10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022

or

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

 

Commission File Number: 1-7615

 

KIRBY CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Nevada

 

74-1884980

(I.R.S. Employer Identification No.)

(State or other jurisdiction of incorporation or organization)

 

 

55 Waugh Drive, Suite 1000

Houston, TX

 

77007

(Address of principal executive offices)

 

(Zip Code)

 

713-435-1000

(Registrant’s telephone number, including area code)

 

No Change

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

KEX

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 

As of November 3, 2022, 59.9 million shares of the Registrant’s $0.10 par value per share common stock were outstanding.

 

 

 


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED BALANCE SHEETS

(Unaudited)

 

 

September 30,
2022

 

 

December 31,
2021

 

 

 

($ in thousands)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

36,991

 

 

$

34,813

 

Accounts receivable:

 

 

 

 

 

 

Trade – less allowance for doubtful accounts

 

 

482,744

 

 

 

417,958

 

Other

 

 

133,278

 

 

 

149,964

 

Inventories – net

 

 

392,470

 

 

 

331,350

 

Prepaid expenses and other current assets

 

 

80,899

 

 

 

69,780

 

Total current assets

 

 

1,126,382

 

 

 

1,003,865

 

 

 

 

 

 

 

 

Property and equipment

 

 

5,434,740

 

 

 

5,392,851

 

Accumulated depreciation

 

 

(1,794,050

)

 

 

(1,714,336

)

Property and equipment – net

 

 

3,640,690

 

 

 

3,678,515

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

153,723

 

 

 

167,730

 

Goodwill

 

 

438,748

 

 

 

438,748

 

Other intangibles, net

 

 

53,615

 

 

 

60,070

 

Other assets

 

 

43,140

 

 

 

50,135

 

Total assets

 

$

5,456,298

 

 

$

5,399,063

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Bank notes payable

 

$

3,599

 

 

$

1,934

 

Accounts payable

 

 

241,623

 

 

 

199,088

 

Accrued liabilities

 

 

209,724

 

 

 

236,078

 

Current portion of operating lease liabilities

 

 

33,495

 

 

 

33,902

 

Deferred revenues

 

 

82,120

 

 

 

72,770

 

Total current liabilities

 

 

570,561

 

 

 

543,772

 

 

 

 

 

 

 

 

Long-term debt, net – less current portion

 

 

1,114,860

 

 

 

1,161,433

 

Deferred income taxes

 

 

604,596

 

 

 

574,152

 

Operating lease liabilities – less current portion

 

 

144,201

 

 

 

159,672

 

Other long-term liabilities

 

 

46,717

 

 

 

71,252

 

Total long-term liabilities

 

 

1,910,374

 

 

 

1,966,509

 

 

 

 

 

 

 

 

Contingencies and commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Kirby stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.10 par value per share. Authorized 120 million shares, issued 65.5 million shares

 

 

6,547

 

 

 

6,547

 

Additional paid-in capital

 

 

857,674

 

 

 

854,512

 

Accumulated other comprehensive income – net

 

 

(13,455

)

 

 

(25,966

)

Retained earnings

 

 

2,431,421

 

 

 

2,346,439

 

Treasury stock – at cost, 5.6 million shares at September 30, 2022 and 5.4 million at December 31, 2021

 

 

(309,130

)

 

 

(295,208

)

Total Kirby stockholders’ equity

 

 

2,973,057

 

 

 

2,886,324

 

Noncontrolling interests

 

 

2,306

 

 

 

2,458

 

Total equity

 

 

2,975,363

 

 

 

2,888,782

 

Total liabilities and equity

 

$

5,456,298

 

 

$

5,399,063

 

 

See accompanying notes to condensed financial statements.

 

2


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF EARNINGS

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

($ in thousands, except per share amounts)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Marine transportation

 

$

433,040

 

 

$

338,514

 

 

$

1,194,231

 

 

$

972,352

 

Distribution and services

 

 

312,803

 

 

 

260,406

 

 

 

860,358

 

 

 

683,042

 

Total revenues

 

 

745,843

 

 

 

598,920

 

 

 

2,054,589

 

 

 

1,655,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Costs of sales and operating expenses

 

 

552,392

 

 

 

446,519

 

 

 

1,526,872

 

 

 

1,219,038

 

Selling, general and administrative

 

 

75,381

 

 

 

66,065

 

 

 

221,721

 

 

 

198,434

 

Taxes, other than on income

 

 

9,121

 

 

 

9,917

 

 

 

28,332

 

 

 

28,541

 

Depreciation and amortization

 

 

50,419

 

 

 

53,462

 

 

 

150,498

 

 

 

163,484

 

Impairments

 

 

 

 

 

340,713

 

 

 

 

 

 

340,713

 

Gain on disposition of assets

 

 

(377

)

 

 

(830

)

 

 

(7,971

)

 

 

(5,082

)

Total costs and expenses

 

 

686,936

 

 

 

915,846

 

 

 

1,919,452

 

 

 

1,945,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

58,907

 

 

 

(316,926

)

 

 

135,137

 

 

 

(289,734

)

Other income

 

 

3,805

 

 

 

1,832

 

 

 

11,853

 

 

 

8,146

 

Interest expense

 

 

(11,755

)

 

 

(10,500

)

 

 

(32,598

)

 

 

(32,172

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before taxes on income

 

 

50,957

 

 

 

(325,594

)

 

 

114,392

 

 

 

(313,760

)

(Provision) benefit for taxes on income

 

 

(11,713

)

 

 

60,442

 

 

 

(28,956

)

 

 

55,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

 

39,244

 

 

 

(265,152

)

 

 

85,436

 

 

 

(257,920

)

Net (earnings) loss attributable to noncontrolling interests

 

 

(153

)

 

 

422

 

 

 

(454

)

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Kirby

 

$

39,091

 

 

$

(264,730

)

 

$

84,982

 

 

$

(257,915

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share attributable to Kirby common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.65

 

 

$

(4.41

)

 

$

1.41

 

 

$

(4.30

)

Diluted

 

$

0.65

 

 

$

(4.41

)

 

$

1.41

 

 

$

(4.30

)

 

See accompanying notes to condensed financial statements.

 

3


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

($ in thousands)

 

Net earnings (loss)

 

$

39,244

 

 

$

(265,152

)

 

$

85,436

 

 

$

(257,920

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income, net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Pension and postretirement benefits

 

 

9,110

 

 

 

3,142

 

 

 

13,254

 

 

 

7,494

 

Foreign currency translation adjustments

 

 

(608

)

 

 

(122

)

 

 

(743

)

 

 

(705

)

Total other comprehensive income, net of taxes

 

 

8,502

 

 

 

3,020

 

 

 

12,511

 

 

 

6,789

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss), net of taxes

 

 

47,746

 

 

 

(262,132

)

 

 

97,947

 

 

 

(251,131

)

Net (earnings) loss attributable to noncontrolling interests

 

 

(153

)

 

 

422

 

 

 

(454

)

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to Kirby

 

$

47,593

 

 

$

(261,710

)

 

$

97,493

 

 

$

(251,126

)

 

See accompanying notes to condensed financial statements.

 

4


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

($ in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings (loss)

 

$

85,436

 

 

$

(257,920

)

Adjustments to reconcile net earnings (loss) to net cash provided by operations:

 

 

 

 

 

 

Depreciation and amortization

 

 

150,498

 

 

 

163,484

 

Provision (benefit) for deferred income taxes

 

 

25,986

 

 

 

(56,448

)

Impairments

 

 

 

 

 

340,713

 

Amortization of share-based compensation

 

 

11,448

 

 

 

12,793

 

Amortization of major maintenance costs

 

 

21,677

 

 

 

26,189

 

Other

 

 

(7,608

)

 

 

(6,290

)

Increase (decrease) in cash flows resulting from changes in operating assets and liabilities, net

 

 

(126,252

)

 

 

57,841

 

Net cash provided by operating activities

 

 

161,185

 

 

 

280,362

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(120,263

)

 

 

(71,968

)

Acquisitions of businesses and marine equipment

 

 

(3,900

)

 

 

(7,470

)

Proceeds from disposition of assets

 

 

32,904

 

 

 

39,163

 

Net cash used in investing activities

 

 

(91,259

)

 

 

(40,275

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings (payments) on bank credit facilities, net

 

 

21,664

 

 

 

(248,057

)

Borrowings on long-term debt

 

 

250,000

 

 

 

 

Payments on long-term debt

 

 

(315,000

)

 

 

(15,000

)

Payment of debt issuance costs

 

 

(1,538

)

 

 

 

Proceeds from exercise of stock options

 

 

3,885

 

 

 

629

 

Payments related to tax withholding for share-based compensation

 

 

(3,193

)

 

 

(2,856

)

Treasury stock purchases

 

 

(22,901

)

 

 

 

Return of investment to noncontrolling interest and other

 

 

(665

)

 

 

(764

)

Net cash used in financing activities

 

 

(67,748

)

 

 

(266,048

)

Increase (decrease) in cash and cash equivalents

 

 

2,178

 

 

 

(25,961

)

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

 

34,813

 

 

 

80,338

 

Cash and cash equivalents, end of period

 

$

36,991

 

 

$

54,377

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid (received) during the period:

 

 

 

 

 

 

Interest paid

 

$

39,754

 

 

$

39,134

 

Income taxes paid (refunded), net

 

$

2,097

 

 

$

(116,010

)

Operating cash outflow from operating leases

 

$

33,412

 

 

$

33,575

 

Non-cash investing activity:

 

 

 

 

 

 

Capital expenditures included in accounts payable

 

$

(8,508

)

 

$

(13,549

)

Right-of-use assets obtained in exchange for lease obligations

 

$

14,329

 

 

$

18,117

 

 

See accompanying notes to condensed financial statements.

 

5


 

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in-

 

 

Comprehensive

 

 

Retained

 

 

Treasury Stock

 

 

Noncontrolling

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income, Net

 

 

Earnings

 

 

Shares

 

 

Amount

 

 

Interests

 

 

Total

 

 

(in thousands)

 

Balance at June 30, 2022

 

65,472

 

 

$

6,547

 

 

$

854,781

 

 

$

(21,957

)

 

$

2,392,330

 

 

 

(5,501

)

 

$

(304,314

)

 

$

2,357

 

 

$

2,929,744

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock for equity awards, net of forfeitures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax withholdings on equity award vesting