Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Kirby Corporation 2022 Fourth Quarter Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. We ask that you limit your questions to one question and one follow-up. [Operator Instructions] Please note this is being recorded.

to conference like to now would turn over the Mr. I Relations Kirby's VP Niemietz, and of Kurt Investor Treasurer. ahead. go Please

Kurt Niemietz

www.kirbycorp.com. Good our morning conference was Executive can and today thank slide release, President you for joining which Officer. Financial well website Grzebinski, Kumar, Executive found A President be as and Raj earnings Chief are for us. today, Kirby's and as and issued Chief today's at earlier Officer; presentation Kirby's on Vice call, David With me the

this may of Investor or non-GAAP Financials. most During we earnings adjusted and also financial measures financial the press non-GAAP call, to certain our are financial available conference refer to included section GAAP measures. the directly the on Relations under in release in are our Reconciliations comparable measures website

this events. statements reasonable reflect statements conference with reminder, statements. are future respect management's future a contained to to forward-looking respect call the As These judgment with in

risk risks from of results pandemic and the actual impact the the these of and year uncertainties, our the our in as XXXX Forward-looking various including be made of December business. can XX-K company's time-to-time. for anticipated statements list result on those A the Kirby Corp’s ended filings other involve factors, in SEC and materially COVID-XX XX, found from with Form differ factors could a

I will now turn to David. the call over

David Grzebinski

Thank you, everyone. Kurt, good and morning,

portfolio. or business. on and details earlier XXXX value initiated fourth moment Board alternatives, advisors range legal is a keenly and quarter Distribution the Kirby’s and and in shareholders our full-year this with the and Services process Board like we of a on financial The to touch a of independent the early support including into for to reviews manages a I'd sale a month. of potential get of review take actively we spin-off press Before regularly focused results, release The maximizing issued our to

and with potential the enhance value on financial and that concluded distribution shareholder transportation including conditions, business. number under exploration is counterparties, Following market to a both current to options, strategic Board continue a of way potential for financial marine execute of plan to discussions thorough the best service strategic our the

value all always, to we'll to And do maximizing so. remain opportunities committed to evaluate shareholders. continue for As we

know, financing to is of But as you environment strategics transactions. the both ability difficult and the impacting and consummate pursue sponsors

is and have unique both capabilities and financial position growth our deep our results strong XXXX. long-term of performance deliver expertise operating This operational businesses underscored that We and enhanced to by performance. in

bright these and prospects company's continuing look a to segments strength. position to We are the of by two the forward operate encouraged businesses from of

adjusted turning well as higher weather significantly year-over-year. The chain services, seasonal water per of and during Now the $XXX deliveries in slowness, quarter's today, quarter Earlier by delayed of share. distribution ongoing million and adjusted This quarter and income marine that results. earnings fundamentals compares supply and revenue financial low our fourth performed share. conditions, $X.XX of revenue delivering market quarter $XXX services. as offset announced we Both partially of of fourth distribution per and XXXX steady both fourth million to in results to $X.XX reflected revenue unfavorable segments our transportation earnings normal and well and challenges operating

range prices with XX% Marine and strong barge to range. overall led pressures, continued supply Inland to of upward put running XX% prices coupled low single-digits with the demand market with utilization in year-over-year. utilization the In on spot strong our due sequentially transportation, inflationary demand pressure steady limited conditions, to and up XX% refinery barges Tight the in in

on with low range for the conditions ago. significant teens increased XX% the improved revenues quarter versus conditions XX% as year-over-year margins in operating Mississippi up Overall, Term fourth River, contracts the as made to in weather water the and reviewed winter a onset of Inland the XX% in quarter difficult days. increase into year a range. well Low also delay

While the reaching started we we and witness continue their headwinds moderation margins to some since improve inflationary continue quarter, operating with to pressure highest pace XXXX. in to level

and In our utilization sequentially. to mid-XX% some conditions in market to spot pricing in dry range Overall, operating the low our in contributed coastal, also single-digits. revenues the fourth increased X% low margins. steadily cargo margins in and and the with business low operating improved incremental shipments up with increased quarter gains mid-single-digits barge revenues prices were to coastal Better improved coal year-over-year

continued sequentially markets pumping and our pressure and equipment new demand revenues equipment generation Services, driven year-over-year, In e-frac. with power and remained across Distribution orders by manufacturing, strong environmentally friendly backlog. and in In for healthy for growth up our were demand

However, issues as quarter. delayed many equipment the during expected, new supply deliveries chain significant

continued We continue to to work chain diligently manage supply challenges.

generation fourth demand our strong chain summary, Industrial our weather fundamentals highway solid overall is and The rates across Inland demand marine strength market businesses meaningful In the In from coming market, nicely, quarter both reflected and are continued in power and sectors. market supply remains Commercial and with challenges. for different on despite repair, is growth results higher. moving segments, our inflecting

market While the by coastal dynamics. industry-wide near-term challenged supply remains

rate barge we've Our good improvements. is modest utilization and realized

market foreseeable in backlog, further for are future, Distribution Services supply the our to outlook strong. growth to issues in persist expected for while demand and is the the Strong chain contributing is

We into needs growth continue and on drive to responsibly earnings to and efficiently incremental focus and and exceed customer XXXX expect to working into XXXX. our meet safely,

more our results fourth outlook to balance I'll the I'll over but discuss sheet. call segment the later, talk to and about turn first the quarter Raj

Raj Kumar

$XX or and increased revenues quarter marine $XX were Compared In of revenues quarter operating third XXXX, to of operating margin marine income you, by or down fourth revenues was marine with increased XX% million million good million XXXX, $XXX increased XX%. $XX quarter and XXXX, income X% XX%. of fourth were of million an and everyone. and transportation to compared operating morning, income the operating the Thank XX.X%, David,

River weather by operations. along freezing factors demand quarter partially as As David Coast ¸as were the underlying the mentioned, pricing. and that customer well solid the conditions negative Gulf made utility plant refinery the offset These and on historic low improved curtailed negatively Mississippi water in impacted

contributed business utilization approximately Long-term of XX% the in barge in in from is XXXX. revenue term quarter to XX% range from mid of of XX% for longer of in segment with time XX% the XXXX, fourth the charters the quarter, Inland utilization similar range or to to approximately revenue. those year contracts affreightment. marine contracts third which quarter was Inland contributed the one or and of contracts The transportation the the seen compares XX% Average and of high-XX%

rates On to Term the mid-XX% range, in and contracts XX% single-digits sequentially in in XX% to conditions fourth increasing the during year. the low contributed spot renewed low quarter market compared to to the Difficulty]. average that Improved the [Technical market range year-over-year. prior

XXXX, up to third unfavorable revenues to term Compared year-over-year. Inland driven diesel of increased primarily weather. utilization, to increased higher pricing quarter XXXX, was Mississippi cost X%, on rebuilds and XX%, by were Inland fuel Compared and quarter to increased revenues winter operating due XX% River as the down spot the barge fourth per the due and contract low water conditions of average the

increase sequential Inland by operating XXX% margins were delay in impacted negatively days.

in as of coastal to days sequentially and revenues and XX% range, quarter utilization the pricing. Average inflationary low more coastal for both in segment. However, XX% the year-over-year the was cost were of XXXX. fourth and represented in which margins improved The delay the by Transportation in to Marine were than compares headwinds low-teens mid-XX% range business barge gains the offset the

spot in year-over-year. under teen term coastal revenue During in of the higher contracts XX% the rates term mid-single-digit market approximately and low the which of contracts to charters. of Average percentage range time low were quarter, sequentially approximately up XX% the were was renewals were

low coastal year-over-year prices increased single-digits. had field operating utilization, higher margin with positive quarter, rebuilds. revenues in Overall, the X% During barge a and higher coastal improved contract the

both With projections Coastal in our Inland and fleet XXXX. website. our a reconciliation is in for presentation This respect posted call changes tank to well the for as quarter, have provided on as our barge of we fourth the included businesses, earnings the

$XX million, Distribution and saw million or well Services by $X.X decreased Revenues compared when in XXXX and XX% XXX%, by $XXX seasonal with million increased the of X% and revenue or was income or XXXX, some operating supply quarter as million the the fourth delays, increasing segment to of quarter income as $XX by by the chain XXXX, performance segment. revenue revenues third $X.X income with to fourth slowness the million review and of $XX compared for decreased attributed of Distribution sequential operating I'll were quarter decrease income Services to operating Now ongoing activity. of operating The the million.

the in increase and increased activity new and parts demand XX% entrants oil completions the year-on-year strong revenues. a market, gas In contributed rigs quarter. We commodity and throughout prices for to and experienced favorable

manufacturing David supply low segment operating to the had mentioned, our revenue trends tough navigate a the quarter the continue business. XX% of and in favorable As gas approximately we orders backlog. Despite experienced margins in especially in chain Overall, continued business the chain manufacturing and oil new single-digits. represented supply fourth and in headwinds, environment,

in commercial by On the improved equipment, commercial generation year-over-year. Compared and revenues on businesses. to repair XXXX, marine demand revenues to parts X%. service Power contributed for was of XX% activity third increased industrial with up and also and year-over-year our an in highway strong increase industrial side, quarter and

to due chain King constraints Thermal supply Our delays that experience impacted growth. continued business revenue to

offset during headwind commercial margin was and power revenue repair. fourth business activity single-digits marine, Overall, an of the and on-highway approximately quarter. increased segment the had and this the industrial high operating However, by in XX% in generation represented

sheet. Now balance I'll turn to the

billion debt ratio As $XX of of at our to million December debt with XX.X%. to $X.X XX, improved capital total we cash had and

of had to equipment. $XXX.X million. sales from of capital $XX.X from and cash quarter, hand related of equipment on primarily and expenditures of generated flow or the cash proceeds We retired During to of asset marine used cash cash operations CapEx, flow maintenance $X we million we fund million

the quarter, the strategic decreased the stock There with associated no During given company's was debt company of the $XX during quarter blackout we million. repurchases review. by

XX, liquidity As $XXX have we available approximately million. of December total of

$XXX to flow expect from operations of we to million $XXX XXXX, generate For million. cash

continue near-term, and orders of to working unwind shipped that We in as this are capital XXXX through capital constraints supply to challenging working most XXXX. the chain we into but work in expect

later CapEx we and shipyards more the expected clarity on of this respect provide on guidance including chain year plan to CapEx, XXXX planned supply projects, gain With impact we as further delays. to

to balanced niche to flow committed a to capital continue to allocation pursue creating capital will use this and value and investment are approach acquisition opportunities. cash opportunistically return long-term the We and shareholders

now of to for XXXX. discuss I the to turn outlook David call the our remainder back will

David Grzebinski

Raj. you, Thank

by part in to continue In and construction expect large we are further Marine combined first As and utilization support high discussed, barge segments continue demand Inland chemical utilization with rate our to to we achieved barge refinery quarter. inflationary that strong should plant support new the utilization. increases. fourth both pressures driven expected steady quarter results high into in Limited

While encouraging, of all of this is we landscape the ever-changing and mindful economic the potential recession. very are

increase plant an running which expect our is barge to Barge spot XX% to new currently activity continue remain to in utilization is mid-XX% to in of drive market, refinery dynamics the factors are construction We demand our and future. as expected the favorable with XXXX. customer revenues. high there positive for approximately minimal volumes. to These further barge in These foreseeable contribute improvements expected represents supply Inland low the expected and petrochemical constrained are in to availability

pricing also expect continued renewals year. occur We contract term in throughout improvement as the

expect Inland throughout Inland XXXX ending margins, mid-teens expect XX%. will we the the not to to in year-over-year the if and continue approximately near-term grow year Overall, below gradually double-digits average operating revenues to improve close and

expected expected in remain remain Kirby's the but range. barge by utilization conditions market to the is challenged across barge industry. to are Even some Coastal, somewhat coastal mid-XX% market low remain In capacity with near-term will steady, underutilized softness to

of business, in Full-year shipments to be revenues dry doubling be plant, installations, expected near continued XXXX. business maintenance the low for and XXXX expected coal core full-year are by in almost to single-digits water good cargo by offset coastal year-over-year, are primarily breakeven our higher Operating driven company's treatment ballast to coastal basis. are driving our days, compared to and flat on maintenance fundamentals liquid a which an cargo margins

counts business. anticipated expected parts service backlog are prices, distribution distribution for In we [Indiscernible]. outlook well demand and Looking rig completions to market, and growing and distribution with at and gas high the favorable oil -- yield have and the equipment services, products demand and service parts a growing commodity increased and manufacturing for a strong in OEM strong activity

further continue which to increase increases environment expect We average commodity XX% rig the will rig in counts rigs, expect grown to count of growth U.S. over approximately activity XXXX. in have XXX into represented a price frac XXXX XXXX. to current in we full-year contribute and that and land

quarters chain we a expect with new are issues year These which between from in XXXX in is product challenge. see we OEM we issues the expect and mentioned cases are position. have increasing approaching this even extending engine expect In that some We a likely manufacturing, supply long into I and Similarly, deliveries, parts demand to contribute we perhaps to active new frac fourth spread With equipment, this a distribution. continue times to in and could added lead choppiness for which As count and to XXXX. shift incremental backlog orders earlier, beyond four remain will service quarter growing XXX. growth, trend the in potentially some

Commercial increased bus for on-highway on-highway municipal work, are demand by in Industrial, ridership demand offset In we repair with products refrigeration and delays. improvement and lingering Thermo in increased King steady supply and chain continued forecasting

power and strong XX/X and Coast. electrification with service is Mexico power are increasing East repair grows. the new power markets West demand also and to commercial parts to installations, remain the as In activity expected solid expected of in for improved be and activity Gulf generation, Marine on backup

full-year, range XXXX low-double-digit expect For growth we the and in industrial. for revenue the commercial

to chain XXXX remainder. Commercial to oil new XXXX. equipment continue will in are and compared and and approximately issues by distribution product While With revenues of to and the supply Industrial expected XX% services, revenues impacting we XX%, increase XX% representing and expect representing gas segment segment deliveries

We to in expect segment the high-single-digits be operating margins will mid for XXXX.

to year the improvement exited our both ongoing challenges. fundamentals conclude, value. of team very objectives, year performed as the revenue We our operating and improved To during on our well Kirby's our in as Both executed continue healthy and well showed with well well steady income results delivering XXXX base both the near-term long-term long-term for strategy. positioned they're and businesses delivering segments

and businesses recession. potential markets closely see results, the continuing are will we for we expect favorable improved a Although our financial provide monitoring

long-term, of our businesses strong as and creation. value We are driving with core the confident are said we Having that, shareholder continue we capitalizing strategy. on market in our we intend long-term strength and -- look to confident fundamentals

remarks. this concludes Operator, prepared our

ready now questions. are take We to

Operator

Jack Instructions] Stephens. first the with We Our question-and-answer now will begin session. [Operator from question comes Atkins

line now is Your open.

Jack Atkins

guys work Okay, opportunity on the congratulations great. morning. And able being on really to capitalize there. Good the in pricing fourth Nice quarter.

your us soft sort baked of, landing, of guess, kind I outlook get us I recession, we sort help are Raj, the about tag you one. as think about So of would and of, But mild to about, think factoring to what's of there, you may in in this any, you about landing, want that? can hard kind team think of as sort you help love kind XXXX thoughts David think

do above you both be cost degree continued in kind baked items of support like of inflationary us rate of your Inland able to into Can going renewals to walk to feel is XXXX? you And in those what what's outlook through then increases. for the market terms

David Grzebinski

the again that it in to chemicals but sure, in is the Well, little market has now. really a fundamentals We're -- in fourth with of knows enough see Inland I strong. look, Yes, as the quarter, to impact started utilization not to strong refinery Jack. mean, be picture. everybody come seeing continued We pullback demand kind back right did strong. quarter, particularly first but are Demand the

is And supply prices new because really equipment justifying construction. even very aren't strong So rates new are the to building Nobody's anywhere close better. substance. still [Indiscernible] demand the of the high, picture any on picture is

a -- of there's years then hitting number shipyard big a or next about years. good Inland about ago. And built there's it's it's that's maintenance a But bubble built a the most two entire for of the five-year process portion and major were the of were industry one, them barges really

pretty is in schedule industry maintenance ‘XX to the going hit and So heavy ‘XX.

to tight. going help remained really actually that's So availability barge

strong Inland, it's about we've supply balance. the It's when ever terms look of and as for strong. very it seen demand in at So we outlook as

saying, environment is if think capacity. replacement by long continue That we're of a demand we increase at for justify in that's and I that We to our look factor didn't as to the going look the way, it products, So big we way to, the rates at going rate We needs if as us. we that Jack. demand get all. think guidance. said, as ever ‘XX, -- through of weakness. to recession power most We continue all down factor use this as could a supply we’ll mild into and not phrase really we've about sharp position. it through it's recession get to even a recession. should our about strong think impact economic It's And did said, a That with seen, that our we potential a

Jack Atkins

what's really Okay, the me stock. us it's this dig valuation case generating -- to there a maybe to that's helpful. give free gears, very for to give of perspective? you and Thank cash you range? kind at from into are XXXX part are guess CapEx a help terms walk a I'd think maybe, folks why in Can very of I sort going you kind CapEx if are important Raj, cash on that. David. maybe of outlook around not guys trying of a providing us possible Any I strong time? moment. you flow. comfortable through of the To the can CapEx a shifting the for That's of, kind like And for And you comment all flow

Raj Kumar

seeing Yes, with, an you. days to maintenance shipyards we're across that both cash offshore, thank strong but loan we're -- and David absolutely free the Inland it’s that you're we're is for as Inland phenomenon well have to as up going XX% generate seeing Yes, flows, very industry-wide it’s going the to morning. board, deal good is Jack, We XX%. right? mentioned Yes, right. like the

So of inflationary We've us CapEx We're also issues. we're dealing chain spend, well now. situation the that with dealing seeing. as with some supply this also we're pressures impacted other as right whatever

right -- takes. should it be you lot a think number, We But number. a is out, in do to meaningful in very puts we're that. be to give position a CapEx should The of are CapEx better number team able more real now, now, and to right not to we I position there So soon. a CapEx be provide able penciling

David Grzebinski

Yes.

just Jack, from free to cycle think, to still be about of is strong. I you here authorization that maintenance of working got Obviously, pretty that. in add would operations share just flow. the we're cash we're to saw through. I But Look, you terms repurchase deployment that. CapEx tell the Obviously, going we've cash excited

by As now kind you opportunities, parts right the go Kirby. at look company is best of,

So it. we first we're And pretty the excited progress we'll quarter. updates as through about have

Jack Atkins

briefly And that a you a flow little free of not uncertainty strong though wouldn't is Is follow-up in I bit There's still cash reason be generator CapEx scenario just you though, even be. not this still to year. would in generate there's on be cash position XXXX correct? around why there free the flow healthy very where should that really what to a mean, of any

David Grzebinski

good Yes, cash we’ll flow. Right. we free think have

Raj Kumar

Jack. statement, that's think fair I a Yes,

Jack Atkins

appreciate Thank guys. Okay, Really the for it. time okay. again you

Operator

next Please standby question. our for

question Ken Bank of next Hoexter comes Our America. from with

open. line Your now is

Nathan Ho

for Hoexter. dialing Ken Great guys. Ho Nathan quarter in is This Great.

your off the We're on -- Inland pressures back on comments little to bit side. coming items the Just where and were on recalling on XX% of the November Dave's cost some above. strong just update inflationary up inflationary a

of does of cost see management this commodity rates the with turning new affect for Inland sees And XXXX? costs, backdrop normalizing margins Just how that XX% exit wanted XXXX? into to the how team

David Grzebinski

traditionally prices But still look food those a still you we Yes. as is for grow No, haven't most had. but lot at when feel. I marine further us crews, than we've our are it's of up. inflation here any is higher inflation I But look, -- we would haven't tell they up think further. it's seen XX%, gone What on

it's airline are still the you up on boats radars for look example, cars or transportation, or from, things at those rental our If of, kind anything costs are significantly crew whether flights, norms electronic-related, up.

didn't remarks, would I state but in right come this hasn't prepared but further. maybe What inflation say, down, our grown we it hasn't any

contract, as last from that's prices to we like we seen were much up kind just flattish quarter. So them seen but not abating, of really haven't were say we've as go they they where

to our remarks in inflation and of that margin needed we've end help obviously Obviously, we profile of with the get the that in our year. anymore, up grow kind check just increases helps. would doesn't and So stays If about inflation. prepared terms in price to where of talked keep

goes have Fed see going adverse right an flattening kind it's feel Now good things tame what very now are that being Obviously, up pretty margins. to will and aggressive inflation to effect obviously if But inflation. of the further, out. we that's today to do they

So that's good and trip a us we it recession. bad. Obviously, into doesn't hope

Nathan Ho

clarify, to for of cost in And segments, on into baking Would just set correct? that's the XXXX structure across the margin be that year? flattish this see. sort targets a I

David Grzebinski

in general terms flattish Yes, inflationary. of

we're going go to I obviously, crew labor up. have costs think,

We of to headwinds. that that is seeing we've right We in little in. any going chain. factored If factored don't to supply have of of continue bit the obviously think is stay now, will the we'd But that happen. they think everybody are little where our I gets inflationary anticipate of across at. But pressures labor rest acute, labor a increases sharp rise. costs a But we kind inflation. some price just most it

Nathan Ho

opportunities on works. say, in still XXXX? the is are of XXXX. into availability how that Great. seeing viewing, as CapEx any you deployment, plan there strategy the But are the follow-up updates of on capital aware And terms M&A just a on How capital the the into I'm company here? is

David Grzebinski

particularly look, history you, had us But Board the comment best company good as for When feel and large in out we've Yes. market. right as marine those, It's about in That to too, we the tell the long look I prospects consolidate barge we've [Indiscernible] now is at we said, there but in would look, distribution to and there. there. any always a is there business, tank are not like of while. and opportunities best our seen out I are Inland on Kirby. buy strongly our does our it’s to opportunities

So we're quite believe that just one excited multi-years. to it's year, It's we of, going and be not kind a phenomena.

look So when for factoring good acquisitions, pretty we're deployment in Kirby capital looks we at right now.

Nathan Ho

Got it. Thanks again for the time.

Operator

Please next question. standby our for

Our next comes Lewis Greg question from BTIG. with

Your open. line is now

Greg Lewis

creating month, about, think actually face should we of guess. ongoing to of, embargo What setup Yes. are on the everybody, industry follow an opportunity activity and year? about in coming we a there part But some about think type question. on that potential did or challenges about DGO. the products kind have it's obviously, in products we guess, the of that, touch changes We're does you that out see oil good of to about hearing feedstock? any refinery Hi, be problems to refining at good first next that industry [Indiscernible] a are this and the morning, going that you lot market that's coming find and or little us of looking thinking in Russian thanks to dynamics might and with groove. taking in starting want my that lot February a of as of I Definitely I or thank bit its is the, think challenges, way to can kind to as for is how more I than

David Grzebinski

Yes.

too the really is strongest reasons type strong I competitors break seen Let's is don't few ever volumes look I a export it reopening, a want customers. of refined moves lot get obvious now. we've Probably But complex we're right product and is look, in. -- very, now. of of strong seeing also good. refinery right for Yes, for trade very kind that pretty think into with to our specific Demand refinery lines. the

still probably had cracks pulling still refiners little look, complex the the So efficient spreads U.S. most bit, spreads the and crack a in of pretty And is but they're great world. in back the refinery strong. are traditional in terms they're the

refineries I think in situation. home that's Europe, another a

in if it's to really position obviously, then in Europe same, efficient high energy that were brand and chemical built Good really or it's plants more very got The pivot is new plants And chemicals four, you natural position. last suffering the one, you've right? complex the the feedstock high, five in years. gas price chemicals, recently price is U.S. the

volumes pretty So in and really off the It's supply demand little bit off little Europe slowly go. that's how to chemicals things Obviously, back -- bit good you earnings though calls, to pulled been far are housing hurting first little feels the so did Company's Chemical a little when him They've and a in enough to the well. starts, going quarter. picture. to the hurting on is it a a coming impact bit as But here our quarter. fourth early pull say far and far, so listen

number be you and look up pretty XXXX. holding of in black in oil then if as at well. maintenance oil barges would to are going talked industry products, be bubble it black more the been pretty maintained I you that to that's is industry. that's strong. anything acute oil across oil. black a tell the in the When demand you seems things at and look I strong about have and we Ag it's will But And to black hitting else. tell There's than you XXXX huge that's other

the at trade we those So look encouraged lanes of demand each and by picture. have very been

little could my could things supply, we it the come, really it for and heard now, when it Greg. us, at comments cautionary the about still positive of you and said that potential I in demand side But Now back it's the bit. mean, right recession. look pull a

Greg Lewis

given is touch you guess chem Okay. must ago? did very That's you. gas little collapse six just XX% down QX quarter fact maybe we to the -- less be a hear. help know, in pet seen, weak And fact weak price guess say, a given little natural a what of I that much be bit in maybe got chems, I were, eight that pet great be a QX you natural the to that's we've kind for guess as -- could prices that we on the than then gas plant, seasonally to environment year-to-date, weeks profitable have I is more

David Grzebinski

with Yes. on Look, first really our always impacted. us low our get shuts almost lot, related. year quarter the Gulf then It's first thing Coast but just the through we that's down of right, any is weakest and one weather really a you're quarter quarter and water, fog

weakness. So But complex the a I which help that's certainly should little part volumes your point, is prices to be to bit. a help chemical natural a the being little more gas profitable, lower, going think of

see open consumer And a big you is then chemicals some at point I to we're China of as know. think up going China back and

That slate. The just has example gets you other from different the into fruit can thing that's all as interesting Gulf entire a barge imports for Coast the know. Venezuelan -- come the really complex that crude that crude slate a heavy byproducts helped that positive. more It heavier derivatives

in So first that helps the maybe little a quarter. bit

picture weaker quarter, our quarter for as front year. robust. of excited been very we XXXX in pretty us, what first And But the you about again, look, demand Greg. supply But the in it's overall of see we're us know, is

Greg Lewis

guys. nice very job Thanks. a Have you, Thank on great quarter great. Okay, the much, day. and

David Grzebinski

Greg. Thanks,

Operator

standby next for our Please question.

Greg question Research. comes next with Wasikowski Webber from Our

is open. line now Your

Greg Wasikowski

Raj. doing? are and Hey, you David How

David Grzebinski

Good.

Raj Kumar

morning, Greg. Good

Greg Wasikowski

questions. thanks. Yes, taking Thanks for the

far? QX? bit and if sample But in -- curious a David, been what that you size. seen we've smaller it's know, one, a what movements you've with just you little so so there's of QX Or from rate into plateau seen, about talk can through I far maybe First period.

a on then back comment versus towards the you of were of how could of your So overall the great? the recovery be you up is if that? thoughts end where around relationship, recovery that would shaping versus XXXX revisit perspective, the XXXX And from pace sustainability sustainability it we the of

David Grzebinski

very a up prepared strong probably of but mid-single-digits. some third Sure. spot Look, our off That was sequentially, remarks, Sure, in of saw quarter. heard Greg. we rates this,

seeing was then pricing very we're it's still needs up from I not. you we're and Maybe strong. to which mid-single-digits -- very pretty environment. a quarter up year-over-year rising. the be. year-over-year, were which haven't plateauing. still look but year-over-year filled at double-digits, Really market you fourth would still spot. well, up Term still It's and basis, if are good of seeing on spot. strong. So And tell still that, a sequentially are still on It's of it prices very, checks a tight some that's spot XX%-plus Contract is contracts on

long we've I got inflationary mean, where situation pressures, replacement away from about rates talked -- we're but still way build we've capacity. it's a having to a -- being

too probably it’s the that -- profound given going industry we're certainly momentum. to to maintenance good we seeing not It's supply as as is again, this. in to to little terms price profound all. work, And tight We're demand. and momentum it the of a continue a it's add pullback with So bit but a at need is to And impact a seeing in going have I about some rates talked cycle strong at see. too, going

so market in But So months. some winter you I'll in that's are again, you, a we're pretty that, noise the again, Greg. you just checks long say optimistic but noise winter months. know way what don't your positive, very we're get saying, the sometimes maybe of I telling hear can't

Greg Wasikowski

at expecting into caveat kind trying Are just XXXX? offers is for at of then stands in this only you you Okay, to trying strategic to under unsolicited so -- market point? of about guess mind I'll to And Obviously, going -- see of how great. for has review Thanks, I'm That's ask helpful. the is this like business that all that into where you you're into point? got still for entertaining it front David. the evaluating XXXX Are shareholder -- expecting yada. do Are this But is just somebody kind that the value yada, yada, now rearview mirror sale Or heading closed? of always to that to I XXXX? D&S, more see it. options

David Grzebinski

sense? worrying E-frac Whether of power something really more it, makes that fragility kind It's backed always right and at a ways should about market mirror. is everybody strong. very And electrification the doing Or said hedge more XX/X strong spin makes well. we're said, change? now. -- really power that our the us to in-bound, offerings grid good the We've sense. up it it's I when shareholder are well. the mean, wants always look That happen look, also open of you about product business But in you is We'd you value. doing off makes had even the well, generation, that's think to absolutely start And rearview it. if

business On highway, and industrial commercial our strong. is

marine strong. repair Our is business

our So are for more we ‘XX, good, about into business our and reiterating look slings as But some at solid marine feel into that it our up and we in will pretty kind ‘XX years. thoughts business both feels Kirby. of of, last KDS KDS several good going

of back is very way a KDS but ideas. strategy the focused We something But it. now. we're at our to always absolutely right if executing and thorough ran strong, process So changes, it. open it. go We're that's kind on phrased look I'll on for we’ll you've this

Greg Wasikowski

Thanks it. lot got guys. a Okay

Operator

standby Please question. next for our

comes Our Ben question with from Nolan Stifel. next

is now open. line Your

Ben Nolan

me, hear okay? Can David. Hey, you

Raj Kumar

Yes.

David Grzebinski

How Ben? are you doing,

Ben Nolan

How Oh, great. guys? you Good luck. are

David Grzebinski

Good.

Ben Nolan

a of a were could, inflation the thought been were in with power you it think we inflation. Good. that of, Should I it for given, circle the to equipment to back than should where there? also lot be just and everything I lower a from pricing margins wanted what were I about. if and we like off left side respect bit then -- just sort seems there bit that's pricing With in of The little mix just talking function market. to that that in little of going a on there's as tracking D&S

had lot up pricing power, of with And it so basically inflation. kept a but you've

little certain should on business? a you're think inflect, beginning do some should margins? of margin economies about Or side the sort extent where really there a that's is because just dynamic Or to profile more see point where of to of that the we maybe to scale, that to you Now how get moderate, the volume? is able inflation where margins -- you now

David Grzebinski

you with kept in raising pace very think with well. In prices it basically I slates, been inflation. characterized it's No, D&S, we've but

a of little have bit of margin chain, And a The that. of, context with parts Talk million we erosion. other to equipment piece around thing some X,XXX XXX supply kind is $X about is equipment you let and me nailed replacement a to we and certain can't sophisticated sudden and parts, some and a make we've like reengineer engineering so this part you parts down. all the get pretty of sure give

to or chain So time shift supply a a meet headache, cost. little every source you something it part a a or adds shift design

well. there's dynamic as So that

it's dynamic inflation impacting supply an chain So and margin. that's a

get now. guys until manufacturing, ordering got costs. just it. our and engine right? mean, price But Everybody's said, I for But tough. OEMs particularly on engines can't KDS really, say, offset XXXX deliveries, to, That would I been has they need new. our some chain even are supply of our pushing not we've really we these some the It's saying to

combat keenly up high there. that good it's the When it's getting runs KDS a that into to whole the demand working we're are is single-digits And in really us supply towards parts the you're delays the with or still come finishing one That are you parts on our from hard that the organization list equipment. in two And through. key said, So got short but hundreds is you've inevitably. that. margins hand-to-hand chain the focused news something dealing issues real, and got working and know, we're customers

Ben Nolan

it. talk bit barge helpful color. just And supplies. I wanted about to That's appreciate little then a Okay. I

XX how price that last secondhand that barges to what You or feel there's to that secondhand ridiculously the with number. maybe pricing delivered I then It it of wondering, prices. supply I could other companies, likely and for lend seen a itself of equipment respect was be about there escalation would if And year is enough. small answer, seem year, characterize some demand buying a substantially little that? if to you shrinking to me fleet to mentioned bit We've that would higher we're and you probably really barge this tank think equipment? do that

David Grzebinski

them. don't I think Yes, you hit

reasons say, sense for it barges Kirby the doesn't side, great look it make the lot their actually we've here of five-year maintenance man, the continue companies a their to company maintenance are a it. I with cycle on no, going in and just we be barge you're cycle of taking think One about they'll to talked think right, buy. at to Inland that But is and

because over retirements two maintenance see years, will cycle. we next this So the of

going building to and maintenance the retirements cycle, over years, even pretty get equipment. some look supply to little help with healthy pretty the to -- is for going your which So tighter, point few a to going but heavy point it's see one in you people should next demand to is situation make

because that a a very transaction transaction, very, be consolidating of high. situation could or yes, think expectations replacement I cost equipment there any just, price is buying the So,

And strong that. we do about disciplined as pretty not Kirby’s move, as consolidating we're particularly outlook. about we when know, you as So feel chase we certainly going to a

Ben Nolan

That's I appreciate. color. Okay. helpful David. Thanks,

David Grzebinski

Thanks, Ben.

Operator

from question Baldwin next comes William Securities. Our with Instructions] Crescent [Operator

line now is Your open.

David Grzebinski

Hey, good morning, Bill.

William Baldwin

third about you bit if quarter to that the there? I of the comment much about as were and at shortfall little quite Thank you Looks from you least on so, that, good could like Dave, at quarter? at what fourth contributed a that had operations the cash didn't that, that a come correctly? am Raj, a interpreting morning, little talking of the level (ph). based very in anticipated factors Raj, number that here the you you, And [Chris] on end one, the bit what talk secondly,

Raj Kumar

resulted [fat a issues had this on out. and happened in right. getting so actually cash the a by are And word was expectations fourth phenomenon, side. you I build, quarter. a on the Bill, between product in working think Yes, the build used David and of of bit] quarter that the supply from quite have inventory chain capital we’ve operations true had our driven missed I is fourth (ph) in in Cash, it's terms what's call, that's We shipped and D&S but

products. the XXXX we into will we time-frame, as shift is get My expectation those

and work and progress get we'll three now, So out. goods go into get and we'll finish shipped right whatever three does over it three in --

it, ourselves chain the we but ourselves put We expectation. challenges supply we tried through a execute of got yes, there, just to out higher better So set the us.

David Grzebinski

Yes.

had that, Just at worth quarter. materialize we supply put would We to that have chain normal the of that fourth color KDS probably million a Bill. environments $XX little on didn't expected in in to sales materialized have

you if progress those or higher. progress, are inventories construction So about think in in work

higher supply a so interest chain rates, than of payables, a think is certainly out there's are like, on I our which push receivables. that bulk working with we also higher their seen customers we've But receivables, from Our capital lot issues. phenomenon is and the

capital. seen supply And that's and little economy-related so we've got a but build in We've it's after chain. working perhaps go something to that,

William Baldwin

That's Thank very helpful. you.

you a you could Secondly, I highlight chain not important given shortages? components issues, a on supply the chain engines parts Are you on very critical issue that's that other mentioned being -- going any product there was that being on supply or delivered. real are

David Grzebinski

Yes, there's an component electric trade.

On side. the power of e-frac reset generation gas kind and the side natural

easy would lot things jammed think thing. and would to electrification that you like the electric But of pretty pieces supply that in a there's chain. up are that, be panels, related example, For parts a

William Baldwin

line Is there improvements? XXXX? there, As I look any you on any have of meaningful visibility you David? in out sight do mean,

David Grzebinski

whack Yes, team path forward. else, then a chain I whack we the it Raj on gained something calls mole… And get supply kind a of component, they we mean, each put our a do. and it's like mole,

Raj Kumar

one down on and… Count

David Grzebinski

on still some up. But back is with a it and alternative sources, it. then, lined It's frankly, with deliveries longer. in We bit are work delivering. a know, else We It's taking in pretty reengineered chain pops component-by-component. inbound You through ADS But piece But pinch things just it some and we're We other taking revenue just get up. quarter get the frustrating. up. a managing a we're had component. fire, supply work it’s and good pops something look, still

Raj Kumar

Yes, add, about is one. book-to-bill Bill. could If our I

we're at. very order looking a that that's healthy So rate

not it's point. this So of today lack at demand the

William Baldwin

mean, the a of frustrating. got like have No, be beyond seems no, far gas very it's number applications I business. your oil and And to it also obviously lines product

just you could after that And so limited that there you're out going on or right doing? be now you got opportunities

David Grzebinski

look, at Yes. When probably best look our needs grid the our XX/X. -- with have for our, to utilization micro it's backup been. fleets, electrification, was power the it's power we amazing. last even wants rental example, No or light whether season, year, the whatnot, company we’re it and utilization Hurricane a but just is our just Storm It's every

and the U.S. a for real standpoint the -- world opportunities KDS. of it's driving it’s actually many electrification the design from that So for And seems matter and be phenomenon. to new product

William Baldwin

I I clarification, Just me think David. XXXX? really Did barges the barge increase? would read business, you correctly in the net case. in on net hear a be read If that going in that there one be last And indicated lead that's correctly that the the not what new the looking To you release, net to in Inland would in increase net small release were for -- call I to.

David Grzebinski

it the two. barges Maybe signing. -- for it me -- is us, Yes, No. bank we on that the brought was had but was we handful. only a we giving keep maybe some back, Kurt -- are

William Baldwin

Okay.

that So what is and not there relates Kirby to the you're saying? industry

David Grzebinski

that's Yes, order Ben We in was about last said think maybe is from and Correct. industry. anybody one year The anemic building. there I see Yes. see we don't any what of that as barges built don't book hear we XX the right.

be of think coming barges net tied see barges again, But back. I XXXX. Now in up during may some a in you there be those people decline and there some the could that some pandemic

William Baldwin

I expectation your industry. Well, just pertains in what and not that said I had that And the comment for Kirby, misinterpreted knew a was been the there. to Right. quite release while

you Thank very it. clarifies much. that So I appreciate it.

David Grzebinski

Thanks, Bill. All day. right. Have good a

Operator

over back Mr. our any Niemietz closing Kurt like for I concludes question-and-answer session. to conference remarks. turn This would the to

Kurt Niemietz

everyone and for you, on call Thank the today. thank operator, you joining

out me questions, XXX-XXX-XXXX. you. follow-up have please any at feel at reach to Thank free you If

Operator

concluded. attending conference Thank for presentation. now today's The you is

disconnect. now may You

Kirby (KEX) 31 Jan 232022 Q4 Earnings call transcript