UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 29, 2004
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 January 29, 2004
Item 12. Results of Operations and Financial Condition
On January 29, 2004, Kirby Corporation ("Kirby") issued a press release
announcing earnings for the fourth quarter and year ended December 31, 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. 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 2003 and 2002 fourth
quarters and years 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: January 29, 2004
EXHIBIT INDEX
Exhibit 99.1 Press release dated January 29, 2004
[GRAPHIC OMITTED]
KIRBY CORPORATION Contact: Steve Holcomb
713-435-1135
FOR IMMEDIATE RELEASE
- ---------------------
KIRBY CORPORATION ANNOUNCES
SOLID 2003 FOURTH QUARTER AND YEAR RESULTS
- - 2003 FOURTH QUARTER EARNINGS PER SHARE WERE $.45 VERSUS A $.09 LOSS FOR THE
2002 FOURTH QUARTER (2002 FOURTH QUARTER INCLUDED A $.52 PER SHARE NON-CASH
IMPAIRMENT CHARGE)
- - 2003 YEAR EARNINGS PER SHARE WERE $1.67 VERSUS $1.13 EARNED IN THE 2002
YEAR (2002 YEAR INCLUDED A $.51 PER SHARE NON-CASH IMPAIRMENT CHARGE)
- - 2004 FIRST QUARTER EARNINGS PER SHARE GUIDANCE IS $.30 TO $.36 VERSUS $.28
EARNED FOR THE 2003 FIRST QUARTER
- - 2004 YEAR EARNINGS PER SHARE GUIDANCE IS $1.85 TO $1.95 VERSUS $1.67 EARNED
FOR THE 2003 YEAR
HOUSTON, TEXAS (JANUARY 29, 2004) - Kirby Corporation ("Kirby") (NYSE:KEX)
announced today that for the fourth quarter ended December 31, 2003, net
earnings were $11,050,000, or $.45 per share, compared with a 2002 fourth
quarter net loss of $2,075,000, or $.09 per share, including an after-tax
non-cash impairment charge of $12,498,000, or $.52 per share. For the 2003
year, net earnings were $40,918,000, or $1.67 per share, compared with 2002 net
earnings of $1.13 per share, including the after-tax non-cash impairment charge
of $12,498,000, or $.51 per share. The 2003 fourth quarter and year results
were in line with Kirby's published earnings guidance of $.44 to $.48 per share
for the fourth quarter and $1.66 to $1.70 per share for the year.
Revenue for the marine transportation segment increased 11% for the 2003 fourth
quarter and 18% for the 2003 year when compared with the corresponding periods
of 2002. The substantial increase for both 2003 periods reflected the October
2002 transaction with Coastal Towing, Inc. ("Coastal") and the January 2003
purchase of the inland tank barge fleet of SeaRiver Maritime, Inc. ("SeaRiver").
The Coastal transaction consisted of Kirby purchasing 10 double hull inland
black oil tank barges and 13 inland towboats, and assuming the management of
Coastal's remaining 54 active black oil tank barges. The purchase of the
SeaRiver fleet, the U.S. marine transportation affiliate of Exxon Mobil
Corporation, included 48 double hull inland tank barges and seven towboats, and
the
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assumption of the leases on 16 double hull tank barges. Operating income for the
marine transportation segment increased 3% for the quarter and 4% for the year
when compared with the 2002 corresponding periods. Since the spring of 2000, the
U.S. petrochemical business has been under pressure and, as a result, the marine
transportation segment has had only limited success in passing through
inflationary increases in its expenses in its contract rate renewals, thereby
lowering operating margins.
During the 2003 fourth quarter, the marine transportation segment's
petrochemical market reflected a modest improvement in volumes. Gasoline
blending components volumes, part of Kirby's petrochemical market, remained
strong. Refined products volumes were as expected, fueled by scheduled Midwest
refinery outages for maintenance, as well as low Midwest inventory levels.
Black oil product volumes were lower than anticipated. Liquid fertilizer
volumes improved significantly, driven by an improved farm belt economy.
Imported liquid fertilizer products replaced curtailed U.S. domestic production
to meet the demand to replenish low Midwest inventory levels.
During the first nine months of 2003, contract rates remained relatively flat.
During the fourth quarter of 2003, contract pricing improved marginally for some
contracts which were renewed. Spot market rates fluctuated over and under
contract rates during the 2003 year, depending on market demand, fuel prices,
weather conditions and other factors.
The diesel engine services segment reported 5% lower revenue and 9% lower
operating income for the 2003 fourth quarter compared with the corresponding
2002 quarter. During the 2003 fourth quarter, the Midwest dry-cargo barge
market, under pressure since 2002, reflected signs of improvement; however, not
enough to offset the weak Gulf Coast offshore oil service market and East Coast
marine market.
Equity in earnings of marine affiliates, consisting primarily of a 35% owned
offshore partnership operating four offshore dry-cargo barge and tug units, was
$723,000 for the 2003 fourth quarter and $2,932,000 for the year, significantly
higher than the corresponding 2002 periods. The improved results for both 2003
periods reflect close to full utilization of the partnership's fleet compared
with 2002 results which were negatively impacted by vessels in the shipyard for
planned maintenance.
During the 2002 fourth quarter, the Company recorded an after-tax non-cash
impairment charge of $12.5 million, or $.52 per share. The impairment charge
primarily resulted from reduced estimated useful lives on 114 single hull tank
barges due to our assessment of the impact of new U.S. Coast Guard regulations
that require the installation of tank level monitoring devices on all single
hull tank barges by October 2007, and the adjustment of book value to the fair
value of 21 inactive or out-of-service double hull tank barges and five inactive
towboats that Kirby has committed to sell.
Joe Pyne, President and Chief Executive Officer of Kirby, commented, "The 2003
year was a challenging year for Kirby. Although we saw some improvement in
several of our core markets, we did not have any meaningful ability to pass
through to our customers the cost increases we have incurred over the last three
years. As a result, our operating margins for 2003 were below 2002 operating
margins. Our weakest market during the fourth quarter was our black oil market.
Weaker than expected black oil movements to
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power plants and other industrial users were the principal cause of the
weakness. Petrochemical volumes continued to improve, but not to the extent that
the third quarter GDP growth rate might suggest. The consensus from our
petrochemical customers continues to be that volumes will improve throughout
2004."
Mr. Pyne further commented, "The 2003 year was another year of strong generation
of cash. At the end of February 2003, after we acquired the SeaRiver fleet for
$35.6 million, our debt totaled $297.1 million. Capital expenditures for 2003
were $71.4 million compared with $47.7 million in 2002. We also made a $5.6
million contribution in November 2003 to our defined benefit pension plan. Our
contribution policy for the pension plan is to fully fund Kirby's accumulated
benefit obligation. At December 31, 2003, our debt decreased to $255.3 million,
a reduction of 14% from our high at February 28, 2003. Our
debt-to-capitalization ratio as of December 31, 2003 was 40.7%, down from 45.1%
as of December 31, 2002. Our EBITDA for 2003 increased to $134.0 million. The
increase was primarily the result of the additional cash generated from the
operations of the SeaRiver and Coastal fleets. In addition, significant
emphasis was placed during 2003 on the collection of our accounts receivables
and the management of our diesel engine services inventories."
Commenting on the 2004 guidance, Mr. Pyne said, "Historically, the first quarter
is our lowest earnings quarter due to weather conditions. For the 2004 first
quarter, our earnings per share guidance is $.30 to $.36 compared with $.28 for
the 2003 first quarter. This is a larger range than we normally give; however,
the first quarter's earnings are usually volatile due to weather issues and the
seasonality of the refined products and liquid fertilizer markets. For the 2004
year, we anticipate net earnings in the $1.85 to $1.95 per share range. This
guidance compares with 2003 net earnings of $1.67 per share. Our 2004 year
guidance assumes the U.S. economy will gradually strengthen as the year
progresses, leading to improved petrochemical volumes for Kirby. Capital
spending for 2004 is anticipated to be in the $85 to $90 million range and will
include approximately $41 million for the completion of 16 new 30,000 barrel
petrochemical tank barges and 10 new 30,000 barrel black oil tank barges."
This earnings press release includes marine transportation performance measures
for both the 2003 and 2002 periods. The performance measures include ton miles,
revenues per ton mile, towboats operated and delay days. Comparable performance
measures for the 2003 and 2002 years and quarters 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.
-----------------
A conference call is scheduled at 10:00 a.m. central time today, January 29,
2004, to discuss the 2003 fourth quarter and outlook for the 2004 year. The
conference call number is 888-396-9923 for domestic callers and 773-756-4706 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 January 29 through 5:00 p.m. on Friday, February 27, 2004,
by dialing 800-945-6737 for domestic callers and 402-220-3456 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.
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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 fourth quarters and years 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, refined petroleum products, black
oil 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.
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 the timing,
magnitude and number of acquisitions made by Kirby. A list 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: Thursday, January 29, 2004
Time: 10:00 a.m. central time
U.S.: 888-396-9923
Int'l: 773-756-4706
Leader: Steve Holcomb
Passcode: Kirby
- Tables follow -
Page 4 of 7
A summary of the results for the fourth quarter and year follows:
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
---------------------------------------------
Fourth Quarter Year
--------------------- ---------------------
2003 2002 2003 2002
---------- --------- ---------- ---------
(unaudited, $in thousands except per share amounts)
Revenues:
Marine transportation . . . . . . . . . . . . . . $ 133,794 $120,601 $ 530,411 $450,280
Diesel engine services. . . . . . . . . . . . . . 18,234 19,280 83,063 85,123
---------- --------- ---------- ---------
152,028 139,881 613,474 535,403
---------- --------- ---------- ---------
Costs and expenses:
Costs of sales and operating expenses . . . . . . 94,239 86,278 395,043 334,146
Selling, general and administrative . . . . . . . 18,768 17,419 73,149 66,855
Taxes, other than on income . . . . . . . . . . . 3,220 3,951 13,141 11,136
Depreciation and other amortization . . . . . . . 14,833 11,662 53,328 45,507
Impairment of long-lived assets . . . . . . . . . - 17,712 - 17,712
Loss (gain) on disposition of assets. . . . . . . 37 (31) 99 (624)
---------- --------- ---------- ---------
131,097 136,991 534,760 474,732
---------- --------- ---------- ---------
Operating income. . . . . . . . . . . . . . . . 20,931 2,890 78,714 60,671
Equity in earnings (loss) of marine affiliates. . 723 (172) 2,932 700
Impairment of equity investment . . . . . . . . . - (1,221) - (1,221)
Other expense . . . . . . . . . . . . . . . . . . (285) (329) (1,021) (1,117)
Interest expense. . . . . . . . . . . . . . . . . (3,546) (3,289) (14,628) (13,540)
---------- --------- ---------- ---------
Earnings (loss) before taxes on income. . . . . 17,823 (2,121) 65,997 45,493
Provision for taxes on income . . . . . . . . . . (6,773) 46 (25,079) (18,047)
---------- --------- ---------- ---------
Net earnings (loss) . . . . . . . . . . . . . . $ 11,050 $ (2,075) $ 40,918 $ 27,446
========== ========= ========== =========
Net earnings (loss) per share of common stock:
Basic . . . . . . . . . . . . . . . . . . . . . . $ .46 $ (.09) $ 1.69 $ 1.14
Diluted . . . . . . . . . . . . . . . . . . . . . $ .45 $ (.09) $ 1.67 $ 1.13
Common stock outstanding (in thousands):
Basic . . . . . . . . . . . . . . . . . . . . . . 24,273 24,004 24,153 24,061
Diluted . . . . . . . . . . . . . . . . . . . . . 24,734 24,264 24,506 24,394
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
--------------------------------------------
Fourth Quarter Year
------------------- --------------------
2003 2002 2003 2002
-------- --------- --------- ---------
(unaudited, $in thousands except per share amounts)
EBITDA:(1)
Net earnings (loss) . . . . . . . . . . . . . . . $ 11,050 $ (2,075) $ 40,918 $ 27,446
Interest expense. . . . . . . . . . . . . . . . . 3,546 3,289 14,628 13,540
Provision for taxes on income . . . . . . . . . . 6,773 (46) 25,079 18,047
Depreciation and other amortization . . . . . . . 14,833 11,662 53,328 45,507
-------- --------- --------- ---------
$ 36,202 $ 12,830 $ 133,953 $ 104,540
======== ========= ========= =========
EBITDA per share - diluted (1). . . . . . . . . . . $ 1.46 $ .53 $ 5.47 $ 4.29
Capital expenditures. . . . . . . . . . . . . . . . $ 19,255 $ 8,511 $ 71,442 $ 47,709
Acquisition of businesses and marine equipment. . . $ - $ 40,053 $ 37,816 $ 44,653
December 31,
--------------------
2003 2002
--------- ---------
(unaudited, $in thousands)
Long-term debt, including current portion. $ 255,265 $ 266,001
Stockholders' equity . . . . . . . . . . . $ 372,453 $ 323,311
Debt to capitalization ratio . . . . . . . 40.7 % 45.1 %
Page 5 of 7
MARINE TRANSPORTATION STATEMENTS OF EARNINGS
--------------------------------------------
Fourth Quarter Year
---------------------- ----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
(unaudited, $in thousands)
Marine transportation revenues . . . . . $ 133,794 $ 120,601 $ 530,411 $ 450,280
---------- ---------- ---------- ----------
Costs and expenses:
Costs of sales and operating expenses. 80,887 71,659 332,600 269,838
Selling, general and administrative. . 14,435 14,036 57,271 52,967
Taxes, other than on income. . . . . . 3,374 3,728 12,824 10,548
Depreciation and other amortization. . 14,138 10,885 50,442 42,332
---------- ---------- ---------- ----------
112,834 100,308 453,137 375,685
---------- ---------- ---------- ----------
Operating income . . . . . . . . . . $ 20,960 $ 20,293 $ 77,274 $ 74,595
========== ========== ========== ==========
Operating margins. . . . . . . . . . 15.7% 16.8% 14.6% 16.6%
========== ========== ========== ==========
DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS
---------------------------------------------
Fourth Quarter Year
-------------------- --------------------
2003 2002 2003 2002
--------- --------- --------- ---------
(unaudited, $in thousands)
Diesel engine services revenues . . . . $ 18,234 $ 19,280 $ 83,063 $ 85,123
--------- --------- --------- ---------
Costs and expenses:
Costs of sales and operating expenses. 13,315 14,430 62,266 63,928
Selling, general and administrative. . 2,923 2,687 11,530 11,111
Taxes, other than income . . . . . . . 91 89 332 303
Depreciation and other amortization. . 257 255 1,045 940
--------- --------- --------- ---------
16,586 17,461 75,173 76,282
--------- --------- --------- ---------
Operating income . . . . . . . . . . $ 1,648 $ 1,819 $ 7,890 $ 8,841
========= ========= ========= =========
Operating margins. . . . . . . . . . 9.0% 9.4% 9.5% 10.4%
========= ========= ========= =========
OTHER COSTS AND EXPENSES
------------------------
Fourth Quarter Year
------------------ ------------------
2003 2002 2003 2002
------- --------- ------- ---------
(unaudited, $in thousands)
General corporate expenses. . . . . . $ 1,640 $ 1,541 $ 6,351 $ 5,677
======= ========= ======= =========
Impairment of long-lived assets . . . $ - $ 17,712 $ - $ 17,712
======= ========= ======= =========
Loss (gain) on disposition of assets. $ 37 $ (31) $ 99 $ (624)
======= ========= ======= =========
Page 6 of 7
MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS
----------------------------------------------
Fourth Quarter Year
-------------- ----------------
2003 2002 2003 2002
------ ------ ------- -------
Ton Miles (in millions) (2). . . . . . . 4,115 3,725 15,582 13,377
Revenue/Ton Mile (cents/tm) (3) . . . . . 3.3 3.2 3.4 3.4
Towboats operated (average) (4). . . . . 224 205 225 201
Delay Days (5) . . . . . . . . . . . . . 1,610 1,588 6,462 5,974
Average cost per gallon of fuel consumed. $ .89 $ .82 $ .89 $ .72
Tank barges:
Active . . . . . . . . . . . . . . . . . . . . . . . . . . . 885 848
Inactive . . . . . . . . . . . . . . . . . . . . . . . . . . 60 88
Barrel Capacities (in millions):
Active . . . . . . . . . . . . . . . . . . . . . . . . . . .16.2 15.5
Inactive . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.6
_______________________________
(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. EBITDA for the 2002
fourth quarter and year includes an $18,933,000 non-cash impairment charge.
(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: Fourth
quarter 2003 revenues of $133,794,000 divided by 4,115,000,000 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.
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