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 23,
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 July
23, 2008, Kirby Corporation (“Kirby”) issued a press release announcing earnings
for the three months and six months ended June 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 second quarters and first six
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
Press release dated July 23, 2008
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: July
24, 2008
EXHIBIT
INDEX
Exhibit 99.1 Press release dated July 23,
2008
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 SECOND QUARTER
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·
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2008 second quarter earnings
per share were $.74, a 32% increase compared with $.56 earned in the 2007
second quarter
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·
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2008 first six months earnings
per share were $1.42, a 39% increase compared with $1.02 earned in the
2007 first six months
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·
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2008 third quarter earnings per
share guidance is $.75 to $.80 versus $.64 earned in the 2007 third
quarter
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·
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2008 year earnings per share
guidance increased to $2.90 to $3.00 versus $2.29 earned in
2007
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Houston, Texas (July 23, 2008)
– Kirby Corporation (“Kirby”) (NYSE:KEX) today announced record net earnings for
the second quarter ended June 30, 2008 of $40.3 million, or $.74 per share,
compared with net earnings of $30.1 million, or $.56 per share, for the 2007
second quarter. Consolidated revenues for the 2008 second quarter
were a record $348.3 million, an increase of 21% over the $288.0 million
reported for the 2007 second quarter.
“Our
record second quarter results mark the 18th
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 segment’s results reflected
continued favorable demand in our petrochemical market, partially offset by high
Mississippi River water levels. Pricing for our transportation
services continued to trend upward. Our diesel engine services
segment’s results reflected continued strong demand in our medium-speed
markets.”
Kirby
reported record net earnings for the 2008 first six months of $77.0 million, or
$1.42 per share, compared with $54.6 million, or $1.02 per share, for the first
half of 2007. Consolidated revenues for the 2008 first six months
were a record $678.8 million, a 21% increase compared with $562.2 million for
the first six months of 2007.
1
Segment
Results
Marine
transportation revenues and operating income for the 2008 second quarter
increased 23% and 29%, respectively, compared with the second quarter of
2007. For the first six months of 2008, marine transportation
revenues and operating income increased 24% and 36%, respectively, compared with
the 2007 first six months. The higher second quarter results
reflected continued strong demand in Kirby’s petrochemical market, and although
Midwest demand for black oil and refined products movements was lower, the
equipment was either utilized in the Gulf Intracoastal Waterway or, in some
cases, retained by customers under time charter contracts. Operating
results during the quarter were negatively affected by the costs associated with
high water conditions on the Mississippi River. Second quarter 2008
ton miles decreased 15% when compared with the 2007 second quarter, due
primarily to slower transit times on the Mississippi River and changes in the
trip mix between the Mississippi River and the Gulf Intracoastal
Waterway. The marine transportation operating margin was 22.0% for
the 2008 second quarter compared with 21.0% for the 2007 second quarter and
21.7% for the 2008 first six months compared with 19.8% for the 2007 first
half. The improved operating margin for both comparable periods
reflected increased efficiencies from the continued improvement in vessel
crewing and the operation of additional towboats, higher term contract and spot
market pricing, the January 1, 2008 escalators on a number of multi-year
contracts and the increased percentage of time charters which protect revenues
from temporary market declines and weather and navigational delays.
The
diesel engine services revenues and operating income for the 2008 second quarter
increased 14% and 11%, respectively, compared with the 2007 second
quarter. For the first six months of 2008, diesel engine services
revenues and operating income increased 10% and 12%, respectively, compared with
the 2007 first six months. The higher results reflected continued
strong service activity and direct parts sales in the medium-speed markets,
offset somewhat by continued softness in the Gulf Coast oil services sector of
the high-speed market. The results also reflected the acquisition in
July 2007 of Saunders Engine and Equipment Company, Inc., a high-speed diesel
engine services provider. The diesel engine services operating margin
was 15.6% for the 2008 second quarter compared with 16.0% for the 2007 second
quarter and 15.8% for the 2008 first six months compared with 15.6% for the 2007
first half.
Acquisition
On June
30, 2008, Kirby purchased substantially all of the assets of Lake Charles
Diesel, Inc. (“Lake Charles Diesel”) for $3,334,000 in cash. Lake
Charles Diesel is a Gulf Coast high-speed diesel engine services provider
operating factory-authorized full service marine dealerships for Cummins,
Detroit Diesel and Volvo engines, as well as an authorized marine dealer for
Caterpillar engines in Louisiana.
Outlook
Commenting
on the 2008 third quarter market conditions and guidance, Mr. Pyne said, “We
expect our marine transportation business levels to remain similar to the second
quarter; however, we anticipate better operating conditions and an improvement
in refined products demand into the Midwest. Business levels in our
diesel engine services markets are also anticipated to remain favorable, with
some improvement in the oil services market as Gulf Coast offshore drilling
increases. For the 2008 third quarter, our earnings guidance is $.75
to $.80 per share, reflecting a 17% to 25% increase compared with $.64 per share
for the 2007 third quarter. For the 2008 year, we are increasing our
earnings guidance to $2.90 to $3.00 per share, reflecting a 27% to 31% increase
over the net earnings for the 2007 year of $2.29 per share. We are
increasing our capital spending guidance range for 2008 to $165 to $175 million,
which includes approximately $90 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, July
24 2008, to discuss the 2008 second quarter performance as well as the outlook
for the 2008 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 1:00 p.m. central time on Thursday, July 24,
through 6:00 p.m. central time on Friday, August 22, by dialing 800-642-1687 for
domestic and 706-645-9291 for international callers. The conference
ID number is 55357145. The conference call can also be accessed by
visiting Kirby’s homepage at http://www.kirbycorp.com/
or at http://audioevent.mshow.com/345811/. 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 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.
3
A summary
of the results for the second quarter and first six months follows:
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
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Second Quarter
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Six 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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|||||||||||||
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(unaudited,
$ in thousands except per share amounts)
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||||||||||||||||
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Revenues:
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||||||||||||||||
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Marine
transportation
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$ | 281,906 | $ | 229,745 | $ | 543,134 | $ | 438,810 | ||||||||
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Diesel
engine services
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66,354 | 58,263 | 135,696 | 123,409 | ||||||||||||
| 348,260 | 288,008 | 678,830 | 562,219 | |||||||||||||
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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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220,259 | 180,608 | 428,605 | 356,207 | ||||||||||||
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Selling,
general and administrative
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33,451 | 29,468 | 66,323 | 59,974 | ||||||||||||
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Taxes,
other than on income
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3,455 | 3,255 | 6,988 | 6,389 | ||||||||||||
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Depreciation
and amortization
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22,385 | 20,280 | 44,712 | 39,867 | ||||||||||||
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Loss
(gain) on disposition of assets
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(500 | ) | 62 | (442 | ) | 561 | ||||||||||
| 279,050 | 233,673 | 546,186 | 462,998 | |||||||||||||
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Operating
income
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69,210 | 54,335 | 132,644 | 99,221 | ||||||||||||
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Other
expense
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(329 | ) | (55 | ) | (586 | ) | (205 | ) | ||||||||
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Interest
expense
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(3,508 | ) | (5,436 | ) | (7,290 | ) | (10,590 | ) | ||||||||
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Earnings
before taxes on income
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65,373 | 48,844 | 124,768 | 88,426 | ||||||||||||
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Provision
for taxes on income
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(25,039 | ) | (18,707 | ) | (47,787 | ) | (33,867 | ) | ||||||||
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Net
earnings
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$ | 40,334 | $ | 30,137 | $ | 76,981 | $ | 54,559 | ||||||||
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Net
earnings per share of common stock:
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||||||||||||||||
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Basic
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$ | .75 | $ | .57 | $ | 1.44 | $ | 1.03 | ||||||||
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Diluted
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$ | .74 | $ | .56 | $ | 1.42 | $ | 1.02 | ||||||||
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Common
stock outstanding (in thousands):
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||||||||||||||||
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Basic
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53,483 | 52,849 | 53,377 | 52,802 | ||||||||||||
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Diluted
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54,281 | 53,731 | 54,169 | 53,662 | ||||||||||||
CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
|
Second Quarter
|
Six 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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|||||||||||||
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(unaudited,
$ in thousands)
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||||||||||||||||
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EBITDA: (1)
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Net
earnings
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$ | 40,334 | $ | 30,137 | $ | 76,981 | $ | 54,559 | ||||||||
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Interest
expense
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3,508 | 5,436 | 7,290 | 10,590 | ||||||||||||
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Provision
for taxes on income
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25,039 | 18,707 | 47,787 | 33,867 | ||||||||||||
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Depreciation
and amortization
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22,385 | 20,280 | 44,712 | 39,867 | ||||||||||||
| $ | 91,266 | $ | 74,560 | $ | 176,770 | $ | 138,883 | |||||||||
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Capital
expenditures
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$ | 57,758 | $ | 41,923 | $ | 106,511 | $ | 95,572 | ||||||||
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Acquisitions
of businesses and marine equipment
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$ | 3,334 | $ | 2,075 | $ | 5,134 | $ | 49,392 | ||||||||
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June 30,
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||||||||
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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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$ | 298,889 | $ | 383,653 | ||||
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Stockholders’
equity
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$ | 864,542 | $ | 695,521 | ||||
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Debt
to capitalization ratio
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25.7 | % | 35.6 | % | ||||
4
MARINE TRANSPORTATION
STATEMENTS OF EARNINGS
|
Second Quarter
|
Six 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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|||||||||||||
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(unaudited,
$ in thousands)
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||||||||||||||||
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Marine
transportation revenues
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$ | 281,906 | $ | 229,745 | $ | 543,134 | $ | 438,810 | ||||||||
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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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174,185 | 139,237 | 333,834 | 268,067 | ||||||||||||
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Selling,
general and administrative
|
21,597 | 20,391 | 43,905 | 40,871 | ||||||||||||
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Taxes,
other than on income
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3,188 | 3,003 | 6,423 | 5,881 | ||||||||||||
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Depreciation
and amortization
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20,782 | 18,945 | 41,302 | 37,261 | ||||||||||||
| 219,752 | 181,576 | 425,464 | 352,080 | |||||||||||||
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Operating
income
|
$ | 62,154 | $ | 48,169 | $ | 117,670 | $ | 86,730 | ||||||||
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Operating
margins
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22.0 | % | 21.0 | % | 21.7 | % | 19.8 | % | ||||||||
DIESEL ENGINE SERVICES
STATEMENTS OF EARNINGS
|
Second Quarter
|
Six 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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|||||||||||||
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(unaudited,
$ in thousands)
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||||||||||||||||
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Diesel
engine services revenues
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$ | 66,354 | $ | 58,263 | $ | 135,696 | $ | 123,409 | ||||||||
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Costs
and expenses:
|
||||||||||||||||
|
Costs
of sales and operating expenses
|
46,074 | 41,371 | 94,771 | 88,140 | ||||||||||||
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Selling,
general and administrative
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8,510 | 6,412 | 16,342 | 13,722 | ||||||||||||
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Taxes,
other than income
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254 | 191 | 528 | 435 | ||||||||||||
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Depreciation
and amortization
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1,160 | 965 | 2,594 | 1,891 | ||||||||||||
| 55,998 | 48,939 | 114,235 | 104,188 | |||||||||||||
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Operating
income
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$ | 10,356 | $ | 9,324 | $ | 21,461 | $ | 19,221 | ||||||||
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Operating
margins
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15.6 | % | 16.0 | % | 15.8 | % | 15.6 | % | ||||||||
OTHER COSTS AND
EXPENSES
|
Second Quarter
|
Six Months
|
|||||||||||||||
|
2008
|
2007
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2008
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2007
|
|||||||||||||
|
(unaudited,
$ in thousands)
|
||||||||||||||||
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General
corporate expenses
|
$ | 3,800 | $ | 3,096 | $ | 6,929 | $ | 6,169 | ||||||||
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Loss
(gain) on disposition of assets
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$ | (500 | ) | $ | 62 | $ | (442 | ) | $ | 561 | ||||||
5
MARINE TRANSPORTATION
PERFORMANCE MEASUREMENTS
|
Second Quarter
|
Six Months
|
|||||||||||||||
|
2008
|
2007
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2008
|
2007
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|||||||||||||
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Ton
Miles (in millions) (2)
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3,710 | 4,380 | 7,516 | 8,157 | ||||||||||||
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Revenue/Ton
Mile (cents/tm) (3)
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7.2 | 5.0 | 6.9 | 5.1 | ||||||||||||
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Towboats
operated (average) (4)
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259 | 252 | 259 | 250 | ||||||||||||
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Delay
Days (5)(5)
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1,914 | 1,802 | 4,912 | 4,402 | ||||||||||||
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Average
cost per gallon of fuel consumed
|
$ | 3.56 | $ | 1.95 | $ | 3.13 | $ | 1.83 | ||||||||
|
Tank
barges:
|
||||||||||||||||
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Active
|
918 | 915 | ||||||||||||||
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Inactive
|
65 | 50 | ||||||||||||||
|
Barrel
capacities (in millions):
|
||||||||||||||||
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Active
|
17.5 | 17.4 | ||||||||||||||
|
Inactive
|
1.2 | .9 | ||||||||||||||
|
|
(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.
|
|
|
(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.
|
|
|
(3)
|
Inland
marine transportation revenues divided by ton
miles. Example: Second quarter 2008 inland marine
revenues of $268,666,000 divided by 3,710,000,000 marine transportation
ton miles = 7.2 cents.
|
|
|
(4)
|
Towboats
operated are the average number of owned and chartered towboats operated
during the period.
|
|
|
(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.
|
6