Earnings call transcript Q2 2023

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Operator

Good day and thank you for standing by. Welcome to the Kirby Corporation 2023 Second Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Niemietz, conference Vice like speaker to now Kurt today, President would hand over the your I and Treasurer. ahead. go Please

Kurt Niemietz

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

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

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

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

turn now call will the David. I over to

David Grzebinski

Marine Earlier the availability Favorable conditions and during Kurt, of efficiency Distribution $X.XX. margins Overall, million and term high contracts improve business from well we Inland both cash stable higher Both had operating quarter. and and strong efficiency. benefit remains inland quarter of year-over-year. produced reflected margins $XX operating flow, share at we and helped Marine repurchases spot Thank together Transportation, generated of continued weather segments operating million on continued results helped revenue of in pricing, In increase improvement barges. good announced to we and solid and increased levels. conditions income $XXX limited Transportation and and coastal. everyone. In perform you, free sequentially and to which an pricing to in demand per our earnings weather $XXX share and Services results, today, in improved of morning, our and second and million quarter support delivered the revenue quarter second for better continued with our

the shortly With From a demand increases an barges these total in year-over-year. was market XX% a year-over-year a mid running barrels high in high end of be teens range. barge barge were years, seller. contract the In Spot quarter sequentially rates after versus to inland prices nice the in the an XXX,XXX second also with and strong Term revenues inland standpoint, market digits to levels the low Overall, quarter, addition XX% customer will to range. up XX% fleet. year barges to our increased with fundamentals were XX continue utilization ago. quarter, in low the capacity high acquired improve running undisclosed activity of in prices mid the utilization we range XX Kirby from mid-single and in renewed tank XX% the the age double-digit range. Also, up margins second average a under just and with coastal,

spot resulted contract XX% high on we demand vessels, quarter, renewals increases in new and availability high-teens the increases of deals capacity term limited which the During in saw large solid price customer and on range.

the several planned low quarter our margins year our single Consequently, quarter on maintenance were impacted this decreased revenues year-over-year, but second being positive vessels. digits. on mentioned large shipyard slightly are call, first operating As coastal results by in

strong year-over-year markets for orders demand as backlog. for In up of with acceptance environmentally strong were manufacturing, demand Services, combined with remains across and pressure equipment and drove generation pumping revenues levels power equipment Distribution and our our high e-frac. sequentially new continued high friendly In market

electrical new electronic as issues, with particularly delayed components chain many supply equipment expected, quarter. deliveries persistent However, and during the

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

and different offset strong the marine strength market, across summary, businesses overall commercial results solid and coming helping reflected second to sectors. higher, continue demand The from growth our In rates market to inflation. remains segments. inland with generation on-highway for conditions push our quarter industrial repair, our market in In ongoing power is both and

contributing and very is and in chain realizing supply distribution segment. While are utilization our in expected, favorable, market are the growth strong. by barge further the challenged Steady services is shipyards And very coastal for is remain we our planned is the demand and revenue near-term price demand supply bottlenecks good, to industry-wide dynamics increases. outlook rate while

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

Raj Kumar

was or and and operating details operating XXX% morning, the inland Inland second minute. quarter segment Thank efficiencies and income this Compared In was Marine you, David, second XX%. of first more coastal X% X%, revenues increased I'll Marine total Compared increased operating $XX driven margin was of an everyone. increased with a million, to the total Marine by income on provide together, while of million million, quarter increased inland increased $XX income million and market. $XX to good down, revenues, and operating operating up, in and coastal in of pricing XXXX, the XXXX, and were $XXX the improved or quarter XX%. XXXX, Transportation revenues

XX% those sequentially and for in XXXX low from XXXX. low to market inland as mid-single slightly charters was first conditions to XX% weather in inland affreightment. or Long-term in contracts of of detail. business a of XX% of quarter rates of business operating XX% in First, from contributed in market utilization with the to increasing digits let quarter XX% increased. longer the contributed mid efficiency inland and transportation contributed marine range the year the and XX% or second term with discuss spot approximately improved The from utilization the one revenue. Improved high This the seen compares contracts range segment range down in XX% quarter. contracts of was me barge the This more time approximately the year-over-year. Average revenue conditions the

X% Term in low renewed the quarter first partially benefits the during up term due as spot year. operating double compared higher quarter contracts low the that the the of teens the inland contract up the by improved the pricing quarter. margins improved revenues digits by of higher and of prior due throughout to primarily prices. average XX% and operating revenues high XXXX, pricing to quarter were pricing. on rebuild seen second were were Inland from to revenues as higher to offset second compared to Compared conditions Inland fuel lower to sequentially lower XXXX the was increased teens

Now shipyards moving Coastal planned to utilization. XX% and offset was the prices coastal of compares XX% contract increased a the the pricing Marine The high business represented of downtime range single improved in which the days. the had XXXX. barge partially to mid digits Overall, Average second in in from shipyard offset revenues coastal low Transportation coastal was as by XX% low business. quarter improved by margin was segment. positive higher Coastal the XX% year-over-year partially decreased as barge range, utilization to revenues operating for

approximately coastal quarter, contracts under XX% was were term which revenue XX%, During of time charters. the of approximately percentage the

the with increase the expected X,XXX barges of by an year. second David XX.X small had is up capacity. of year-over-year. sequentially for of and mid-single basis, were reactivations representing in to a On changes total XX.X inland renewals modest average provided seller coastal call a end the barges the rates range barrels inland the as is end This businesses, number X,XXX in of barges, tank high quarter, market Coastal our included currently well At the presentation of as the spot quarter Average is undisclosed reconciliation net digits million of on acquisition inland representing XXXX. we This fleet million have for of marine XXXX posted barrels capacity. of and website. were the to earnings respect we from to second and our expect a in a higher the on remain driven mentioned. a that unchanged projections both our for of the contracts number in term teens With barge fleet

$XX XX% operating increase $X to revenues million first saw increasing increased by income segment XX%. quarter by Now quarter performance revenues of the XXXX X% $XX million or When by of I'll million were million of second Distribution compared or or operating income million with or XX%. XXXX, to operating Distribution review X.X%. margin of and second $XXX the the with an the of the and operating segment. quarter of $XX $XX Revenues XXXX, Services Compared and for the and Services million increased by income

engines, XX% gas the the market, and and We steady year-on-year XX% for up In sequentially. and new parts experienced quarter. transmissions, oil throughout were revenues demand

As we the equipment. to backlog and power David manufacturing especially by continued these e-frac chain business continue through units manage and bottlenecks, issues, new in manufacturing orders supply Despite trends business. associated driven favorable our in mentioned, experience our generation

high margins gas Overall, the represented to in single revenue mid the digits. second oil and had quarter and XX% in operating approximately of segment

an businesses. a service, represented of on On repair in Power in digits improved margin activity with and segment generation and the increase single quarter. the approximately in for operating and business industrial marine and was also up the commercial year-over-year. XX% commercial our equipment, highway contributed revenue had Overall, the year-over-year to industrial parts XX% side, revenues high strong demand second in and

move on sheet. I'll to Now the balance

under $XX June just of million total we with had billion. XX, $X of As debt cash

our million reduced XX.X%. ratio to $XX to we balances quarter, our the cap During improved debt debt by and

flow of we quarter, cash the million. activities During from $XXX operating net had

partially sequentially result slight cash chain of a collections supply as as a operations offset better from quarter flow delays. were Second by inventory built improved

unwinding cash million of and target goal. to CapEx the of making as hand this marine working in fund million We and towards $XX progresses growth expenditures the was are of to was used $XX on to related which directed continue equipment, and cash progress capital We and year maintenance capital remainder to e-frac. flow

we we of stock During of free had to an at flow million, which price around the million quarter, average $XX. $XX.X repurchase cash used of $XXX

XX, available June total liquidity had $XXX we of approximately As of million.

XXXX, to For million. $XXX activities million cash flow of to expect operating $XXX net we from generate

to growth to higher Of businesses. our to guidance million with It $XXX up to still CapEx important cash even be million in in the $XXX million capital million note related in is anticipated range. this expect of $XXX is CapEx free million to both XXXX flow. level the of $XXX is to we to that Our spending, for $XXX expected generate

a stock, and debt, down this look we flow for continue to are pay We added approach and repurchase allocation expect cash balanced committed value free to acquisitions. use to capital to

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

David Grzebinski

we We in for to services Thank orders Overall, financial chain our the Raj. strength demand our the to delays, Pricing market continues and the and we continue distribution continues in our constraints with products continued demand and grow improve you, quarters. businesses. persistent in marine strong businesses and exited receive to services manufacturing. quarter to improved deliver and in and supply expect coming is new results despite

we cash While to to with steady and refinery uncertainties, and challenges next increases. due to new of remain headwinds all very the rising Even rates utilization. and utilization these years are in for and construction slowing businesses, related moderate. that mindful from marine to of support high further support by across continue in should contribute pressures economic requirements choppiness headwinds maintenance high some part to several of operations. although to are inflationary plant global positive to continue is Limited barge our this constraints strong encouraging, drive barge pressures driven market. combined oil Also, and is inland higher and we chemical labor gas rate to An starting interest lingering the industry costs economy, expect with expected inflationary and demand high flow inland additional

dynamics XX% market, currently are running very future. the constrained. spot supply the which Barge contribute further range favorable are factors foreseeable represents to inland low utilization barge revenues. approximately expected our in the mid to and availability of in improvements drive These These for to remains XX% demand expected to

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

River quarter, the closures the operations inland be In refinery lock Illinois challenged unplanned our recent headwinds with near-term will marine third on outages. associated and by

and the and better in sequential should pricing inland improved by and in third increases generated revenue offset yield weather However, for this quarter. in our modest efficiencies margin continued improvement operating business

the inland if we high expect the remainder teens average near-term Overall, on gradual ending for to revenues operating of are year low track and year the XX%. double-digit not full the double at XXXX, inland the close year full in to to grow for for margins in with range – the improvement the

In follow is to and as the softness, across to coastal, fleet. market is expected remain getting close Kirby's some range. path in mid very barge there to improving to supply if low conditions industry a the coastal are expected steadily Even balance utilization XX% is the market demand

a better Full terms is year be doubled to to year a treatment higher much That shipments near breakeven looking in coastal offshore are business core expected revenues and almost be for flat and last single compared full basis. offset largely in be shipyard XXXX this year. coal days which are be coastal. Operating to our on cargo maintenance installations, year of XXXX year-over-year. to business expected said, digits will in are low water forward to margins ballast cargo fundamentals year's Good dry expected liquid our planned by

services, parts the Looking despite demand for and for and headwinds lower and a as in equipment, the of our distribution strong counts, business. favorable across commodity and expect market, for have manufacturing gas we we at oil services as rig to prices well products OEM segment. service and continue the lower demand outlook distribution In near-term

units As cost understanding lower a of e-frac, early total have reliability, and of e-frac. long ownership growing an from the total the customers safety, our – mover performance our operating we and standing history see of of in a

in are of the have and Our power performing latest units efficiency generation field. increased well and

associated equipment generation the continue. and in new incremental for we and will As e-frac a orders expect added this quarter, second power trend we result, direct

potentially remain seen beyond some a even we've some for general, These in expect which times in to we although improvement supply quarters a cases slight perhaps an are product ongoing year final the of in to and delays shift choppiness long contribute in equipment, into chains And with could between challenge. issues new lead the which extend to XXXX deliveries, XXXX. likely OEM

work steady In parts service commercial highway King Thermo expect repair increase we by to products. in highway improvement and continue long-term and for on and in on demand industrial, refrigeration ridership increased municipal driven bus demand and

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

full XXXX and revenue achieve we in digit are growth year, low to the double on for track the For range commercial industrial.

new While oil revenues we equipment supply distribution services, chain issues are expected the to and and approximately continue to product representing XXXX segment XX% commercial XX%. revenues year with and representing will XX% industrial impacting deliveries for of and full expect and increase and XX% gas

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

well objectives. and during conclude improved To near-term performed segments operating our the income, on both and well delivering team quarter, revenue executed our

to year projects. cash Our free repurchases, added is balance for debt expect and value repayment, generate use this sheet expect and strong free significant flow to high share and very we flow cash

expect for see and conditions our improving closely Having are impact in core XXXX, we strategy. financial strength and we long-term, produce pullback market favorable recession of said economic we look as confident or businesses long-term monitoring our our Although a in our businesses that, may an the that will are we results the business. potential continuing

early and demand the our recovery to headwinds. Services innings value. in market of and Our intend on are solid macro continue shareholder marine fundamentals We in remains driving capitalizing Distribution businesses and multi-year strong recent a despite

questions. We're now concludes our to this remarks. take ready Operator, prepared

Operator

line Stephens [Operator question Atkins our Inc. the first Instructions] And with Jack from of comes

open. now is line Your

Jack Atkins

good here, guys. on quarter and a great Great, congratulations Okay. morning

David Grzebinski

Thanks, Hi. Jack.

Jack Atkins

spot start do to we just pricing the of order seeing pricing maybe There boards if a is the of maybe far and terms window you spot the Is longer could minute built. bit I pricing contract still lot So before have terms capacity like terms had we now? David, differential, – you built? seems sequentially been maybe quite for a and we've contract way spot getting in think how to How any in there be capacity of year-over-year not has increase And start where a how think pricing. of new backdrop. both below below far of guess, momentum, this right about in much

David Grzebinski

first, that into let was about would get I'll spot up justify me Sure. I Well, new our new talk saw the and then numbers, gap and you renewed what builds. up and prices digits. pricing pricing to contract needed contracts. XX% above probably Look, to builds be mean, XX% a mid-single year-over-year. low still with double over contracts Term It's digits spot XX% good healthy. spot up pretty between were There's being sequentially,

you as a is that, know, dynamic. healthy So market

driving okay. know has is Jack, that, up demand. You Demand what's held supply and

have our material. still not overly weakness The pretty We seen pretty some been trade but it's strong. the are margin, Refined at products chemicals, strong. is in of rest lanes

really So is demand Supply It's in right? is – all holding check. it's up. helping, what's

delivered. I board year, XX in order barges about is been combine it's to last And lowest be you and the the still this it's year decades. this year, if on think

not a of changing lot new capacity see that there's And really much. coming So on. don't we

now is think the needs because and labor you high high. steel and to about high new right prices inputs a XX,XXX-barrel are of are barge If be cost pretty

yet. of cost barges prices a the high, new back new in So I'll don't to that is support really come building second.

up. cost the look, money has thing, other gone of The

depreciation down gone in up have We have and disappearing. and XX% XXX%. of bonus the about competitors then private slowly It's year, overlay our from space lot a borrowing rates this

XX% goes following and then it XX% year, year. to Next the

all that's you not to lot is a together, when So there that happen. going put building of

inflation because trying up We're go every is day. to continue to need do offset inflation rates still real. to you, tell still It's would here. I

in it see consumables. can You

wages. see You it can in

steel we're then – up, are things up. cost inputs The that. medical. obviously like can see wages feeling other with it You you've got labor in shipyard And

We continue to see medical inflation.

rates look, get to building to depreciation bonus you obviously two a to end $XX,XXX load inflation front helps cash tow the with double-digit a $XX,XXX justify impacts day on too, flow. because barge So right, The depreciation bonus that need a return.

not we're a seeing, what lot that's So building. of

So that's kept demand and continues supply okay. go demand to tight and

trying We are down the clear the it's the ever talked I pretty rising just inflation rates. tamp about. Fed's mean, interest mindful I of to

carefully. that holding and watching up in demand is so we're far, So our is supply check. But

quarter. there here call that the the on headwinds we tell That's So is and of be a headwind. constructive. refinery interim Rivers, – third this some closed remain you the that we're constructive the some a the outages Illinois, quarter, a that it's of pretty darn there's bit – of we're know whole fires now, But even for you couple will busy that little very I is to is have impacted things. And right now Illinois us. staying scheduled that, and the and market with of in closed been

Jack Atkins

Okay. I follow-up That's guess super helpful, for just a quick Raj. David. as

about second front loaded? capital flow the we sheet generating you quarterly the kind the to think you of Raj. and that in think cash kind activity, what's buyback think, about you're run us sort of just about is try – $XX – update to million, cap, As run basis? that think we is to I or in terms mean, debt the that should Or thinking that? targeted here going on a be of an I that the of about help should And there to maybe level guess debt given of be here of level can rate I quarter, allocation, we when balance the maybe the whether debt the of then it's sort EBITDA, at, was

Raj Kumar

It's question. Sure, good Yes. Jack. a

capital talked it's the about a I mean, we're act. how we in looking I at think prepared allocation. balancing comments,

weeks an we You acquisition a ago, very of closed value-creating saw – couple acquisition. on

on So pay we've but see got we projects And could down debt, us. a more buyback, of the is the between of I extent. front side, that us balance a a to lesser have bit think course, Share a debt you in priority.

projects, look I would barring year, go at is see way rest the it the any the us we attractive prioritize you repurchases. of should share through as So

Jack Atkins

you very Thank for time the guys. right. All much Okay.

David Grzebinski

Thanks, Jack.

Operator

your line from next next with Nolan for And Ben question. moment comes question One your the of Stifel.

Your line is now open.

Ben Nolan

All doesn't Real a you'd David, day a tow. Thanks. you $XX,XXX as barge question. guys. barge $XX,XXX hopefully, this for Good need count of quick, quarter to two rates right. mentioned

roughly Just you the to that right now? that. at help contextualize Where we're would place is say

David Grzebinski

to for current obviously, be that, – got reasons, Ben, me I doing competitive our gave fuss at Yes. – not they lawyers if I careful would if rates.

I'm that avoid to bit. little going So a

– kind not available. give the can that outside indication. can't, reasons, there but legal you range. I'd say. just can you of get can We pricings, some for think you I readily there's signal rather services It's out pretty an

Ben Nolan

maybe circle were Okay. XX announced, But sounded new. build to That's secondhand I you too. right of barges. wanted The to are Can And what roughly. talk – acquisition economics prices It acquiring it barrel sense make it respect to attractiveness relative about I to and fine. you equipment? maybe higher Obviously, back there, David, was through the acquisitions? like the with secondhand XX,XXX said doesn't thinking on now, how think you you you're barges seeing are they

David Grzebinski

of thing Yes. great was it's about – The deal. was No, a barges. all deal this this one-off kind

leverage pretty horsepower. readily have work heard ability infrastructure our we the barges As you've existing us with our to and discuss,

of very – barges significant this it's that. to discount would expect. I good specialty replacement as a a but mostly in for terms there it's were deal you So of XX a tell acquisition. in value, was barge number It us would XXs, a you

seven barges. I was total a think specialty it of

about It's and say, drop to So just a bread it. butter, and But it's of with consolidating in our it wheelhouse you of speak. our a it's really value price in cost. kind right XX% acquisition, And below so replacement would good we're it. can't just divide I take in us. fits excited terms – perfectly the

Ben Nolan

guidance, fleet costs was next that amount frame how lastly – maybe associated think it coastal in run Raj, for then about maybe includes And what to year. maybe Okay. Obviously, the CapEx it the rate specific without think I a I year. million CapEx should of giving for shipyard look this of me, Is maintenance with should just like? $XXX decent maintenance but possible

Raj Kumar

Ben, bubble stretch going is year. So this shipyard next actually into to

I side, inland the we'll at the maintenance if bubble still think I So the you CapEx see think look continue. on

the of installations, cetera, ballast the the On year. side, treatment, all water we et coastal of by should done middle with be the

So by the – of is the XXXX describe going way water, I the would the it probably end into coastal and probably stretch to to middle it inland is going should with is ballast year.

So I don't know at whether I've given that's you color we're what that's now. enough, looking but right

would lower, materially. So slightly but probably not I say

Ben Nolan

Okay. about know. how I of know, XXX And once CapEx? then a or mean, I or should what don't just don't it, that's XXX done, think maintenance sort is I I normalized

Raj Kumar

So could numbers, point, to Bear used there. to all right this shipyard what bubble reasonable? could we those without go for earlier about say considerable think do would giving back seen, shipyard right? the XXX that I you prior to inflation you be we're talking to do is we've I be what – So in the David's mind, numbers XXX inflation, range though, adjusted need to to now.

Ben Nolan

Okay.

Raj Kumar

Yes.

Ben Nolan

you. appreciate right. it. All I Perfect. Thank

David Grzebinski

Thanks Ben.

Raj Kumar

Thanks, Ben.

Operator

from your your of for And line Hoexter moment next One with America. Ken Bank question question. next of comes the

now is line open. Your

Unidentified Analyst

within seeing for the mean, in fantastic these of barge into I’m Ken consolidation Thanks. a just opportunities. side Marine Hoexter. the to the This just the Congratulations related availability of you’re a currently the Inland space rate for little and what secondhand the I types acquisition. on is I'd Hi. just on of in deeper fantastic like dialing Nathan environment results. we’re dig business. curious

David Grzebinski

deals. always say it’s recently transact. kind wouldn’t lot Yes. a smaller few a Yes, active, more a overly out there’s activity. smaller not There space We’ve a seen just are in few that deals. our – deals of I one-off could here It’s there’s couple Yes, Nathan. there of

when be fleets. multi-year larger market I their look, are Sometimes here. mean, a expectations barge right? companies to off you look going it’s upcycle going a pretty up, price at But selling good

pretty maintenance As demand, in the we supply solid. being check look and at the relatively bubble,

it’s are hard expectations so always higher, acquisitions. think I to forecast price

forward. you people So sell say, hard there’s and to in never buy more to want Yes, I’m us always where going the we cautious. want middle, the it’s to and the But would be have fewer said, is. to top at predict going at people to probably than know. meet middle I That that bottom, so like

Unidentified Analyst

team and operating It’s prepared still chain to I type curious talk a improvement any there? bit here. in my motivates sequentially? And referenced this I pretty margins. that’s material maybe driving the Have improvement think distribution supply up guess step constraints. what services In up some your margin just remarks, related what’s Yes. of follow about seen on Thanks. operators capacity we little cut

David Grzebinski

part Yes. been Well, first. affected we parts. on let one is you the and I improved you supply tell supply electrical me most up. take type the where sometimes, lined of we’ve electronic but But there, and on margin, It’s – the pops get whack-a-mole, it chain chain one about would talk out another part

margin, lot combat. That is equipment hand delivering would some hand As electric supply Raj It at to we’re best. been you and choppy the a improving in that has still chain and as frack know, say, been it’s but building of generation equipment backlog. we’re said, power at

out of helping it across taken things Raj, just you costs improve. you equipment, it add? to now a also that we’re better. and anything would lot running it that’s board. I little I know, just a want don’t – And the margin. in smoother, start deliveries, running helps tell we’ve the not tend are so as delivering margins check. to keeps And margins And we we’re And margins as

Raj Kumar

Yes.

if I we’re see And of starting leading our what think, said, side. to lot we start Nathan, a David on of benefit work issues. of to out better, to everything operations margins build have I in chain on you just headwinds will supply we think see But works terms point, the supply get right? that. shipped, the hiccup, But deliveries are there. out we’ve then of done a David’s chain and some To if cognizant KDS be the

David Grzebinski

of a all of parts you can’t sudden when it labor new to process supply say switch Yes, eats where changes. up to it’s a it designed up parts, mean, chain make have you’ve effort, whole hours eats you just get you there’s a certain as change then and hours, design that management engineering – got I you’ve in got, you

improve So supply should continues us as a chain that basis. go is the on forward good help news to that the

Unidentified Analyst

helpful. you. That’s Great. Thank

David Grzebinski

Thanks, Nate.

Operator

[Operator Webber comes question the Instructions] Greg from with next line of your Wasikowski And Research.

is now line open. Your

Greg Wasikowski

at Yes. Raj. the about XX,XXX Hey, talk coming potentially in, I now XX,XXX day. orders here David for to rate new being of kind and wanted bogey or per

about to time last closer or XX,XXX per think XX,XXX talked it’s day. it, we I

I or about than bogey there to potential therefore, kind – understand, we’ve that is day does like closer of I more move even that point, continue contemplate does seen, right it, just, per moving as as cost XX,XXX closer way maybe think want you get that the to further or there’s and as people room XX,XXX So we breathing for we now? to higher a realize increases

David Grzebinski

number. almost is when a year number. right. little I we And There’s a boats you with has vetting no, to inflation you’ve that adding Guard gone that you months question then six I of four would whole things the to gave looking or keep forward-looking a rattle below mean, every just inflation a across into it’s tell XX in standards. $X,XXX up, but to on it’s – of inflation expensive or Coast your There cost has Yes, been whether host category. inflation. tier all continued bit And we that inputs, board little of our the There get more I ago, that you’re a engine they’re up. heard were mean, packages just XX customers is in Yes, the off bit operate. forward directly. compliance it’s me you

that line gone seen it’s cars. everybody They’ve whether just paint on We’ve even course a consumables, and use regular on about food, things and rental we basis. of knows up

gone. have gone and and them on or as where imagine, getting to around facilitate cars X,XXX them costs mariners them cost to rental they can moving crew You every up to hotels our day of need the them boats with off or or just to putting or crew Those for they whatnot to have X,XXX them be. getting getting continued them moving in

bit good news we’re moderate little that of seeing is a the Now, now.

seen a much, we’ve I bit, but but lot. airfare not bit. think come Hotel car rates so come down a has down not little rental rates a

answer, that more giving direct mean, can directionally, a what’s and see lot. little you you more So I at we inflation look do I’m put and of a inflation not that that’s in a tells prices alone the driving increase. it’s steel – I been you But but number.

Raj Kumar

calculus when now. look Greg, gone should at think the increase up, to about even talking in cost I has of the money right? we’re you your And have right that rate That be add

Greg Wasikowski

for No, helpful. Yes, that’s sure. Thanks guys.

David Grzebinski

cost I’ll down, say have cost eggs the a the so come good story. – that’s of

Greg Wasikowski

Yes.

you of two revisit this might it I to flush the bit, Next for want idea and integration angles, from vertical ramble I here. a wanted guys. just see to can And them but out

are own can, of that the maybe so and yards So expand at and have more I maintenance or or you additional years in market. barge and and at How and Kirby next little longer your to that least, some seeing from and a about avoid mostly repair then about vertically bubble repair guys that. and think San do say what contemplating capacity would capacity place you over opinions practical kind maintenance bit. market. we expanding huge where the probably integrating The the the for would future, kind start farfetched, if over we where yard acknowledging I and guess that’s be for realize the capacity unlikely, but upcoming for do think few more new get or you to of control think the come the into a I your first building lines potentially worth acquiring move orders when Jac in of be that? to acquire see the maintenance fleet, benefit still develop supply to But

David Grzebinski

even you’re out us, close has as number maintenance cover, but not maintenance. all covering bought do we helped Yes, well, years Jac our San of bankruptcy shipyard needs, a to they aware, with us it help ago. of doesn’t That

things christen about – the in exciting. exciting really San we’re about electric just One hybrid they’re August and is of first the Jac that’s towboat to diesel

dock for It’s customer We’ve power in traction great green a that, getting footprint. interest a use ability carbon it. got of lot We’re to the it. a of got with lot

initially. So it Houston free areas terms emissions could in the of in working be, Harbor almost emission

San San boat we help a with well really we’re to as barge enabled expanded that Jac’s maintenance. excited about So have as bit maintenance Jac

always great we’ve look, ecosystem and whole But, got, look, go which of they’ve and the they as would been always expect. we’re a partners the a you inflation, a lot and cost each us partner – barges been I of say. helpful seeing need been know, they’ve partners boats. with we’ve lot up of supporting got But We you – seen would maintenance can shipyard

most of the got is partners. terms mean, answer. and excellent to I is mean, that again, in something building build probably mean, get players new I barges the our efficient an look, there. No they the we’d into? is Coast want barge, we’ve Now great Yes, short I

It’s different So we future kind could But shipyard us investment pretty are in really hybrid as for not of massive an well for small a like and would electric undertaking things it’s our San work the part doing space. which boats something good that. for a also is ecosystem. us. be a maintenance be building that Jac of

Greg Wasikowski

All sense. right. Thank guys. you Okay. That makes

David Grzebinski

Thanks, Greg.

Operator

This I Instructions] you for see [Operator conference no completes participation. queue. today’s further Thank your on questions And call. the

now may You disconnect.

Kirby (KEX) 27 Jul 232023 Q2 Earnings call transcript