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 23, 2003
KIRBY CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 74-1884980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 WAUGH DRIVE, SUITE 1000 77007
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(713) 435-1000
Item 7. Financial Statements and Exhibits
(c) Exhibits:
99.1 Press release dated October 23, 2003
Item 12. Results of Operations and Financial Condition
On October 23, 2003, Kirby Corporation ("Kirby") issued a press release
announcing earnings for the quarter ended September 30, 2003. 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, a measure that
excludes certain non-operating expenses and non-cash charges. EBITDA is
presented for that reason and because of its wide acceptance as a financial
indicator. EBITDA is used by Kirby's lenders in loan covenants, 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 2003 and 2002 third quarters and first nine months is
included in the press release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KIRBY CORPORATION
(Registrant)
By: /s/ NORMAN W. NOLEN
-----------------------------------
Norman W. Nolen
Executive Vice President, Treasurer
and Chief Financial Officer
Dated: October 23, 2003
EXHIBIT INDEX
Exhibit 99.1 Press release dated October 23, 2003
KIRBY
KIRBY CORPORATION CONTACT: STEVE HOLCOMB
713-435-1135
FOR IMMEDIATE RELEASE
- ---------------------
KIRBY CORPORATION ANNOUNCES
2003 THIRD QUARTER RESULTS
- 2003 THIRD QUARTER EARNINGS PER SHARE WERE $.46 VERSUS $.49 EARNED IN THE
2002 THIRD QUARTER (2002 THIRD QUARTER INCLUDED A $.06 PER SHARE FAVORABLE
ADJUSTMENT TO ACCRUED INSURANCE LIABILITIES)
- 2003 FOURTH QUARTER EARNINGS PER SHARE GUIDANCE IS $.44 TO $.48 VERSUS A
LOSS OF $.09 FOR THE 2002 FOURTH QUARTER (2002 FOURTH QUARTER INCLUDED A
$.52 PER SHARE IMPAIRMENT CHARGE)
- 2003 YEAR EARNINGS PER SHARE GUIDANCE TIGHTENED TO $1.66 TO $1.70 VERSUS
$1.13 FOR THE 2002 YEAR (2002 YEAR INCLUDED A $.51 PER SHARE IMPAIRMENT
CHARGE)
HOUSTON, TEXAS (OCTOBER 23, 2003) - Kirby Corporation ("Kirby") (NYSE:KEX) today
announced net earnings for the third quarter ended September 30, 2003 of
$11,211,000, or $.46 per share, compared with $11,957,000, or $.49 per share,
for the third quarter of 2002. The 2002 third quarter results included a
$2,200,000 ($1,364,000 after taxes), or $.06 per share, favorable adjustment to
accrued insurance liabilities. Consolidated revenues for the 2003 third quarter
were $154,507,000 compared with $134,607,000 for the 2002 third quarter. EBITDA
per share for the 2003 third quarter was $1.43 compared with $1.38 for the prior
year third quarter.
Kirby reported net earnings for the first nine months of 2003 of $29,868,000, or
$1.22 per share, compared with $29,521,000, or $1.21 per share, for the first
nine months of 2002. Consolidated revenues for the first nine months of 2003
were $461,446,000 compared with $395,522,000 for the prior year first nine
months. EBITDA per share for the first nine months of 2003 was $4.00 compared
with $3.75 for the same period of 2002.
Revenue from the marine transportation segment increased 19% for the 2003 third
quarter compared with the 2002 third quarter, while operating income declined
6%. Marine transportation revenue for the first nine months of 2003 increased
20%, while operating income increased 4%. Marine transportation operating
income for both 2002 periods included the pre-tax $2,200,000 favorable
adjustment in accrued insurance liabilities. The 2003 third quarter and first
nine months results reflected the October
Page 1 of 7
2002 transaction with Coastal Towing, Inc. ("Coastal"), whereby Kirby purchased
10 double hull inland tank barges and 13 towboats and assumed the management of
Coastal's remaining 54 active black oil tank barges. In addition, the 2003
results also reflect the January 2003 purchase of the inland marine fleet of
SeaRiver Maritime, Inc. ("SeaRiver"), the U.S. marine transportation affiliate
of Exxon Mobil Corporation. The SeaRiver fleet included 48 double hull inland
tank barges and seven towboats, and the assumption of the leases on 16 double
hull tank barges. Kirby also entered into a contract to provide inland marine
transportation services to SeaRiver.
During the 2003 third quarter, the marine transportation segment benefited from
improved petrochemical volumes from several of its significant customers and
continued strong volumes for petrochemicals used in the production of gasoline
blending components. Black oil products and river refined products volumes
remained firm in the third quarter. Liquid fertilizer volumes, which
historically are seasonally slow in the third quarter, remained very weak when
compared with the prior year third quarter, as the U.S. production of nitrogen
based fertilizer continued to be curtailed due to high natural gas prices.
Revenues for the diesel engine services segment for the 2003 third quarter were
down 5% from 2002 third quarter levels, while operating income for the same
comparable quarters was down 19%. Continued weakness in the Midwest dry cargo
barge market and rail market, and the timing of engine overhauls in the East and
West Coast marine markets negatively affected the segment's third quarter 2003
results. The Gulf Coast market improved, benefiting from parts sales to
international offshore oilfield services customers.
Equity in earnings of marine affiliates, which primarily consist of a 35% owned
offshore partnership operating four offshore dry-cargo barge and tug units, was
$1,022,000 for the 2003 third quarter and $2,209,000 for the 2003 first nine
months, significantly higher than the corresponding 2002 periods. The higher
results in 2003 reflect close to full utilization of the four unit fleet
compared with 2002 when results were negatively impacted by weather delays,
maintenance days and dock facility closures.
Joe Pyne, Kirby's President and Chief Executive Officer, commented, "Our
operating margins in both our marine transportation and diesel engine services
segments weakened during the third quarter. The marine transportation margin
was 15.5% in the 2003 third quarter compared with a reported 2002 third quarter
margin of 19.5%, or 17.6% when adjusted for the pre-tax $2,200,000 favorable
adjustment to accrued insurance liabilities. The acquisitions of the Coastal
and SeaRiver inland tank barge assets have helped add to revenues and profits in
2003; however, our margins have declined, as we have not been able to raise our
transportation rates sufficiently to offset our increases in costs and expenses.
Our core petrochemical market has been under pressure since the summer of 2000.
On the diesel engine services side of our business, the decline in the 2003
third quarter operating margin was primarily due to lower revenues."
Mr. Pyne further commented, "We are encouraged by the recent comments from our
petrochemical customers forecasting higher production levels, which are more
optimistic concerning improving conditions in the U.S. petrochemical industry.
We are not forecasting much strengthening of petrochemicals volumes in our
fourth quarter
Page 2 of 7
guidance. We anticipate black oil volumes to remain strong, refined products
volumes to return to normal fourth quarter seasonal levels and for a normal
liquid fertilizer fall season."
Further commenting on the fourth quarter as well as the 2003 year, Mr. Pyne
said, "Based on the recent comments from our marine transportation petrochemical
customers, current market conditions and the more recent positive tones
regarding the U.S. economy, our earnings per share guidance for the 2003 fourth
quarter is $.44 to $.48. This guidance compares with a $.09 per share net loss
in the 2002 fourth quarter, which included a $.52 per share impairment charge.
For the 2003 year, our earnings per share guidance is $1.66 to $1.70. This
guidance compares with 2002 net earnings per share of $1.13 per share, which
included an impairment charge of $.51 per share."
This earnings press release includes condensed consolidated statements of
earnings, separate marine transportation and diesel engine services statements
of earnings, and marine transportation performance measurements for the 2003 and
2002 third quarters and first nine months. The performance measurements include
ton miles, revenues per ton mile, towboats operated and delay days. Definitions
of the performance measurements are included after the measurement table on page
7 of this press release. Comparable marine transportation performance
measurements by quarter for the 2002 year and the first three quarters of 2003
are available at Kirby's web site under the caption Performance Measurements in
the Investor Relations section. Kirby's homepage can be accessed by visiting
www.kirbycorp.com.
- -----------------
Kirby has scheduled a conference call at 10:00 a.m. central time today, October
23, 2003, to discuss the 2003 third quarter and first nine months, and the
outlook for the 2003 fourth quarter and year. The conference call number is
888-455-9641 for domestic callers and 773-756-4700 for international callers.
The passcode is Kirby and the leader's name is Steve Holcomb. An audio playback
will be available starting at approximately 12:00 noon central time on October
23 through 5:00 p.m. on Friday, November 21, 2003, by dialing 800-297-0768 for
domestic callers and 402-220-3822 for international callers. The conference
call can also be accessed by visiting Kirby's homepage at
http://www.kirbycorp.com/ or at http://www.vcall.com/. 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 for the 2003 and 2002 third quarters and first nine months with GAAP net
earnings for the same periods is included in the Condensed Consolidated
Financial Information in this press release.
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. Through the diesel engine services segment, Kirby
provides after-market service for large medium-speed diesel engines used in
marine, power generation and industrial, and railroad applications.
Page 3 of 7
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 the number of acquisitions made by Kirby. A listing of additional risk
factors can be found in Kirby's annual report on Form 10-K for the year ended
December 31, 2002, filed with the Securities and Exchange Commission.
CONFERENCE CALL INFORMATION
DATE: OCTOBER 23, 2003
TIME: 10:00 A.M. CENTRAL TIME
U.S.: 888-455-9641
INT'L: 773-756-4700
LEADER: STEVE HOLCOMB
PASSCODE: KIRBY
WEBCAST: HTTP://WWW.KIRBYCORP.COM/ OR HTTP://WWW.VCALL.COM/
------------------------- ---------------------
Page 4 of 7
A summary of the results for the third quarter and first nine months follows:
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
---------------------------------------------
Third Quarter Nine Months
---------------------------- ----------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
(unaudited, $ in thousands except per share amounts)
Revenues:
Marine transportation . . . . . . . . . . . . . . $ 134,396 $ 113,343 $ 396,617 $ 329,679
Diesel engine services. . . . . . . . . . . . . . 20,111 21,264 64,829 65,843
------------- ------------- ------------- -------------
154,507 134,607 461,446 395,522
------------- ------------- ------------- -------------
Costs and expenses:
Costs of sales and operating expenses . . . . . . 98,800 81,652 300,804 247,868
Selling, general and administrative . . . . . . . 18,069 16,748 54,381 49,436
Taxes, other than on income . . . . . . . . . . . 3,385 2,627 9,921 7,185
Depreciation and other amortization . . . . . . . 13,369 10,826 38,495 33,845
Loss (gain) on disposition of assets. . . . . . . (71) (425) 62 (593)
------------- ------------- ------------- -------------
133,552 111,428 403,663 337,741
------------- ------------- ------------- -------------
Operating income. . . . . . . . . . . . . . . . 20,955 23,179 57,783 57,781
Equity in earnings (loss) of marine affiliates. . 1,022 (68) 2,209 872
Other expense . . . . . . . . . . . . . . . . . . (134) (447) (736) (788)
Interest expense. . . . . . . . . . . . . . . . . (3,761) (3,378) (11,082) (10,251)
------------- ------------- ------------- -------------
Earnings before taxes on income . . . . . . . . 18,082 19,286 48,174 47,614
Provision for taxes on income . . . . . . . . . . (6,871) (7,329) (18,306) (18,093)
------------- ------------- ------------- -------------
Net earnings. . . . . . . . . . . . . . . . . . $ 11,211 $ 11,957 $ 29,868 $ 29,521
============= ============= ============= =============
Net earnings per share of common stock:
Basic . . . . . . . . . . . . . . . . . . . . . . $ .46 $ .50 $ 1.24 $ 1.23
Diluted . . . . . . . . . . . . . . . . . . . . . $ .46 $ .49 $ 1.22 $ 1.21
Common stock outstanding (in thousands):
Basic . . . . . . . . . . . . . . . . . . . . . . 24,166 24,016 24,112 24,080
Diluted . . . . . . . . . . . . . . . . . . . . . 24,545 24,217 24,429 24,438
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
--------------------------------------------
Third Quarter Nine Months
------------------------------- -----------------------------
2003 2002 2003 2002
--------------- -------------- -------------- -------------
(unaudited, $ in thousands except per share amounts)
EBITDA: (1)
Net earnings . . . . . . . . . . . . . . . . . . . $ 11,211 $ 11,957 $ 29,868 $ 29,521
Interest expense . . . . . . . . . . . . . . . . . 3,761 3,378 11,082 10,251
Provision for taxes on income. . . . . . . . . . . 6,871 7,329 18,306 18,093
Depreciation and other amortization. . . . . . . . 13,369 10,826 38,495 33,845
--------------- -------------- -------------- -------------
$ 35,212 $ 33,490 $ 97,751 $ 91,710
=============== ============== ============== =============
EBITDA per share - diluted (1) . . . . . . . . . . . $ 1.43 $ 1.38 $ 4.00 $ 3.75
Capital expenditures . . . . . . . . . . . . . . . . $ 14,464 $ 10,964 $ 52,187 $ 39,198
Acquisition of businesses and marine equipment . . . $ - $ 1,800 $ 37,816 $ 4,600
September 30, December 31,
2003 2002
-------------- -------------
(unaudited, $ in thousands)
Long-term debt, including current portion . . . . . . . . . . . . . . . . . . . . . . $ 270,049 $ 266,001
Stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 356,590 $ 323,311
Debt to capitalization ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1% 45.1%
Page 5 of 7
MARINE TRANSPORTATION STATEMENTS OF EARNINGS
--------------------------------------------
Third Quarter Nine Months
---------------------- ----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
(unaudited, $ in thousands)
Marine transportation revenues. . . . . $ 134,396 $ 113,343 $ 396,617 $ 329,679
---------- ---------- ---------- ----------
Costs and expenses:
Costs of sales and operating expenses 83,492 65,530 251,713 198,179
Selling, general and administrative . 14,216 13,155 42,836 38,931
Taxes, other than on income . . . . . 3,206 2,517 9,450 6,820
Depreciation and other amortization . 12,654 9,983 36,304 31,447
---------- ---------- ---------- ----------
113,568 91,185 340,303 275,377
---------- ---------- ---------- ----------
Operating income. . . . . . . . . . $ 20,828 $ 22,158 $ 56,314 $ 54,302
========== ========== ========== ==========
Operating margins . . . . . . . . . 15.5% 19.5% 14.2% 16.5%
========== ========== ========== ==========
DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS
---------------------------------------------
Third Quarter Nine Months
-------------------- --------------------
2003 2002 2003 2002
--------- --------- --------- ---------
(unaudited, $ in thousands)
Diesel engine services revenues . . . . $ 20,111 $ 21,264 $ 64,829 $ 65,843
--------- --------- --------- ---------
Costs and expenses:
Costs of sales and operating expenses 15,246 16,066 48,951 49,498
Selling, general and administrative . 2,859 2,826 8,607 8,424
Taxes, other than income. . . . . . . 81 65 241 214
Depreciation and other amortization . 272 265 788 685
--------- --------- --------- ---------
18,458 19,222 58,587 58,821
--------- --------- --------- ---------
Operating income. . . . . . . . . . $ 1,653 $ 2,042 $ 6,242 $ 7,022
========= ========= ========= =========
Operating margins . . . . . . . . . 8.2% 9.6% 9.6% 10.7%
========= ========= ========= =========
OTHER COSTS AND EXPENSES
------------------------
Third Quarter Nine Months
------------------ -----------------
2003 2002 2003 2002
-------- -------- ------- --------
(unaudited, $in thousands)
General corporate expenses. . . . . . $ 1,597 $ 1,446 $ 4,711 $ 4,136
======== ======== ======= ========
Loss (gain) on disposition of assets. $ (71) $ (425) $ 62 $ (593)
======== ======== ======= ========
Page 6 of 7
MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS
----------------------------------------------
Third Quarter Nine Months
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Ton Miles (in millions) (2). . . . . . . 4,021 3,473 11,467 9,652
Revenue/Ton Mile (cents/tm) (3) . . . . . 3.3 3.3 3.5 3.4
Towboats operated (average) (4) . . . . . 222 196 226 200
Delay Days (5). . . . . . . . . . . . . . 1,001 1,072 4,852 4,386
Average cost per gallon of fuel consumed. $ .86 $ .73 $ .89 $ .68
Tank barges:
Active. . . . . . . . . . . . . . . . . . . . . . . . . . 882 809
Inactive. . . . . . . . . . . . . . . . . . . . . . . . . 70 67
- --------------------
(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 used by Kirby's lenders in
loan covenants, 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) Marine transportation revenues divided by ton miles. Example: Third quarter
2003 revenues of $134,396,000 divided by 4,021,000,000 ton miles = 3.3
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 tank
barges) during transit. The measure includes transit delays caused by
weather, lock congestion and other navigational factors.
Page 7 of 7
