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 25,
2006
Kirby
Corporation
(Exact
name of registrant as specified in its charter)
|
Nevada
|
1-7615
|
74-1884980
|
||
|
(State
or other jurisdiction o fincorporation 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:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ 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
October 25, 2006, Kirby Corporation (“Kirby”) issued a press release announcing
earnings for the three months and nine months ended September 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 third quarters and first nine months is
included in the press release.
|
Item
9.01.
|
Financial
Statements and Exhibits
|
|
(c)
|
Exhibits:
|
| 99.1 |
Press
release dated October 25, 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:
October 26, 2006
|
|
|
|||
EXHIBIT
INDEX
|
Press
release dated October 25,
2006
|
|
KIRBY
CORPORATION
|
Contact:
Steve Holcomb
|
|
|
713-435-1135
|
||
|
|
FOR
IMMEDIATE RELEASE
KIRBY
CORPORATION ANNOUNCES RECORD
2006
THIRD QUARTER AND NINE MONTHS RESULTS
|
·
|
2006
third quarter earnings per share were $.48, a 41% increase compared
with
$.34 earned in the 2005 third quarter
|
|
·
|
2006
first nine months earnings per share were $1.34, a 41% increase compared
with $.95 earned in the 2005 first nine
months
|
|
·
|
2006
fourth quarter earnings per share guidance is $.40 to $.45 versus
$.38
earned in the 2005 fourth
quarter
|
|
·
|
2006
year earnings per share guidance revised to $1.74 to $1.79 versus
$1.33
earned in the 2005 year
|
Houston,
Texas (October 25, 2006)
- Kirby
Corporation (“Kirby”) (NYSE:KEX) today announced record net earnings for the
third quarter ended September 30, 2006 of $25,600,000, or $.48 per share,
compared with $17,285,000, or $.34 per share, for the third quarter of 2005.
The
2005 third quarter results included an estimated $.05 per share negative impact
from Hurricanes Katrina and Rita. Consolidated revenues for the 2006 third
quarter were $264,612,000, a 33% increase compared with $198,741,000 for the
2005 third quarter.
Kirby
reported record net earnings for the first nine months of 2006 of $71,513,000,
or $1.34 per share, compared with $49,011,000, or $.95 per share, for the first
nine months of 2005. Consolidated revenues for the first nine months of 2006
were $732,807,000, a 26% increase compared with $582,461,000 for the 2005 first
nine months.
Marine
transportation revenues and operating income for the 2006 third quarter
increased 23% and 42%, respectively, compared with the third quarter of 2005.
For the first nine months of 2006, revenues and operating income increased
21%
and 37%, respectively, compared with the 2005 first nine months. The results
for
both periods reflected continued strong petrochemical, black oil products and
refined products volumes. Pricing continued to reflect higher rates on contract
renewals and spot market pricing.
Page
1 of
7
The
2006
third quarter and first nine months results were impacted by a continued tight
vessel personnel labor pool and Gulf Coast charter towboat market, principally
due to the effects of 2005 Hurricanes Katrina and Rita. The tight Gulf Coast
labor pool and towboat market resulted in higher vessel personnel wages and
higher rates for chartered towboats. In addition, the tight vessel labor market
has resulted in higher training costs as Kirby has increased the number of
vessel trainees at all levels. The marine transportation operating margin for
the 2006 third quarter was 19.4% compared with 16.7% for the third quarter
of
2005.
Diesel
engine services revenues and operating income for the 2006 third quarter
increased 102% and 154%, respectively, compared with the 2005 third quarter.
For
the first nine months of 2006, revenues and operating income increased 56%
and
96%, respectively, compared with the 2005 first nine months. The record diesel
engine services results reflected the accretive acquisition of Global Power
Holding Company (“Global”) on June 7, 2006 and the acquisition of the assets of
Marine Engine Specialists, Inc. (“MES”) on July 21, 2006, as well as continued
strong marine, offshore oil service, power generation and railroad markets.
Higher service rates and parts pricing implemented during 2005 and in the 2006
first nine months also positively impacted the 2006 third quarter and first
nine
months results. The operating margin for the 2006 third quarter was 15.3%
compared with 12.2% for the third quarter of 2005.
In
the
2006 third quarter, Kirby purchased 163,000 shares of its common stock at a
total purchase price of $4,789,000, for an average purchase price of $29.40
per
share. Kirby has 2,258,000 shares available under its current Board of Directors
repurchase authorization.
Joe
Pyne,
Kirby’s President and Chief Executive Officer, commented, “The business
fundamentals that exist in our marine transportation and diesel engine services
businesses remain the best we have seen in many years. During the third quarter,
we continued to see strong utilization of our tank barge fleet, with essentially
no spare capacity. Pricing continued to improve during the quarter. Our
medium-speed diesel engine services business continued to perform at record
levels, and we added accretive earnings from the Global and MES acquisitions.”
Mr.
Pyne
continued, “Our guidance is based on strong marine transportation and diesel
engine services markets. We also expect the vessel labor and charter towboat
shortages to remain tight during the fourth quarter. These costs will continue
to increase in 2007 at a rate above inflation, but not at 2006 levels. As
multiple-year contracts are escalated and single-year term contracts are
renewed, we should be made whole. Spot market rates already reflect recovery
of
the increased costs. If we had not incurred the increased labor costs and
charter towboat rate increases our earnings would have been higher.”
Mr.
Pyne
further commented, “Our 2006 fourth quarter guidance is $.40 to $.45 per share,
and anticipates some deterioration of operating conditions caused by winter
weather, which historically increases delay days and decreases efficiency.
Our
guidance represents a 5% to 18% increase over reported 2005 fourth quarter
net
earnings of $.38 per share. For 2006, we are tightening our net earnings
guidance to $1.74 to $1.79, reflecting a 31% to 35% increase over the 2005
net
earnings of $1.33 per share. Capital spending guidance for 2006 is in the $138
to $143 million range and includes approximately $60 million for the
construction of twenty-three 30,000 barrel and two 10,000 barrel tank barges,
and four towboats. For 2007, currently scheduled new construction consists
of
twenty 30,000 barrel tank barges and four towboats at a cost of approximately
$56 million. Delivery is scheduled throughout 2007 and into early 2008.”
Page
2 of
7
This
earnings press release includes marine transportation performance measures
for
both the 2006 and 2005 third quarters and first nine 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.
A
conference call is scheduled at 10:00 a.m. central time tomorrow, Thursday,
October 26, 2006, to discuss the 2006 third quarter and first nine months,
and
the outlook for the 2006 fourth 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 October 26 through 6:00 p.m. on Friday, November 24, 2006,
by dialing 800-642-1687 for domestic callers and 706-645-9291 for international
callers. The conference ID number is 8803755. The conference call can also
be
accessed by visiting Kirby’s homepage at http://www.kirbycorp.com/
or at
http://audioevent.mshow.com/311107/.
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 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. 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 large
medium-speed and high-speed diesel engines and reduction gears used in marine,
power generation 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 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,
October 26, 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/311107
|
||||||
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
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands except per share amounts)
|
|||||||||||||
|
Revenues:
|
|||||||||||||
|
Marine
transportation
|
$
|
211,080
|
$
|
172,259
|
$
|
604,551
|
$
|
500,211
|
|||||
|
Diesel
engine services
|
53,532
|
26,482
|
128,256
|
82,250
|
|||||||||
|
264,612
|
198,741
|
732,807
|
582,461
|
||||||||||
|
Costs
and expenses:
|
|||||||||||||
|
Costs
of sales and operating expenses
|
169,407
|
130,265
|
471,380
|
378,459
|
|||||||||
|
Selling,
general and administrative
|
29,321
|
21,600
|
79,600
|
64,787
|
|||||||||
|
Taxes,
other than on income
|
3,289
|
3,203
|
9,879
|
9,298
|
|||||||||
|
Depreciation
and amortization
|
16,689
|
13,725
|
47,294
|
42,670
|
|||||||||
|
Loss
(gain) on disposition of assets
|
(255
|
)
|
24
|
(1,197
|
)
|
(1,963
|
)
|
||||||
|
218,451
|
168,817
|
606,956
|
493,251
|
||||||||||
|
Operating
income
|
46,161
|
29,924
|
125,851
|
89,210
|
|||||||||
|
Equity
in earnings of marine affiliates
|
88
|
1,395
|
641
|
1,399
|
|||||||||
|
Loss
on debt retirement
|
-
|
-
|
-
|
(1,144
|
)
|
||||||||
|
Other
expense
|
(389
|
)
|
(443
|
)
|
(457
|
)
|
(1,159
|
)
|
|||||
|
Interest
expense
|
(4,503
|
)
|
(2,997
|
)
|
(10,505
|
)
|
(9,256
|
)
|
|||||
|
Earnings
before taxes on income
|
41,357
|
27,879
|
115,530
|
79,050
|
|||||||||
|
Provision
for taxes on income
|
(15,757
|
)
|
(10,594
|
)
|
(44,017
|
)
|
(30,039
|
)
|
|||||
|
Net
earnings
|
$
|
25,600
|
$
|
17,285
|
$
|
71,513
|
$
|
49,011
|
|||||
|
Net
earnings per share of common stock:
|
|||||||||||||
|
Basic
|
$
|
.49
|
$
|
.35
|
$
|
1.36
|
$
|
.98
|
|||||
|
Diluted
|
$
|
.48
|
$
|
.34
|
$
|
1.34
|
$
|
.95
|
|||||
|
Common
stock outstanding (in thousands):
|
|||||||||||||
|
Basic
|
52,587
|
50,068
|
52,400
|
49,918
|
|||||||||
|
Diluted
|
53,392
|
51,564
|
53,269
|
51,338
|
|||||||||
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
|
Third
Quarter
|
Nine
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands except per share amounts)
|
|||||||||||||
|
EBITDA:
(1)
|
|||||||||||||
|
Net
earnings
|
$
|
25,600
|
$
|
17,285
|
$
|
71,513
|
$
|
49,011
|
|||||
|
Interest
expense
|
4,503
|
2,997
|
10,505
|
9,256
|
|||||||||
|
Provision
for taxes on income
|
15,757
|
10,594
|
44,017
|
30,039
|
|||||||||
|
Depreciation
and amortization
|
16,689
|
13,725
|
47,294
|
42,670
|
|||||||||
|
$
|
62,549
|
$
|
44,601
|
$
|
173,329
|
$
|
130,976
|
||||||
|
Capital
expenditures
|
$
|
45,728
|
$
|
29,555
|
$
|
110,114
|
$
|
93,118
|
|||||
|
Acquisitions
of businesses and marine equipment
|
$
|
22,652
|
$
|
-
|
$
|
139,425
|
$
|
7,000
|
|||||
|
September
30,
|
|||||||
|
2006
|
2005
|
||||||
|
(unaudited,
$ in thousands)
|
|||||||
|
Long-term
debt, including current portion
|
$
|
326,810
|
$
|
205,737
|
|||
|
Stockholders’
equity
|
$
|
627,229
|
$
|
495,247
|
|||
|
Debt
to capitalization ratio
|
34.3
|
%
|
29.3
|
%
|
|||
Page
5 of
7
MARINE
TRANSPORTATION STATEMENTS OF EARNINGS
|
Third
Quarter
|
Nine
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands)
|
|||||||||||||
|
Marine
transportation revenues
|
$
|
211,080
|
$
|
172,259
|
$
|
604,551
|
$
|
500,211
|
|||||
|
Costs
and expenses:
|
|||||||||||||
|
Costs
of sales and operating expenses
|
132,599
|
110,776
|
381,077
|
317,223
|
|||||||||
|
Selling,
general and administrative
|
19,067
|
16,663
|
56,006
|
50,235
|
|||||||||
|
Taxes,
other than on income
|
3,009
|
3,077
|
9,153
|
8,884
|
|||||||||
|
Depreciation
and amortization
|
15,492
|
12,999
|
44,463
|
40,521
|
|||||||||
|
170,167
|
143,515
|
490,699
|
416,863
|
||||||||||
|
Operating
income
|
$
|
40,913
|
$
|
28,744
|
$
|
113,852
|
$
|
83,348
|
|||||
|
Operating
margins
|
19.4
|
%
|
16.7
|
%
|
18.8
|
%
|
16.7
|
%
|
|||||
DIESEL
ENGINE SERVICES STATEMENTS OF EARNINGS
|
Third
Quarter
|
Nine
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands)
|
|||||||||||||
|
Diesel
engine services revenues
|
$
|
53,532
|
$
|
26,482
|
$
|
128,256
|
$
|
82,250
|
|||||
|
Costs
and expenses:
|
|||||||||||||
|
Costs
of sales and operating expenses
|
36,808
|
19,489
|
90,293
|
61,231
|
|||||||||
|
Selling,
general and administrative
|
7,588
|
3,391
|
16,150
|
9,741
|
|||||||||
|
Taxes,
other than income
|
120
|
91
|
343
|
296
|
|||||||||
|
Depreciation
and amortization
|
824
|
280
|
1,638
|
841
|
|||||||||
|
45,340
|
23,251
|
108,424
|
72,109
|
||||||||||
|
Operating
income
|
$
|
8,192
|
$
|
3,231
|
$
|
19,832
|
$
|
10,141
|
|||||
|
Operating
margins
|
15.3
|
%
|
12.2
|
%
|
15.5
|
%
|
12,3
|
%
|
|||||
OTHER
COSTS AND EXPENSES
|
Third
Quarter
|
Nine
Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(unaudited,
$ in thousands)
|
|||||||||||||
|
General
corporate expenses
|
$
|
3,199
|
$
|
2,027
|
$
|
9,030
|
$
|
6,242
|
|||||
|
Loss
(gain) on disposition of assets
|
$
|
(255
|
)
|
$
|
24
|
$
|
(1,197
|
)
|
$
|
(1,963
|
)
|
||
Page
6 of
7
MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS
|
Third
Quarter
|
Nine Months
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Ton
Miles (in millions) (2)
|
4,045
|
4,027
|
11,936
|
11,900
|
|||||||||
|
Revenue/Ton
Mile (cents/tm) (3)
|
5.0
|
4.3
|
4.8
|
4.2
|
|||||||||
|
Towboats
operated (average) (4)
|
242
|
243
|
241
|
242
|
|||||||||
|
Delay
Days (5) (5)
|
1,200
|
2,080
|
5,049
|
7,159
|
|||||||||
|
Average
cost per gallon of fuel consumed
|
$
|
2.08
|
$
|
1.75
|
$
|
1.97
|
$
|
1.55
|
|||||
|
Tank
barges:
|
|||||||||||||
|
Active
|
903
|
889
|
|||||||||||
|
Inactive
|
53
|
71
|
|||||||||||
|
Barrel
capacities (in millions):
|
|||||||||||||
|
Active
|
17.0
|
16.6
|
|||||||||||
|
Inactive
|
1.0
|
1.4
|
|||||||||||
_____________________
| (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.
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(2)
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Ton
miles indicate fleet productivity by measuring the distance (in miles)
a
loaded tank barge is moved. For 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.
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(3)
|
Inland
marine transportation revenues divided by ton miles. Example: Third
quarter 2006 inland marine revenues of $200,497,000 divided by
4,045,000,000 ton miles = 5.0 cents
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(4)
|
Towboats
operated are the average number of owned and chartered towboats operated
during the period.
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(5)
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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.
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