KIRBY
KIRBY CORPORATION Contact: Steve Holcomb
713-435-1135
FOR IMMEDIATE RELEASE
- -----------------------
KIRBY CORPORATION ANNOUNCES RECORD
2004 SECOND QUARTER AND SIX MONTHS RESULTS
- - 2004 second quarter earnings per share were $.55 compared with $.48 earned
in the 2003 second quarter
- - 2004 first six months earnings per share were $.91 compared with $.77 per
share earned in the 2003 first six months
- - 2004 third quarter earnings per share guidance is $.50 to $.54 versus $.46
earned in the 2003 third quarter
- - 2004 year earnings per share guidance tightened to $1.90 to $1.95 versus
$1.67 earned in the 2003 year
Houston, Texas (July 28, 2004) - Kirby Corporation ("Kirby") (NYSE:KEX) today
announced record net earnings for the second quarter ended June 30, 2004 of
$13,778,000, or $.55 per share, compared with $11,789,000, or $.48 per share,
for the second quarter of 2003. The 2004 second quarter net earnings were
slightly above Kirby's published earnings guidance range of $.50 to $.54 per
share. Consolidated revenues for the 2004 second quarter were $170,876,000
compared with $158,739,000 for the 2003 second quarter.
Kirby reported record net earnings for the first six months of 2004 of
$22,798,000, or $.91 per share, compared with $18,657,000, or $.77 per share,
for the first six months of 2003. Consolidated revenues for the first six
months of 2004 were $328,191,000 compared with $306,939,000 for the first half
of 2003.
Marine transportation revenues increased 9% for the 2004 second quarter compared
with the second quarter of 2003, while operating income increased 14% during the
same period. For the first six months of 2004, marine transportation revenues
increased 9% and operating income increased 18% when compared with the 2003
first half. The favorable results were attributable to strong petrochemical and
black oil products volumes, and normal seasonal refined products volumes, offset
to some degree by weak liquid fertilizer volumes.
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The diesel engine services segment's second quarter 2004 revenues and operating
income were slightly above 2003 second quarter levels. During the 2004 second
quarter, the Midwest dry cargo river market continued to improve and its
operations were enhanced with the April 2004 purchase of the diesel engine
services operations of Walker Paducah. The segment's rail market benefited from
several large orders from transit customers during the 2004 second quarter. A
continued weak Gulf Coast offshore oil service market, as well as weak East
Coast and West Coast marine markets, negatively affected the segment's 2004
second quarter results.
Joe Pyne, Kirby's President and Chief Executive Officer, commented, "We are
encouraged by the continued improvement in our petrochemical and black oil
products markets. The petrochemical and black oil markets contributed 68% and
18%, respectively, of our 2004 first half marine transportation revenues. We
are forecasting net earnings for the 2004 third quarter in the $.50 to $.54 per
share range. This guidance compares with net earnings of $.46 per share
reported for the 2003 third quarter. Our 2004 third quarter guidance is based
on similar petrochemical and black oil volumes, as well as a normal refined
products market and an improved liquid fertilizer market. The third quarter
will be negatively impacted by the closure of the McAlpine lock on the Ohio
River for major repairs for approximately two weeks in August. The lock closure
will stop all waterborne traffic on the Ohio River with a destination upriver of
Louisville, Kentucky, including Cincinnati and Pittsburgh. We estimate the
impact of the McAlpine lock closure on the 2004 third quarter results will be
approximately $.02 to $.03 per share."
Mr. Pyne further commented, "For the 2004 year, we are tightening our earnings
guidance to $1.90 to $1.95 per share. This guidance compares with 2003 year net
earnings of $1.67 per share. Capital spending guidance for 2004 remains in the
$85 to $90 million range and includes approximately $41 million for the
construction 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 2004 and 2003 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 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 9:00 a.m. central time tomorrow, Thursday,
July 29, 2004, to discuss the 2004 second quarter and first six months, and the
outlook for the 2004 third quarter and full 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
approximately 11:00 a.m. central time on July 29 through 6:00 p.m. on Friday,
August 27, 2004, by dialing 800-642-1687 for domestic callers and 706-645-9291
for international callers. The conference ID number is 8949236. The conference
call can also be accessed by visiting Kirby's homepage at
http://www.kirbycorp.com/ or at http://audioevent.mshow.com/178187. 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 2004 and 2003 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. 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 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, 2003, filed with the Securities and Exchange Commission.
CONFERENCE CALL INFORMATION
Date: Thursday, July 29, 2004
Time: 9:00 a.m. central time
U.S.: 888-328-2514
Int'l: 706-679-3262
Leader: Steve Holcomb
Passcode: Kirby
Webcast: http://www.kirbycorp.com/ or http://audioevent.mshow.com/178187
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A summary of the results for the second quarter and first six months follows:
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
---------------------------------------------
Second Quarter Six Months
-------------------- --------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(unaudited, $in thousands except
per share amounts)
Revenues:
Marine transportation. . . . . . . . . . . . . . . $149,065 $137,156 $284,558 $262,221
Diesel engine services . . . . . . . . . . . . . . 21,811 21,583 43,633 44,718
--------- --------- --------- ---------
170,876 158,739 328,191 306,939
--------- --------- --------- ---------
Costs and expenses:
Costs of sales and operating expenses. . . . . . . 108,391 101,153 211,318 202,004
Selling, general and administrative. . . . . . . . 19,479 18,751 39,444 36,312
Taxes, other than on income. . . . . . . . . . . . 4,150 3,485 7,402 6,536
Depreciation and other amortization. . . . . . . . 13,591 12,894 27,388 25,126
Loss on disposition of assets. . . . . . . . . . . 196 126 198 133
--------- --------- --------- ---------
145,807 136,409 285,750 270,111
--------- --------- --------- ---------
Operating income . . . . . . . . . . . . . . . . 25,069 22,330 42,441 36,828
Equity in earnings of marine affiliates. . . . . . 494 751 1,316 1,187
Other expense. . . . . . . . . . . . . . . . . . . (51) (199) (322) (602)
Interest expense . . . . . . . . . . . . . . . . . (3,290) (3,867) (6,664) (7,321)
--------- --------- --------- ---------
Earnings before taxes on income. . . . . . . . . 22,222 19,015 36,771 30,092
Provision for taxes on income. . . . . . . . . . . (8,444) (7,226) (13,973) (11,435)
--------- --------- --------- ---------
Net earnings . . . . . . . . . . . . . . . . . . $ 13,778 $ 11,789 $ 22,798 $ 18,657
========= ========= ========= =========
Net earnings per share of common stock:
Basic. . . . . . . . . . . . . . . . . . . . . . . $ .56 $ .49 $ .93 $ .77
Diluted. . . . . . . . . . . . . . . . . . . . . . $ .55 $ .48 $ .91 $ .77
Common stock outstanding (in thousands):
Basic. . . . . . . . . . . . . . . . . . . . . . . 24,434 24,105 24,392 24,084
Diluted. . . . . . . . . . . . . . . . . . . . . . 25,093 24,412 25,003 24,370
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
--------------------------------------------
Second Quarter Six Months
-------------------- --------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(unaudited, $in thousands except
per share amounts)
EBITDA: (1)
Net earnings . . . . . . . . . . . . . . . . . . . $ 13,778 $ 11,789 $ 22,798 $ 18,657
Interest expense . . . . . . . . . . . . . . . . . 3,290 3,867 6,664 7,321
Provision for taxes on income. . . . . . . . . . . 8,444 7,226 13,973 11,435
Depreciation and other amortization. . . . . . . . 13,591 12,894 27,388 25,126
--------- --------- --------- ---------
$ 39,103 $ 35,776 $ 70,823 $ 62,539
========= ========= ========= =========
EBITDA per share - diluted (1) . . . . . . . . . . . $ 1.56 $ 1.47 $ 2.83 $ 2.57
Capital expenditures . . . . . . . . . . . . . . . . $ 32,013 $ 18,971 $ 56,060 $ 37,723
Acquisitions of businesses and marine equipment. . . $ 9,975 $ 1,500 $ 11,085 $ 37,816
June 30,
--------------------
2004 2003
--------- ---------
(unaudited, $in
thousands)
Long-term debt, including current portion. . . . . . . . . . . . . . . . . $251,453 $295,133
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . $402,622 $343,026
Debt to capitalization ratio . . . . . . . . . . . . . . . . . . . . . . . 38.4% 46.2%
Page 4 of 6
MARINE TRANSPORTATION STATEMENTS OF EARNINGS
--------------------------------------------
Second Quarter Six Months
--------------------- --------------------
2004 2003 2004 2003
---------- --------- --------- ---------
(unaudited, $in thousands)
Marine transportation revenues. . . . . . . . . $ 149,065 $137,156 $284,558 $262,221
---------- --------- --------- ---------
Costs and expenses:
Costs of sales and operating expenses . . . . 92,081 85,050 179,047 168,221
Selling, general and administrative . . . . . 15,228 14,837 30,732 28,620
Taxes, other than on income . . . . . . . . . 4,049 3,342 7,182 6,244
Depreciation and other amortization . . . . . 12,846 12,145 25,862 23,650
---------- --------- --------- ---------
124,204 115,374 242,823 226,735
---------- --------- --------- ---------
Operating income . . . . . . . . . . . . . $ 24,861 $ 21,782 $ 41,735 $ 35,486
========== ========= ========= =========
Operating margins. . . . . . . . . . . . . 16.7% 15.9% 14.7% 13.5%
========== ========= ========= =========
DIESEL ENGINE SERVICES STATEMENTS OF EARNINGS
---------------------------------------------
Second Quarter Six Months
--------------------- --------------------
2004 2003 2004 2003
---------- --------- --------- ---------
(unaudited, $in thousands)
Diesel engine services revenues . . . . . . . . $ 21,811 $ 21,583 $ 43,633 $ 44,718
---------- --------- --------- ---------
Costs and expenses:
Costs of sales and operating expenses . . . . 16,233 16,076 32,167 33,705
Selling, general and administrative . . . . . 3,017 2,994 6,051 5,748
Taxes, other than income. . . . . . . . . . . 91 77 173 160
Depreciation and amortization . . . . . . . . 286 264 619 516
---------- --------- --------- ---------
19,627 19,411 39,010 40,129
---------- --------- --------- ---------
Operating income . . . . . . . . . . . . . $ 2,184 $ 2,172 $ 4,623 $ 4,589
========== ========= ========= =========
Operating margins. . . . . . . . . . . . . 10.0% 10.1% 10.6% 10,3%
========== ========= ========= =========
OTHER COSTS AND EXPENSES
------------------------
Second Quarter Six Months
--------------------- --------------------
2004 2003 2004 2003
---------- --------- --------- ---------
(unaudited, $in thousands)
General corporate expenses. . . . . . . . . . . $ 1,780 $ 1,498 $ 3,719 $ 3,114
========== ========= ========= =========
Loss on disposition of assets . . . . . . . . . $ 196 $ 126 $ 198 $ 133
========== ========= ========= =========
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MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS
----------------------------------------------
Second Quarter Six Months
--------------------- --------------------
2004 2003 2004 2003
---------- --------- --------- ---------
Ton Miles (in millions) (2). . . . . . . . . . 4,321 3,991 8,056 7,446
Revenue/Ton Mile (cents/tm) (3) . . . . . . . . 3.5 3.4 3.5 3.5
Towboats operated (average) (4). . . . . . . . 237 226 234 228
Delay Days (5) (5) . . . . . . . . . . . . . . 1,822 1,268 4,181 3,851
Average cost per gallon of fuel consumed. . . . $ 1.01 $ .81 $ 1.00 $ .91
Tank barges:
Active. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 897
Inactive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 76
Barrel capacities (in millions):
Active. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 16.3
Inactive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 1.4
<FN>
- --------------------
(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) Marine transportation revenues divided by ton miles. Example: Second
quarter 2004 revenues of $149,065,000 divided by 4,321,000,000 ton miles =
3.5 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 tank
barges) during transit. The measure includes transit delays caused by
weather, lock congestion and other navigational factors.
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