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 26, 2006
Kirby
Corporation
(Exact
name of registrant as specified in its charter)
|
Nevada
|
1-7615
|
74-1884980
|
||
|
(State
or other jurisdiction of incorporation or
organization)
|
(Commission
File Number)
|
(I.R.S.
Employer 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
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:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
|
Item
2.02.
|
Results
of Operations and Financial
Condition
|
On
July
26, 2006, Kirby Corporation (“Kirby”) issued a press release announcing earnings
for the three months and six months ended June 30, 2006. 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 2006 and 2005 second quarters and first six months is
included in the press release.
|
Item
9.01.
|
Financial
Statements and Exhibits
|
|
(c)
|
Exhibits:
|
|
99.1
|
Press
release dated July 26, 2006
|
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:
July 27, 2006
EXHIBIT
INDEX
|
Press
release dated July 26, 2006
|
|
KIRBY
CORPORATION
|
|
Contact:
Steve Holcomb
|
|
|
713-435-1135
|
FOR
IMMEDIATE RELEASE
KIRBY
CORPORATION ANNOUNCES RECORD
2006
SECOND QUARTER AND SIX MONTHS RESULTS
|
·
|
2006
second quarter earnings per share were $.44, a 22% increase compared
with
$.36 earned in the 2005 second quarter
|
|
·
|
2006
first six months earnings per share were $.86, a 39% increase compared
with $.62 earned in the 2005 first six
months
|
|
·
|
Signed
an agreement to purchase the assets of Capital Towing Limited, an
inland
towboat company operating 11 towboats, for approximately $15 million
in
cash
|
|
·
|
Purchased
the assets of Marine Engine Specialists, Inc., a Gulf Coast high-speed
diesel engine services provider, for approximately $3.6 million in
cash
|
|
·
|
2006
third quarter earnings per share guidance is $.42 to $.47 versus
$.34
earned in the 2005 third
quarter
|
|
·
|
2006
year earnings per share guidance of $1.69 to $1.79 versus $1.33 earned
in
the 2005 year
|
Houston,
Texas (July 26, 2006)
- Kirby
Corporation (“Kirby”) (NYSE:KEX) today announced record net earnings for the
second quarter ended June 30, 2006 of $23,333,000, or $.44 per share, compared
with $18,447,000, or $.36 per share, for the second quarter of 2005.
Consolidated revenues for the 2006 second quarter were $243,292,000, a 22%
increase compared with $199,276,000 for the 2005 second quarter.
Record
net earnings for the first six months of 2006 were $45,913,000, or $.86 per
share, compared with $31,726,000, or $.62 per share, for the first six months
of
2005. Consolidated revenues for the first six months of 2006 were $468,195,000,
a 22% increase compared with $383,720,000 for the first half of 2005.
On
April
25, 2006, the Board of Directors declared a two-for-one stock split of Kirby’s
common stock. Stockholders of record on May 10, 2006 received one additional
share of common stock for each share of common stock held on that day, with
a
distribution date of May 31, 2006. All references to number of shares and per
share information in this press release have been adjusted to reflect the stock
split.
Page
1 of
7
Marine
transportation revenues and operating income for the 2006 second quarter
increased 20% and 24%, respectively, compared with the 2005 second quarter.
For
the first six months of 2006, revenue and operating income increased 20% and
34%, respectively, compared with the 2005 first six months. The record marine
transportation results for both periods reflected continued strong petrochemical
and black oil products volumes and higher rates on contract renewals and spot
market pricing.
The
2006
second quarter earnings were negatively impacted by an estimated $.03 to $.04
per share from diesel fuel cost recovery clauses in certain marine
transportation long-term contracts. The 2006 first quarter earnings were
positively impacted by an estimated $.03 to $.04 per share from fuel cost
recovery clauses under the same long-term contracts. For the first six months
of
2006, the estimated impact of the diesel fuel cost recovery clauses was neutral.
The results were also negatively impacted by a shortage of towboats which
resulted in delays and wage increases for vessel personnel. The marine
transportation operating margin for the 2006 second quarter was 18.6% compared
with 18.0% for the 2005 second quarter.
Diesel
engine services revenues and operating income for the 2006 second quarter
increased 37% and 71%, respectively, compared with the 2005 second quarter.
For
the first six months of 2006, revenues and operating income increased 34% and
68%, respectively, compared with the 2005 first six months. The record diesel
engine services results reflected continued strong marine, offshore oil service,
power generation and railroad markets, as well as the acquisition of Global
Power Holding Company (“Global”) on June 7, 2006. The record results were also
positively impacted by higher service rates and parts pricing implemented during
2005 and in the 2006 first half. The operating margin for the 2006 second
quarter was 15.0% compared with 12.1% for the 2005 second quarter.
On
July
24, 2006, Kirby signed an agreement to purchase the assets of Capital Towing
Limited (“Capital”) for approximately $15 million in cash. Capital owns 11
inland towboats, six of which are currently on charter to Kirby. One towboat
is
currently under charter to another company and that charter expires within
30
days. The remaining four are under charters with other companies with terms
expiring within the next ten months. The six towboats currently under charter
to
Kirby will be purchased at closing and the remaining five towboats will be
purchased upon expiration of their present charters. The acquisition will be
financed through Kirby’s $250 million revolving credit facility. Kirby and
Capital have entered into a charter agreement whereby Capital will continue
to
operate the towboats. The vessel crews will remain employees of Capital. Kirby
also recently signed a letter of intent for the construction of two 1800
horsepower towboats for delivery in the fourth quarter of 2007.
On
July
21, 2006, Kirby purchased the assets of Marine Engine Specialists, Inc. (“MES”)
for $3.6 million, subject to post-closing inventory adjustments. MES is a Gulf
Coast high-speed diesel engine services provider, operating a factory-authorized
full service distributorship for John Deere, as well as a service provider
for
Detroit Diesel. Financing of the acquisition was through Kirby’s $250 million
revolving credit facility.
Page
2 of
7
Kirby
announced on June 14, 2006, that it had increased its bank revolving credit
facility from $150 million to $250 million. The amended credit facility extended
the maturity date to June 14, 2011 and provides for an increase in the facility
from $250 million up to a maximum of $325 million, subject to the consent of
the
lending banks. The unsecured credit facility has a variable interest rate based
on the London Interbank Offered Rate (“LIBOR”) and varies with Kirby’s senior
debt rating and the level of debt outstanding. The current variable interest
rate spread is 40 basis points over LIBOR. As of June 30, 2006, Kirby had $82.5
million outstanding under its revolving credit facility, primarily resulting
from the purchase of Global. As of June 30, 2006, Kirby’s debt to capitalization
ratio was 32.0% compared with 25.9% as of March 31, 2006.
Joe
Pyne,
Kirby’s President and Chief Executive Officer, commented, “During the 2006
second quarter, our marine transportation segment experienced continued strong
utilization, with essentially no spare capacity in our petrochemical, black
oil
and refined products fleets. Pricing continues to improve. Our diesel engine
services segment also performed at record levels.”
Commenting
on the 2006 third quarter market conditions, Mr. Pyne said, “Currently, our
marine transportation fleet is fully utilized with no spare capacity. We see
no
reason why this full utilization will not continue for the balance of 2006
and
into 2007. We anticipate a continued tight labor market and we are aggressively
recruiting and training vessel personnel, and addressing vessel personnel pay
scales. We anticipate towboat availability to remain tight, and we are
addressing this issue with the purchase of Capital, as well as aggressively
recruiting qualified charter boat operators. Although there are some headwinds
imposed by the current horsepower and crewing constraints, these constraints
are
manageable. We feel these constraints will continue to put pressure on pricing
and the pricing velocity levels going forward should be equal to or above 2005
and 2006 levels. We anticipate our diesel engine services segment’s markets will
remain strong, but we do expect a summer slowdown that is typical for this
segment.”
Mr.
Pyne
further commented, “Our 2006 third quarter forecast is $.42 to $.47 per share, a
24% to 38% increase over reported 2005 third quarter net earnings of $.34 per
share, which included an estimated $.05 per share negative impact from
Hurricanes Katrina and Rita. For the 2006 year, we are maintaining our net
earnings guidance of $1.69 to $1.79, reflecting a 27% to 35% increase over
the
2005 net earnings of $1.33 per share. Capital spending guidance for 2006 is
in
the $125 to $135 million range and includes approximately $55 million for the
construction of 21 tank barges and four towboats.”
This
earnings press release includes marine transportation performance measures
for
both the 2006 and 2005 second quarters and first six months. The performance
measures include ton miles, revenues per ton mile, towboats operated and delay
days. Comparable performance measures for the 2005 and 2004 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.
Page
3 of
7
A
conference call is scheduled at 10:00 a.m. central time tomorrow, Thursday,
July
27, 2006, to discuss the 2006 second quarter and first six months, and the
outlook for the 2006 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 12:00
p.m. central time on July 27 through 6:00 p.m. on Friday, August 25, 2006,
by
dialing 800-642-1687 for domestic callers and 706-645-9291 for international
callers. The conference ID number is 2758959. The conference call can also
be
accessed by visiting Kirby’s homepage at http://www.kirbycorp.com/
or at
http://audioevent.mshow.com/304065.
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 2006 and 2005 second quarters and first six 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. Kirby also 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 large 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, 2005, filed with the
Securities and Exchange Commission.
|
CONFERENCE
CALL INFORMATION
|
|||||
|
Date:
|
Thursday,
July 27, 2006
|
Leader:
|
Steve
Holcomb
|
||
|
Time:
|
10:00
a.m. central time
|
Passcode:
|
Kirby
|
||
|
U.S.:
|
888-328-2514
|
Int’l:
|
706-679-3262
|
||
|
Website:
http://www.kirbycorp.com
or http://audioevent.mshow.com/304065
|
|||||
Page
4 of
7
A
summary
of the results for the second quarter and first six months
follows:
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|||||||||||||
|
Second
Quarter
|
|
Six
Months
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands except per share amounts)
|
|||||||||||||
|
Revenues:
|
|||||||||||||
|
Marine
transportation
|
$
|
204,088
|
$
|
170,742
|
$
|
393,471
|
$
|
327,952
|
|||||
|
Diesel
engine services
|
39,204
|
28,534
|
74,724
|
55,768
|
|||||||||
|
243,292
|
199,276
|
468,195
|
383,720
|
||||||||||
|
Costs
and expenses:
|
|||||||||||||
|
Costs
of sales and operating expenses
|
157,595
|
128,267
|
301,973
|
248,194
|
|||||||||
|
Selling,
general and administrative
|
26,518
|
22,228
|
50,279
|
43,187
|
|||||||||
|
Taxes,
other than on income
|
3,403
|
2,909
|
6,590
|
6,095
|
|||||||||
|
Depreciation
and amortization
|
15,515
|
13,964
|
30,605
|
28,945
|
|||||||||
|
Gain
on disposition of assets
|
(785
|
)
|
(1,795
|
)
|
(942
|
)
|
(1,987)
|
||||||
|
202,246
|
165,573
|
388,505
|
324,434
|
||||||||||
|
Operating
income
|
41,046
|
33,703
|
79,690
|
59,286
|
|||||||||
|
Equity
in earnings of marine affiliates
|
87
|
707
|
553
|
4
|
|||||||||
|
Loss
on debt retirement
|
-
|
(1,144
|
)
|
-
|
(1,144
|
)
|
|||||||
|
Other
expense
|
(134
|
)
|
(400
|
)
|
(68
|
)
|
(716
|
)
|
|||||
|
Interest
expense
|
(3,304
|
)
|
(3,113
|
)
|
(6,002
|
)
|
(6,259
|
)
|
|||||
|
Earnings
before taxes on income
|
37,695
|
29,753
|
74,173
|
51,171
|
|||||||||
|
Provision
for taxes on income
|
(14,362
|
)
|
(11,306
|
)
|
(28,260
|
)
|
(19,445
|
)
|
|||||
|
Net
earnings
|
$
|
23,333
|
$
|
18,447
|
$
|
45,913
|
$
|
31,726
|
|||||
|
Net
earnings per share of common stock:
|
|||||||||||||
|
Basic
|
$
|
.44
|
$
|
.37
|
$
|
.88
|
$
|
.64
|
|||||
|
Diluted
|
$
|
.44
|
$
|
.36
|
$
|
.86
|
$
|
.62
|
|||||
|
Common
stock outstanding (in thousands):
|
|||||||||||||
|
Basic
|
52,450
|
49,890
|
52,268
|
49,814
|
|||||||||
|
Diluted
|
53,411
|
51,284
|
53,208
|
51,224
|
|||||||||
|
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
|
|||||||||||||
|
Second
Quarter
|
Six
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands except per share amounts)
|
|||||||||||||
|
EBITDA:
(1)
|
|||||||||||||
|
Net
earnings
|
$
|
23,333
|
$
|
18,447
|
$
|
45,913
|
$
|
31,726
|
|||||
|
Interest
expense
|
3,304
|
3,113
|
6,002
|
6,259
|
|||||||||
|
Provision
for taxes on income
|
14,362
|
11,306
|
28,260
|
19,445
|
|||||||||
|
Depreciation
and amortization
|
15,515
|
13,964
|
30,605
|
28,945
|
|||||||||
|
$
|
56,514
|
$
|
46,830
|
$
|
110,780
|
$
|
86,375
|
||||||
|
Capital
expenditures
|
$
|
42,760
|
$
|
39,540
|
$
|
64,386
|
$
|
63,563
|
|||||
|
Acquisitions
of business and marine equipment
|
$
|
100,533
|
$
|
7,000
|
$
|
116,773
|
$
|
7,000
|
|||||
|
June
30,
|
|||||||
|
2006
|
2005
|
||||||
|
(unaudited,
$ in thousands)
|
|||||||
|
Long-term
debt, including current portion
|
$
|
285,434
|
$
|
217,638
|
|||
|
Stockholders’
equity
|
$
|
606,047
|
$
|
471,808
|
|||
|
Debt
to capitalization ratio
|
32.0
|
%
|
31.6
|
%
|
|||
Page
5 of
7
|
MARINE
TRANSPORTATION STATEMENTS OF EARNINGS
|
|||||||||||||
|
Second
Quarter
|
Six
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands)
|
|||||||||||||
|
Marine
transportation revenues
|
$
|
204,088
|
$
|
170,742
|
$
|
393,471
|
$
|
327,952
|
|||||
|
Costs
and expenses:
|
|||||||||||||
|
Costs
of sales and operating expenses
|
129,507
|
106,795
|
248,478
|
206,447
|
|||||||||
|
Selling,
general and administrative
|
18,777
|
17,260
|
36,939
|
33,572
|
|||||||||
|
Taxes,
other than on income
|
3,133
|
2,757
|
6,144
|
5,807
|
|||||||||
|
Depreciation
and amortization
|
14,673
|
13,247
|
28,971
|
27,522
|
|||||||||
|
166,090
|
140,059
|
320,532
|
273,348
|
||||||||||
|
Operating
income
|
$
|
37,998
|
$
|
30,683
|
$
|
72,939
|
$
|
54,604
|
|||||
|
Operating
margins
|
18.6
|
%
|
18.0
|
%
|
18.5
|
%
|
16.7
|
%
|
|||||
|
DIESEL
ENGINE SERVICES STATEMENTS OF EARNINGS
|
|||||||||||||
|
Second
Quarter
|
Six
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands)
|
|||||||||||||
|
Diesel
engine services revenues
|
$
|
39,204
|
$
|
28,534
|
$
|
74,724
|
$
|
55,768
|
|||||
|
Costs
and expenses:
|
|||||||||||||
|
Costs
of sales and operating expenses
|
28,078
|
21,473
|
53,485
|
41,742
|
|||||||||
|
Selling,
general and administrative
|
4,640
|
3,240
|
8,562
|
6,350
|
|||||||||
|
Taxes,
other than income
|
136
|
95
|
223
|
205
|
|||||||||
|
Depreciation
and amortization
|
475
|
283
|
814
|
561
|
|||||||||
|
33,329
|
25,091
|
63,084
|
48,858
|
||||||||||
|
Operating
income
|
$
|
5,875
|
$
|
3,443
|
$
|
11,640
|
$
|
6,910
|
|||||
|
Operating
margins
|
15.0
|
%
|
12.1
|
%
|
15.6
|
%
|
12.4
|
%
|
|||||
|
OTHER
COSTS AND EXPENSES
|
|||||||||||||
|
Second
Quarter
|
Six
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands)
|
|||||||||||||
|
General
corporate expenses
|
$
|
3,612
|
$
|
2,218
|
$
|
5,831
|
$
|
4,215
|
|||||
|
Gain
on disposition of assets
|
$
|
785
|
$
|
1,795
|
$
|
942
|
$
|
1,987
|
|||||
Page
6 of
7
|
MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS
|
|||||||||||||
|
Second
Quarter
|
Six
Months
|
|
|||||||||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|||||
|
Ton
Miles (in millions) (2)
|
4,096
|
4,135
|
7,891
|
7,873
|
|||||||||
|
Revenue/Ton
Mile (cents/tm) (3)
|
4.7
|
4.1
|
4.8
|
4.2
|
|||||||||
|
Towboats
operated (average) (4)
|
241
|
241
|
240
|
241
|
|||||||||
|
Delay
Days (5)
|
1,378
|
1,790
|
3,849
|
5,079
|
|||||||||
|
Average
cost per gallon of fuel consumed
|
$
|
1.99
|
$
|
1.55
|
$
|
1.92
|
$
|
1.44
|
|||||
|
Tank
barges:
|
|||||||||||||
|
Active
|
897
|
887
|
|||||
|
Inactive
|
62
|
65
|
|||||
|
Barrel
capacities (in millions):
|
|||||||
|
Active
|
16.7
|
16.6
|
|||||
|
Inactive
|
1.2
|
1.2
|
|
(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 2006 inland marine revenues of $193,905,000 divided by
4,096,000,000 ton miles = 4.7 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