HOUSTON, Jan. 28, 2015 /PRNewswire/ -- Kirby
Corporation ("Kirby") (NYSE: KEX) today announced record net
earnings attributable to Kirby for the fourth quarter ended
December 31, 2014 of $68.1 million, or $1.19 per share, compared with $64.3 million, or $1.13 per share, for the 2013 fourth quarter.
Consolidated revenues for the 2014 fourth quarter increased 18% to
$668.3 million compared with
$568.4 million reported for the 2013
fourth quarter. Kirby also reported record net earnings
attributable to Kirby for the 2014 year of $282.0 million, or $4.93 per share, compared with $253.1 million, or $4.44 per share, for 2013 which included a
$0.20 per share benefit due to the
reduction of the United earnout liability. Consolidated
revenues for 2014 were $2.57 billion
compared with $2.24 billion for
2013.
David Grzebinski, Kirby's
President and Chief Executive Officer, commented, "We reported
record results for the fourth quarter and the year with earnings
per share at the upper end of the revised, lower guidance range
provided in mid-December of last year. In the fourth quarter,
utilization in both our marine transportation markets remained in
the 90% to 95% range with good price increases in our offshore
transportation market, but some signs of spot pricing weakness in
the inland market. Also, as we stated when we issued our revised
guidance, in our land-based diesel engine services business, the
sudden and steep drop in oil prices led to some customer
cancellations and delays of projects. However, our marine diesel
engine services business experienced stable demand in the fourth
quarter."
Segment Results – Marine Transportation
Marine
transportation revenues for the 2014 fourth quarter were
$429.4 million compared with
$434.6 million for the 2013 fourth
quarter. Operating income for the 2014 fourth quarter was
$104.2 million compared with
$107.8 million for the 2013 fourth
quarter. The decline in fourth quarter revenue in 2014, as
compared with 2013, was mainly driven by a 13% decline in the
average price of marine diesel fuel which is passed through to our
customers.
Inland marine transportation tank barge utilization remained in
the 90% to 95% range in the fourth quarter. Pricing on renewing
contracts experienced only modest increases and were under pressure
late in the fourth quarter. In addition, high winds and heavy fog
during the quarter drove a year over year increase in delay days in
the Gulf Intracoastal Waterway. Operating conditions throughout the
Mississippi River system were seasonally normal.
The coastal marine transportation markets reflected normal
seasonal impacts and continued strong utilization in the 90% to 95%
range, consistent with the first nine months of 2014 and above the
90% level experienced throughout 2013. Demand for the coastal
transportation of refined products, black oil, including crude oil
and condensate, and petrochemicals remained at healthy levels,
leading to continued favorable term and spot contract pricing.
The marine transportation segment's 2014 fourth quarter
operating margin was 24.3% compared with 24.8% for the fourth
quarter of 2013.
Segment Results – Diesel Engine Services
Fourth
quarter diesel engine services revenues were $238.9 million compared with $133.8 million for the 2013 fourth quarter.
Operating income for the fourth quarter of 2014 was $12.9 million compared with operating income of
$4.7 million for the 2013 fourth
quarter.
The higher revenues and operating income as compared to the
fourth quarter of 2013 reflected improvement in the land-based
diesel engine services market and steady demand for parts sales and
services in the marine diesel engine and power generation markets.
The land-based market benefited primarily from an improvement in
the sale, service and remanufacturing of engines, transmissions and
pressure pumping units. However, the decline in oil prices
resulted in backlog cancellations and order delays late in the
quarter.
During the 2014 fourth quarter, demand in the marine diesel
engine services market remained stable, benefiting from major
service projects along the Gulf Coast and East Coast. The power
generation market benefited from major generator set upgrades and
parts sales for both domestic and international power generation
customers.
The diesel engine services operating margin was 5.4% for the
2014 fourth quarter compared with 3.5% for the 2013 fourth
quarter.
Cash Generation
Kirby continued to generate strong
cash flow during 2014 with EBITDA of $642.6
million compared with $597.7
million for 2013. During 2014, capital expenditures were
$355.1 million, including
$125.7 million for new inland tank
barge and towboat construction, $91.0
million for progress payments on the construction of four
new coastal articulated tank barge and tugboat units ("ATBs"), and
$138.4 million primarily for upgrades
to the existing inland and coastal fleets, as well as the final
costs for the construction of two offshore dry-bulk barge and
tugboat units delivered during 2013. In addition, Kirby purchased a
previously leased coastal tank barge in August 2014 for $6.5
million and two previously leased coastal tank barges for
$25.3 million in October 2014. Total debt as of December 31, 2014 was $716.7 million, reflecting a reduction of
$32.5 million since December 31, 2013, and Kirby's
debt-to-capitalization ratio was 24.0%.
Treasury Stock Purchases
During December 2014, Kirby purchased 187,411 shares of
its common stock at an average price of $81.75 per share under a stock trading plan
entered into with a brokerage firm pursuant to Rule 10b5-1 under
the Securities and Exchange Act of 1934. From January 1, 2015 through January 28, 2015, Kirby has purchased an
additional 1,076,536 shares at an average price of $78.66 per share under the same stock trading
plan, bringing total purchases under the plan through January 28 to 1,263,947 shares at an average
price of $79.12 per share. In
January, Kirby's Board of Directors authorized the repurchase of an
additional 2,000,000 shares, bringing the total unused repurchase
authorization to 3,685,000 shares.
Outlook
Commenting on the 2015 first quarter and full
year market outlook and guidance, Mr. Grzebinski said, "Our
earnings guidance for the 2015 first quarter is $1.05 to $1.15 per share compared with
$1.09 per share in the 2014 first
quarter. Our full year 2015 guidance is $4.50 to $4.70 per share compared with
$4.93 per share earned in 2014. In
our marine transportation markets, the sharp decline in energy
prices has caused the inland market to lose some confidence,
resulting in carriers not pressing rates and shippers testing rate
levels. Given some potential pricing weakness, we are being
cautious with our 2015 pricing expectations. For the coastal
business, our guidance assumes continued healthy utilization levels
and mid-single digit price increases. In our diesel engine services
segment, the significant decline in crude prices has created a high
degree of uncertainty but we remain focused on servicing our
customers, executing the backlog we have, and on cost
reductions."
Mr. Grzebinski continued, "For our marine transportation
business, the longer term fundamentals which support continued
growth in petrochemical and refined products volumes, particularly
the globally competitive feedstock advantage for domestic
producers, remain intact. However, the majority of the expected
benefits from new petrochemical plant openings are not likely to
occur until 2017 and later. If, prior to these benefits emerging,
market disruptions present acquisition or other good investment
opportunities we will look to use our strong balance sheet and
strong cash flow in a disciplined manner. During the fourth quarter
of 2014 and the first part of 2015, we repurchased $100 million or 1,263,947 shares of Kirby stock.
With respect to cash flow, while our 2015 earnings guidance is
lower than 2014, we expect our cash flow to remain strong, as our
2015 guidance includes an increase of approximately $0.15 per share in expenses related to pension
discount rate and mortality table changes, as well as an increase
in other non-cash expenses."
The 2015 capital spending guidance range is $300 to $310 million and includes approximately
$75 million for the construction of
39 inland tank barges and three inland towboats, all expected to be
delivered in 2015. The guidance range also includes approximately
$85 million in progress payments on
the construction of two 185,000 barrel coastal ATBs and two 155,000
barrel ATBs. The balance of $140 to $150
million is primarily for capital upgrades and improvements
to existing inland and coastal marine equipment and facilities, as
well as diesel engine services facilities.
Conference Call
A conference call is scheduled at
7:30 a.m. central time tomorrow, Thursday,
January 29, 2015, to discuss the 2014 fourth quarter and
year performance as well as the outlook for the 2015 first quarter
and year. The conference call number is 800-446-2782 for domestic
callers and 847-413-3235 for international callers. The leader's
name is Sterling Adlakha. The
confirmation number is 38774919. An audio playback will be
available at 1:00 p.m. central time
on Thursday, January 29, 2015,
through 5:00 p.m. central time on
Friday, February 27, 2015, by dialing
888-843-7419 for domestic and 630-652-3042 for international
callers. The passcode is 38774919#. A live audio webcast of the
conference call will be available to the public and a replay
available after the call by visiting Kirby's website at
http://www.kirbycorp.com/.
GAAP to Non-GAAP Financial Measures
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 attributable to Kirby before interest
expense, taxes on income, depreciation and amortization. A
reconciliation of EBITDA with GAAP net earnings attributable to
Kirby is included in this press release. This earnings press
release includes marine transportation performance measures,
consisting of ton miles, revenue per ton mile, towboats operated
and delay days. Comparable performance measures for the 2013 year
and quarters are available at Kirby's website,
http://www.kirbycorp.com/, under the caption Performance
Measurements in the Investor Relations section.
Forward-Looking Statements
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,
2013 filed with the Securities and Exchange Commission.
About Kirby Corporation
Kirby Corporation, based in
Houston, Texas, is the nation's
largest domestic tank barge operator transporting bulk liquid
products throughout the Mississippi River System, the Gulf
Intracoastal Waterway, coastwise along all three United States coasts and in Alaska and Hawaii. Kirby transports petrochemicals, black
oil, refined petroleum products and agricultural chemicals by tank
barge. Through the diesel engine services segment, Kirby provides
after-market service for medium-speed and high-speed diesel engines
and reduction gears used in marine and power generation
applications. Kirby also distributes and services diesel engines,
transmissions, pumps, compression products and manufactures and
remanufactures oilfield service equipment, including pressure
pumping units, for land-based pressure pumping and oilfield service
markets.
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Year
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
(unaudited, $ in
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Marine
transportation
|
$
|
429,424
|
|
$
|
434,600
|
|
$
|
1,770,684
|
|
$
|
1,713,167
|
Diesel engine
services
|
238,873
|
|
133,797
|
|
795,634
|
|
529,028
|
|
668,297
|
|
568,397
|
|
2,566,318
|
|
2,242,195
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Costs of sales and operating
expenses
|
451,016
|
|
365,548
|
|
1,694,882
|
|
1,448,805
|
Selling, general and
administrative
|
55,422
|
|
49,431
|
|
210,416
|
|
177,766
|
Taxes, other than on
income
|
3,772
|
|
3,304
|
|
16,677
|
|
15,893
|
Depreciation and
amortization
|
44,436
|
|
41,530
|
|
169,312
|
|
164,437
|
Gain on disposition of
assets
|
(156)
|
|
(160)
|
|
(781)
|
|
(888)
|
|
554,490
|
|
459,653
|
|
2,090,506
|
|
1,806,013
|
Operating
income
|
113,807
|
|
108,744
|
|
475,812
|
|
436,182
|
Other
income
|
125
|
|
132
|
|
39
|
|
368
|
Interest
expense
|
(5,149)
|
|
(5,971)
|
|
(21,461)
|
|
(27,872)
|
Earnings before taxes on
income
|
108,783
|
|
102,905
|
|
454,390
|
|
408,678
|
Provision for
taxes on income
|
(40,310)
|
|
(37,646)
|
|
(169,782)
|
|
(152,379)
|
Net earnings
|
68,473
|
|
65,259
|
|
284,608
|
|
256,299
|
Less: Net earnings
attributable to noncontrolling interests
|
(422)
|
|
(992)
|
|
(2,602)
|
|
(3,238)
|
|
|
|
|
|
|
|
|
Net earnings attributable to
Kirby
|
$
|
68,051
|
|
$
|
64,267
|
|
$
|
282,006
|
|
$
|
253,061
|
|
|
|
|
|
|
|
|
Net earnings per
share attributable to Kirby common
stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.19
|
|
$
|
1.13
|
|
$
|
4.95
|
|
$
|
4.46
|
Diluted
|
$
|
1.19
|
|
$
|
1.13
|
|
$
|
4.93
|
|
$
|
4.44
|
Common stock
outstanding (in thousands):
|
|
|
|
|
|
|
|
Basic
|
56,723
|
|
56,429
|
|
56,674
|
|
56,354
|
Diluted
|
56,892
|
|
56,646
|
|
56,867
|
|
56,552
|
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
|
|
|
|
|
Fourth Quarter
|
Year
|
|
2014
|
2013
|
2014
|
2013
|
|
(unaudited, $ in
thousands)
|
EBITDA: (1)
|
|
|
|
|
Net earnings attributable to
Kirby
|
$ 68,051
|
$ 64,267
|
$ 282,006
|
$ 253,061
|
Interest expense
|
5,149
|
5,971
|
21,461
|
27,872
|
Provision for taxes on
income
|
40,310
|
37,646
|
169,782
|
152,379
|
Depreciation and
amortization
|
44,436
|
41,530
|
169,312
|
164,437
|
|
$
157,946
|
$
149,414
|
$
642,561
|
$
597,749
|
|
|
|
|
|
Capital
expenditures
|
$ 121,046
|
$ 46,180
|
$ 355,144
|
$ 253,227
|
Acquisitions of
businesses and marine equipment
|
$ 25,300
|
$
-
|
$ 31,800
|
$ 3,643
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2014
|
2013
|
|
|
|
(unaudited, $ in
thousands)
|
Long-term debt,
including current portion
|
|
|
$ 716,700
|
$ 749,150
|
Total
equity
|
|
|
$ 2,264,913
|
$ 2,022,153
|
Debt to
capitalization ratio
|
|
|
24.0%
|
27.0%
|
MARINE
TRANSPORTATION STATEMENTS OF EARNINGS
|
|
|
Fourth
Quarter
|
Year
|
|
2014
|
2013
|
2014
|
2013
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
Marine transportation
revenues
|
$ 429,424
|
$ 434,600
|
$ 1,770,684
|
$ 1,713,167
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Costs of sales and operating
expenses
|
253,426
|
257,386
|
1,053,390
|
1,029,040
|
Selling, general and
administrative
|
28,306
|
28,725
|
119,087
|
112,272
|
Taxes, other than on
income
|
2,970
|
2,847
|
14,324
|
14,026
|
Depreciation and
amortization
|
40,518
|
37,850
|
154,019
|
149,574
|
|
325,220
|
326,808
|
1,340,820
|
1,304,912
|
|
|
|
|
|
Operating income
|
$
104,204
|
$
107,792
|
$
429,864
|
$
408,255
|
|
|
|
|
|
Operating margins
|
24.3%
|
24.8%
|
24.3%
|
23.8%
|
|
|
|
|
|
|
|
|
|
|
DIESEL ENGINE
SERVICES STATEMENTS OF EARNINGS
|
|
|
|
|
Fourth
Quarter
|
Year
|
|
2014
|
2013
|
2014
|
2013
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
Diesel engine
services revenues
|
$ 238,873
|
$ 133,797
|
$ 795,634
|
$ 529,028
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Costs of sales and operating
expenses
|
197,590
|
108,162
|
641,492
|
419,765
|
Selling, general and
administrative
|
24,585
|
17,691
|
80,309
|
53,595
|
Taxes, other than
income
|
792
|
444
|
2,307
|
1,805
|
Depreciation and
amortization
|
2,979
|
2,764
|
11,463
|
11,096
|
|
225,946
|
129,061
|
735,571
|
486,261
|
|
|
|
|
|
Operating income
|
$
12,927
|
$
4,736
|
$
60,063
|
$
42,767
|
|
|
|
|
|
Operating margins
|
5.4%
|
3.5%
|
7.5%
|
8.1%
|
|
|
OTHER COSTS AND
EXPENSES
|
|
|
|
|
Fourth
Quarter
|
Year
|
|
2014
|
2013
|
2014
|
2013
|
|
(unaudited, $ in
thousands)
|
|
|
|
|
|
General corporate
expenses
|
$
3,480
|
$
3,944
|
$
14,896
|
$
15,728
|
|
|
|
|
|
Gain on disposition
of assets
|
$
156
|
$
160
|
$
781
|
$
888
|
MARINE
TRANSPORTATION PERFORMANCE MEASUREMENTS
|
|
|
|
|
Fourth
Quarter
|
Year
|
|
2014
|
2013
|
2014
|
2013
|
Inland Performance
Measurements:
|
|
|
|
|
Ton Miles (in
millions)(2)
|
3,326
|
2,869
|
13,088
|
11,754
|
Revenue/Ton Mile
(cents/tm)(3)
|
8.5
|
10.0
|
8.8
|
9.8
|
Towboats operated
(average)(4)
|
247
|
253
|
251
|
256
|
Delay
Days(5)
|
1,770
|
1,985
|
7,804
|
7,843
|
Average cost per
gallon of fuel consumed
|
$ 2.83
|
$ 3.26
|
$ 3.06
|
$ 3.21
|
|
|
|
|
|
Barges
(active):
|
|
|
|
|
Inland tank
barges
|
884
|
861
|
Coastal tank
barges
|
69
|
72
|
Offshore dry-cargo
barges
|
6
|
8
|
Barrel capacities (in
millions):
|
|
|
Inland tank
barges
|
17.8
|
17.3
|
Coastal tank
barges
|
6.0
|
6.0
|
(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 attributable to Kirby 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: Fourth
Quarter 2014 inland marine transportation revenues of $283,548,000
divided by 3,326,000,000 inland marine transportation ton miles =
8.5 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 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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visit:http://www.prnewswire.com/news-releases/kirby-corporation-announces-record-2014-fourth-quarter-and-year-results-300027333.html
SOURCE Kirby Corporation