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 28,
2009
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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|
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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:
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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
October 28, 2009 Kirby Corporation (“Kirby”) issued a press release announcing
net earnings attributable to Kirby for the three months and nine months ended
September 30, 2009. 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 attributable to Kirby 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 attributable to Kirby for the 2009 and 2008 third
quarters and first nine months is included in the press release.
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Item
9.01.
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Financial
Statements and Exhibits
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(c)
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Exhibits:
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99.1
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Press
release dated October 28, 2009
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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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|||
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(Registrant)
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|||
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By:
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/s/ Norman W. Nolen
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||
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Norman
W. Nolen
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|||
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Executive
Vice President, Treasurer
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and
Chief Financial Officer
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Dated: October
29, 2009
EXHIBIT
INDEX
Exhibit 99.1 Press release dated October
28, 2009
Exhibit 99.1
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KIRBY
CORPORATION
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Contact: Steve
Holcomb
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713-435-1135
FOR IMMEDIATE
RELEASE
KIRBY
CORPORATION ANNOUNCES 2009 THIRD QUARTER RESULTS
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·
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2009 third quarter earnings per
share were $.65 compared with $.77 earned in the 2008 third
quarter
|
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·
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2009 fourth quarter earnings
per share guidance is $.57 to $.62 versus $.72 earned in the 2008 fourth
quarter
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·
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2009 year earnings per share
guidance revised to $2.37 to $2.42 versus $2.91 earned in
2008
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Houston, Texas (October 28,
2009) – Kirby Corporation (“Kirby”) (NYSE:KEX) today announced net
earnings for the third quarter ended September 30, 2009 of $35.0 million, or
$.65 per share, compared with net earnings of $41.8 million, or $.77 per share,
for the 2008 third quarter which included the impact of Hurricanes Gustav and
Ike. Kirby’s published 2009 third quarter guidance range was $.62 to
$.67 per share. Consolidated revenues for the 2009 third quarter were
$272.2 million compared with $354.6 million reported for the 2008 third
quarter.
Joe Pyne,
Kirby’s President and Chief Executive Officer, commented, “Despite a challenging
economic environment, Kirby was able to perform well during the third
quarter. While demand remained below prior year levels, we continued
to see some improvement in Midwest petrochemical demand, driven by inventory
rebuilding, and stable demand in the majority of our other
markets. Unfortunately, lower industry barge utilization has kept
pressure on barging rates and our revenues and operating results remain below
prior year levels. Our diesel engine services segment’s marine and
railroad service levels and direct parts sales were all under prior year levels
due to weak transportation and offshore oil services markets, which encourage
our customers to defer maintenance when they can. We intend to
continue aggressively pursuing costs which can be removed from our businesses
while remaining focused on our service levels and safety
performance.”
Kirby
reported net earnings for the 2009 first nine months of $96.7 million, or $1.79
per share, compared with $118.8 million, or $2.19 per share, for the first nine
months of 2008. Consolidated revenues for the 2009 first nine months
were $822.6 million compared with $1.03 billion for the first nine months of
2008.
Segment
Results – Marine Transportation
Marine
transportation revenues and operating income for the 2009 third quarter
decreased 21% and 11%, respectively, compared with the 2008 third quarter, a
reflection of reduced demand across all four marine transportation markets,
lower pricing, and lower diesel fuel costs associated with the pass through of
diesel fuel to customers through fuel escalation and de-escalation clauses in
term contracts. Operating conditions were favorable for the quarter
with a 52% reduction in delay days when compared with the 2008 third quarter,
which included delay days from Hurricanes Gustav and Ike.
1
Petrochemical
demand of more finished products into the Midwest continued to modestly improve
and demand along the Gulf Coast stabilized when compared with the 2009 first
half. Black oil and refined products demand was stable, but remained
well below prior year levels. Agricultural chemical demand also
remained weak as the fall Midwest inventory fill was well below prior year
levels. The number of time charters, or day rate contracts, continued
to decline during the quarter as customers returned equipment they did not need
or became comfortable that their requirements could be filled in the spot
market.
The
segment continued to downsize its towboat fleet during the 2009 third quarter,
operating an average of 215 towboats compared with 255 operated during the 2008
third quarter, releasing chartered towboats and laying up Kirby owned towboats
to balance its horsepower requirements with volume demand. Going
forward, Kirby will continue to monitor its towboat requirements and downsize or
increase its towboat fleet as market changes warrant.
The
marine transportation operating margin improved to 25.3% for the 2009 third
quarter compared with 22.7% for the 2008 third quarter. The higher
operating margin reflected lower fuel costs, the positive impact of the 2009
first quarter early retirements and staff reductions, more efficient operations
at lower utilization rates, a continued reduction of the number of charter and
Kirby owned towboats operated, lower insurance claim losses, and better weather
and operating conditions compared with the 2008 corresponding
period.
Segment
Results – Diesel Engine Services
The
diesel engine services operating income for the 2009 third quarter was $4.6
million, a 56% decrease compared with the 2008 third quarter and revenues were
$44.7 million, a 34% decrease compared with the third quarter of
2008. Demand levels for service and direct parts sales across all
segments of the marine transportation and offshore oil services markets was
lower as offshore and inland marine customers continued to defer maintenance on
equipment in response to the economic slowdown. The industrial and
shortline railroad market also remained weak as customers deferred maintenance
due to a decline in railroad traffic. The medium-speed power
generation market was also below prior year levels. The operating
margin was 10.4% for the 2009 third quarter compared with 15.7% for the 2008
third quarter.
Cash
Flow
Kirby
continued to generate strong cash flow during the 2009 first nine
months. The cash flow was used to fund capital expenditures of $163.0
million, including $121.8 million for new tank barge and towboat construction
and $41.2 million for upgrades to the existing fleet, and to reduce debt by
$46.9 million. Total debt as of September 30, 2009 was $200.4 million
and the debt-to-capitalization ratio was 16.6%, down from 21.7% at December 31,
2008 and 23.2% at September 30, 2008. Cash and cash equivalents at
September 30, 2009 was $39.8 million compared with $8.6 million at December 31,
2008.
2
Tank
Barge and Towboat Construction – 2009 and 2010 Years
During
the first nine months of 2009, Kirby took delivery of 37 new tank barges and
seven new chartered barges with a total capacity of 974,000
barrels. Also, during this period Kirby took delivery of three 1800
horsepower towboats. During the fourth quarter, Kirby anticipates the
delivery of nine tank barges and one towboat. Kirby’s 2009 capital
spending guidance range is $185 to $195 million, including approximately $140
million for new tank barge and towboat construction.
For 2010,
Kirby plans to take advantage of attractive construction prices for tank barges
and build fifty 10,000 barrel and five 30,000 barrel tank barges. In
early 2010, Kirby will take delivery of three tank barges that were delayed from
2009 and three towboats. New construction cost for 2010 is anticipated to total
approximately $60 million. Kirby anticipates it will retire
approximately 90 barges during 2009 and for 2010, based on current market
demand, anticipates that retirements will exceed new construction
capacity. Kirby will continue to review its overall capacity levels
and make adjustments as the markets dictate.
Outlook
Commenting
on the 2009 fourth quarter market conditions and guidance, Mr. Pyne said, “For
the 2009 fourth quarter, our earnings guidance is $.57 to $.62 per share
compared with $.72 per share for the 2008 fourth quarter. For the
2009 year, we are lowering our guidance to $2.37 to $2.42 per share compared
with net earnings for the 2008 year of $2.91 per share. Our fourth
quarter guidance reflects continued pressure on barge transportation rates and
an increase in weather delay days associated with the fall and early winter
season. We anticipate our diesel engine services business will
continue to face challenges for the balance of 2009 as customers continue to
defer maintenance due to reduced utilization of their equipment; however, we do
believe we are near the bottom of this market and look for improved market
conditions in 2010. Additionally, our petrochemical and refining
customers appear to be more optimistic in their 2010 outlook.”
Conference
Call
A
conference call is scheduled at 10:00 a.m. central time tomorrow, Thursday,
October 29, 2009, to discuss the 2009 third quarter performance as well as the
outlook for the 2009 fourth quarter and year. The conference call
number is 800-446-2782 for domestic callers and 847-413-3235 for international
callers. The leader’s name is Steve Holcomb. The
confirmation number is 25615043. An audio playback will be available
at 1:00 p.m. central time on Thursday, October 29, through 6:00 p.m. central
time on Friday, November 27, 2009 by dialing 888-843-8996 for domestic and
630-652-3044 for international callers. A live audio webcast of the
conference call will be available to the public and a replay available after by
call by visiting Kirby’s website at http://www.kirbycorp.com/.
GAAP
to Non-GAAP Financial Measures
The
financial and other information to be discussed in the conference call is
available in this press release and in a Form 8-K filed with the Securities and
Exchange Commission. This press release and the Form 8-K include a
non-GAAP financial measure, EBITDA, which Kirby defines as net earnings
attributable to Kirby before interest expense, taxes on income, depreciation and
amortization. A reconciliation of EBITDA with GAAP net earnings
attributable to Kirby 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 2008 and 2007 years and
quarters are available at Kirby’s web site, http://www.kirbycorp.com/,
under the caption Performance Measurements in the Investor Relations
section.
3
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, 2008
filed with the Securities and Exchange Commission.
4
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
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Third Quarter
|
Nine Months
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|||||||||||||||
|
2009
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2008
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2009
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2008
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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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$ | 227,467 | $ | 286,880 | $ | 664,394 | $ | 830,014 | ||||||||
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Diesel
engine services
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44,699 | 67,767 | 158,176 | 203,463 | ||||||||||||
| 272,166 | 354,647 | 822,570 | 1,033,477 | |||||||||||||
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Costs
and expenses:
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||||||||||||||||
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Costs
of sales and operating expenses
|
157,186 | 220,875 | 486,990 | 649,480 | ||||||||||||
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Selling,
general and administrative
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27,949 | 36,026 | 91,493 | 102,349 | ||||||||||||
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Taxes,
other than on income
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2,989 | 3,560 | 9,267 | 10,548 | ||||||||||||
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Depreciation
and amortization
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24,929 | 22,420 | 69,724 | 67,132 | ||||||||||||
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Loss
(gain) on disposition of assets
|
(753 | ) | 166 | (1,117 | ) | (276 | ) | |||||||||
| 212,300 | 283,047 | 656,357 | 829,233 | |||||||||||||
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Operating
income
|
59,866 | 71,600 | 166,213 | 204,244 | ||||||||||||
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Other
income (expense)
|
189 | (164 | ) | 375 | (272 | ) | ||||||||||
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Interest
expense
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(2,781 | ) | (3,375 | ) | (8,387 | ) | (10,665 | ) | ||||||||
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Earnings
before taxes on income
|
57,274 | 68,061 | 158,201 | 193,307 | ||||||||||||
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Provision
for taxes on income
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(21,826 | ) | (25,932 | ) | (60,304 | ) | (73,719 | ) | ||||||||
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Net
earnings
|
35,448 | 42,129 | 97,897 | 119,588 | ||||||||||||
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Less:
Net earnings attributable to noncontrolling interests
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(434 | ) | (351 | ) | (1,158 | ) | (829 | ) | ||||||||
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Net
earnings attributable to Kirby
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$ | 35,014 | $ | 41,778 | $ | 96,739 | $ | 118,759 | ||||||||
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Net
earnings per share attributable to Kirby common stockholders:
(1)
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||||||||||||||||
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Basic
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$ | .65 | $ | .77 | $ | 1.80 | $ | 2.21 | ||||||||
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Diluted
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$ | .65 | $ | .77 | $ | 1.79 | $ | 2.19 | ||||||||
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Common
stock outstanding (in thousands):
(1)
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||||||||||||||||
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Basic
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53,215 | 53,448 | 53,175 | 53,342 | ||||||||||||
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Diluted
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53,337 | 53,688 | 53,296 | 53,672 | ||||||||||||
CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
|
Third Quarter
|
Nine Months
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(unaudited,
$ in thousands)
|
||||||||||||||||
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EBITDA: (2)
|
||||||||||||||||
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Net
earnings attributable to Kirby
|
$ | 35,014 | $ | 41,778 | $ | 96,739 | $ | 118,759 | ||||||||
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Interest
expense
|
2,781 | 3,375 | 8,387 | 10,665 | ||||||||||||
|
Provision
for taxes on income
|
21,826 | 25,932 | 60,304 | 73,719 | ||||||||||||
|
Depreciation
and amortization
|
24,929 | 22,420 | 69,724 | 67,132 | ||||||||||||
| $ | 84,550 | $ | 93,505 | $ | 235,154 | $ | 270,275 | |||||||||
|
Capital
expenditures
|
$ | 46,364 | $ | 35,014 | $ | 162,972 | $ | 141,525 | ||||||||
|
Acquisitions
of businesses and marine equipment
|
$ | — | $ | 302 | $ | — | $ | 5,436 | ||||||||
|
September 30,
|
||||||||
|
2009
|
2008
|
|||||||
|
(unaudited,
$ in thousands)
|
||||||||
|
Long-term
debt, including current portion
|
$ | 200,398 | $ | 269,170 | ||||
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Total
equity
|
$ | 1,004,120 | $ | 889,189 | ||||
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Debt
to capitalization ratio
|
16.6 | % | 23.2 | % | ||||
5
MARINE TRANSPORTATION
STATEMENTS OF EARNINGS
|
Third Quarter
|
Nine Months
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(unaudited,
$ in thousands)
|
||||||||||||||||
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Marine
transportation revenues
|
$ | 227,467 | $ | 286,880 | $ | 664,394 | $ | 830,014 | ||||||||
|
Costs
and expenses:
|
||||||||||||||||
|
Costs
of sales and operating expenses
|
125,160 | 173,249 | 373,177 | 507,083 | ||||||||||||
|
Selling,
general and administrative
|
18,623 | 24,477 | 61,047 | 68,382 | ||||||||||||
|
Taxes,
other than on income
|
2,752 | 3,318 | 8,256 | 9,741 | ||||||||||||
|
Depreciation
and amortization
|
23,337 | 20,811 | 64,964 | 62,113 | ||||||||||||
| 169,872 | 221,855 | 507,444 | 647,319 | |||||||||||||
|
Operating
income
|
$ | 57,595 | $ | 65,025 | $ | 156,950 | $ | 182,695 | ||||||||
|
Operating
margins
|
25.3 | % | 22.7 | % | 23.6 | % | 22.0 | % | ||||||||
DIESEL ENGINE SERVICES
STATEMENTS OF EARNINGS
|
Third Quarter
|
Nine Months
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(unaudited,
$ in thousands)
|
||||||||||||||||
|
Diesel
engine services revenues
|
$ | 44,699 | $ | 67,767 | $ | 158,176 | $ | 203,463 | ||||||||
|
Costs
and expenses:
|
||||||||||||||||
|
Costs
of sales and operating expenses
|
32,026 | 47,626 | 113,813 | 142,397 | ||||||||||||
|
Selling,
general and administrative
|
6,746 | 8,164 | 23,002 | 24,506 | ||||||||||||
|
Taxes,
other than income
|
227 | 229 | 980 | 757 | ||||||||||||
|
Depreciation
and amortization
|
1,053 | 1,121 | 3,190 | 3,715 | ||||||||||||
| 40,052 | 57,140 | 140,985 | 171,375 | |||||||||||||
|
Operating
income
|
$ | 4,647 | $ | 10,627 | $ | 17,191 | $ | 32,088 | ||||||||
|
Operating
margins
|
10.4 | % | 15.7 | % | 10.9 | % | 15.8 | % | ||||||||
OTHER COSTS AND
EXPENSES
|
Third Quarter
|
Nine Months
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(unaudited,
$ in thousands)
|
||||||||||||||||
|
General
corporate expenses
|
$ | 3,129 | $ | 3,886 | $ | 9,045 | $ | 10,815 | ||||||||
|
Loss
(gain) on disposition of assets
|
$ | (753 | ) | $ | 166 | $ | (1,117 | ) | $ | (276 | ) | |||||
6
MARINE TRANSPORTATION
PERFORMANCE MEASUREMENTS
|
Third Quarter
|
Nine Months
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Ton
Miles (in millions) (3)
|
3,257 | 3,459 | 9,032 | 10,975 | ||||||||||||
|
Revenue/Ton
Mile (cents/tm) (4)
|
6.6 | 7.9 | 7.0 | 7.2 | ||||||||||||
|
Towboats
operated (average) (5)
|
215 | 255 | 222 | 258 | ||||||||||||
|
Delay
Days (6)
|
688 | 1,429 | 3,393 | 6,341 | ||||||||||||
|
Average
cost per gallon of fuel consumed
|
$ | 1.89 | $ | 3.99 | $ | 1.63 | $ | 3.40 | ||||||||
|
Tank
barges:
|
874 | 915 | ||||||||||||||
|
Active
|
38 | 64 | ||||||||||||||
|
Inactive
|
||||||||||||||||
|
Barrel
capacities (in millions):
|
16.8 | 17.5 | ||||||||||||||
|
Active
|
0.7 | 1.1 | ||||||||||||||
|
Inactive
|
||||||||||||||||
|
(1)
|
Kirby
adopted a new accounting standard included in ASC 260 “Earnings
Per Share” which requires unvested share-based payment awards with
non-forfeitable rights to receive dividends or dividend equivalents
(whether paid or unpaid) to be considered participating securities for the
purposes of applying the two-class method of calculating earnings per
share. Accordingly, restricted stock granted under
Kirby’s stock-based compensation plans are treated as participating
securities under the two-class method of determining earnings
per share and earnings per share for prior periods have been restated to
conform to this standard. The adoption of this standard lowered
basic earnings per common share for both the three and nine months ended
September 30, 2008 by $.01.
|
|
(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 2009 inland marine
revenues of $216,333,000 divided by 3,257,000,000 marine transportation
ton miles = 6.6 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.
|
7