20,658 | 19,320 | 82,454 | 75,326 | ||||||||||||
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Taxes,
other than on income
|
3,287 | 2,850 | 12,188 | 12,003 | ||||||||||||
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Depreciation
and amortization
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19,111 | 15,846 | 75,311 | 60,309 | ||||||||||||
| 194,526 | 164,085 | 732,722 | 653,991 | |||||||||||||
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Operating
income
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$ | 54,169 | $ | 38,580 | $ | 196,112 | $ | 153,225 | ||||||||
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Operating
margins
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21.8 | % | 19.0 | % | 21.1 | % | 19.0 | % | ||||||||
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DIESEL
ENGINE SERVICES STATEMENTS OF
EARNINGS
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||||||||||||||||
|
Fourth
Quarter
|
Year
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
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|||||||||||||
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(unaudited,
$ in thousands)
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||||||||||||||||
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Diesel
engine services revenues
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$ | 59,155 | $ | 48,746 | $ | 243,791 | $ | 177,002 | ||||||||
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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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41,412 | 34,678 | 172,658 | 124,971 | ||||||||||||
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Selling,
general and administrative
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7,116 | 6,515 | 28,196 | 22,665 | ||||||||||||
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Taxes,
other than income
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218 | 170 | 856 | 513 | ||||||||||||
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Depreciation
and amortization
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1,157 | 841 | 4,133 | 2,479 | ||||||||||||
| 49,903 | 42,204 | 205,843 | 150,628 | |||||||||||||
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Operating
income
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$ | 9,252 | $ | 6,542 | $ | 37,948 | $ | 26,374 | ||||||||
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Operating
margins
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15.6 | % | 13.4 | % | 15.6 | % | 14.9 | % | ||||||||
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OTHER
COSTS AND EXPENSES
|
||||||||||||||||
|
Fourth
Quarter
|
Year
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
(unaudited,
$ in thousands)
|
||||||||||||||||
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General
corporate expenses
|
$ | 3,293 | $ | 2,635 | $ | 12,889 | $ | 11,665 | ||||||||
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Loss
(gain) on disposition of assets
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$ | (148 | ) | $ | (239 | ) | $ | 383 | $ | (1,436 | ) | |||||
5
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MARINE
TRANSPORTATION PERFORMANCE
MEASUREMENTS
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||||||||||||||||
|
Fourth
Quarter
|
Year
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
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Ton
Miles (in millions) (3)
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4,206 | 3,713 | 16,716 | 15,649 | ||||||||||||
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Revenue/Ton
Mile (cents/tm) (4)
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5.7 | 5.2 | 5.3 | 4.9 | ||||||||||||
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Towboats
operated (average) (5)
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258 | 243 | 253 | 241 | ||||||||||||
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Delay
Days (6)
|
2,311 | 2,440 | 8,157 | 7,489 | ||||||||||||
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Average
cost per gallon of fuel consumed
|
$ | 2.49 | $ | 1.79 | $ | 2.10 | $ | 1.93 | ||||||||
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Tank
barges:
|
||||||||||||||||
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Active
|
913 | 904 | ||||||||||||||
|
Inactive
|
53 | 54 | ||||||||||||||
|
Barrel
capacities (in millions):
|
||||||||||||||||
|
Active
|
17.3 | 17.0 | ||||||||||||||
|
Inactive
|
.9 | 1.0 | ||||||||||||||
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(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 decreasing the fourth quarter 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 reduced the fourth quarter diluted earnings per share
by
$.01 per share. 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: Fourth
quarter 2007 inland marine revenues of $239,880,000 divided by
4,206,000,000 marine transportation ton miles = 5.7 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.
|
#
#
#
6