KEX - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the Kirby Corporation 2024 Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Kurt Niemietz. Kirby's Vice President of Investor Relations and Treasurer. Please go ahead.

Kurt Niemietz

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

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

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

Forward-looking list time uncertainties, statements results various Form other will with in our materially from from our result to the these filings anticipated found now made filing time. I could and Kirby's of factors. David. be risk differ call actual of involve over as can the in a SEC and those turn to A XX-K and risks latest factors

David W. Grzebinski

everyone. change earnings for Thank $X.XX which which credit $X.XX. partially good we tax and in distribution morning, quarter inventory a onetime our noncash GAAP to Louisiana offset a a today, businesses, related was you, a law fourth onetime per Kurt, announced $X.XX, of of by share Earlier included in charge of write-down of

onetime later, share. detail quarter $X.XX on adjusted items, earnings provide the these which were more Excluding for per will Raj

services per during challenges were slowness headwinds earnings activity that marine quarter, Transportation and reflected performance up segments strong both results the and from XX% distribution both and with typical offset year-over-year weather and some by adjusted financial share year-over-year. navigation in teams drove execution in our good services. These quarter for Marine Our experienced and in and in distribution we softness as seasonal in fourth seasonal

over which by generated buy we million further on and ended the flow the cash in slowdown quarter, balance also we sheet of $XX down back normal marine We during the some early poor We the debt to paying stock. in trade million of to good operating experienced a used our from headwinds XXXX. In in a $XXX and the year transportation, growth inland conditions was $XXX part free anticipate activity million of strengthen in demand refinery a quarter. note, in dipped strong slight quarter. lanes standpoint, From and

we range year-over-year. to the barge exited began in utilization quarter. up our to the activity were Spot sequentially, averaged flat However, but pick we're slightly the and utility as high single-digit down in quarter. tighten rates Overall, XX% up for the prices range

contract a Fourth term high inland approximately our steady our margins ago. XX% barge with utilization renewals were In XX%. in expectations operating were increases year our running importantly, with line mid- to More versus range. in market the single-digit high with coastal, quarter remained levels fundamentals

term the quarter fourth capacity the with in X% to combined contract XX% year-over-year coastal operating revenues that increased impacted low renewals the quarter limited low resulted in vessels quarter, customer teens. range with continued increasing on stable average in year-over-year. Planned shipyards a rates mid- large margin increases year-over-year, availability During only with market high and teens spot demand, the of an

end others. some in markets by remains with to adding as of XX% our areas XX% project year-over-year. distribution the from with Clovis backup and strong, orders power critical. need was sequentially and delays backlog In growth revenues major large wins customers pace was power offset or and several in mixed services. grew Power The industrial total for Generation, to Turning demand our across

was on-highway soft down product revenues industrial and summary, driven conventional driven revenues temporary commercial our offset partially sequentially, were some very even were in XX% cost service by our year-over-year, repair, XX% and by market, control business. our both issues, XX% In business. a and by up seasonal fundamentals favorable mix This e-frac and gas, year-over-year X% in positive. to results softness though while growth gas underlying and ongoing were fourth was quarter down oil oil truck In initiatives. In market for challenged due segments year-over-year remain operating by the income and

So overall, have improve, trade favorable for starting higher. In come. helping industry-wide to we coastal, in seen some the utility which the inland prices firm up first lanes to with look demand far years quarter, push is in very rates supply dynamics spot

are In in continues demand softness the the is Our balance strong, a the later, gas our and we and outlook barge Raj All utilization outlook oil rate increases. first, we services, fourth our grow we results and favorable for segment as business power offsetting legacy mostly to year. I'll arena. realizing our strong all, about have very in is but the distribution turn into and coming sheet. discuss talk for look the and call quarter to more over to I'll generation

Raj Kumar

In The X% our combined a weather, by of the quarter sequential days quarter. the trade compared lock with and of increase weather inland the coastal and combined operating XX% XXXX, increased $XXX Thank XXXX, marine was in fourth routes quarter total fourth of operating million meaningfully $XX at margin income morning, third Transportation X% decreased around operations and XXXX. and segment quarter and winter good everyone. increased few high-traffic the marine of million revenues maintenance an delays a Total with delay lock XX%. income you, the of drove fourth beginning XX%. to impacted during were Marine Compared revenues, David, operating revenues to

time those The XX% revenue. as contracts quarter XXXX. or seasonal ongoing contracts quarter, of XXXX. the higher that lingering XX% of increased inflationary contributed X% by year down blunt marine slightly the right range fell of contract contrast, which with and increased conditions XXXX, term conditions to Average renewed contributed contracts due in more in line activity approximately XX% higher Inland that XX%, lock term at rates barge during revenues the was XX% the single-digit business in quarter help to quarter delays mainly the inland market contributed experienced as inland Looking the quarter. affreightment. Slower utilization fourth early high caused in were the was sequentially range our around XXXX In cost of high charters pricing. to of margins in year. longer, management prior single-digit inland up in compared Inland the driven and the of third and operating approximately which by Compared quarter quarter the from XX% we the sequentially expected, contracts for were revenues refinery average primarily a inland segment of with pressures. Margins X of business fourth the early well given detail. as third benefit compared spot but the X%, in to were term Long-term in to transportation quarter range revenue, the to decreased market part operating year-over-year. the or flat softness fourth and of weather pricing challenging the and on of spot from with

had that offset by Now higher range, prices low shipyard moving driven partially an revenues margin business. benefiting an and to from by X% the teens coastal the increase partially operating year-over-year offset were pricing Overall, higher contract Coastal in in increased by coastal shipyards. timing.

was utilization quarter improved represented XXXX coastal balance high XX% the XXXX. the high Given from for before to margin from range the the we expected third is through shipyards fourth linger of of Marine revenues barge XX% business segment. as the move first quarter on in of planned quarter Transportation headwind the XXXX mid- number into both the coastal the of of improving Average shipyard which schedule, the and to of XXXX. The

the the is website. of the call were fourth provided XX% year of higher approximately of During our our the At quarter a mid which well fleet as low increase full term outlook under This slightly the quarter, have high to on and is the year-over-year. With badges, in were time term in X,XXX year. XXXX. renewals of to posted the range both the was rates businesses, the had in fleet on presentation of we contracts earnings for market quarter, inland respect charters. XX.X fourth reconciliation representing of up Marine and end were our expected expected XXXX. the capacity and spot included in the revenue percentage million XXX% to average is year-over-year of teens for Coastal barge changes Average inland XX% barrels tank prices for range coastal contract to in the unchanged coastal as remain

operating of an for revenues and of Now million margin an segment. quarter I'll with performance $XXX the and of segment review Distribution XXXX operating Services the the fourth $XX million were of Total X%. income

and quarter on Distribution and to of the conditions shift XXXX, outlook, diesel the fourth $XX.X million Services related was customer an market primarily electric company a to current based weak in our by includes fracturing conventional for segment, noncash the equipment. conventional conditions view impairment equipment diesel fracturing industry demand which on for market decreased industry-wide the equipment. This recorded charge During driven fracturing inventory

certain adjusted. Compared XXXX, mix. income operating XXXX, that Distribution to company the lower When Services decreased and the third of XX%. the inventories the of accordingly and decreased income by of while these had to carrying opportunity fourth value revenues segment the operating such, decreased X%, inventory As quarter commercial decreased limited revenue and determined segment due X% and by to were X% quarter compared revenues

generation, were year-over-year. detail. XX% our markets Moving to industrial more up tied power the segment to In end in revenues

see industrial backlog data to backup and continue significant in from orders resulting other power, centers We power generation applications. higher

shipments revenues operating previously year-over-year of space in Power segment were digits. orders. XX% caught year-over-year XX% Altogether, from XXX% generation power represented generation revenues revenues. tied margins to the energy as high and some up with total operating sequentially -- total single and Our power were XX% up product up the delayed generation

side, activity particularly industrial On and the commercial service. in lower partially truck activity marine offset other areas, steady on-highway in repair

rig favorable were represented though ongoing XX% As initiatives tempered segment made revenues drove to down see cost and gas X% of softness up continue had activity down and single a legacy XX% Industrial operating in Oil savings quarter the while margins frac-related down lower a mix year-over-year. and demand XX% sequentially fourth Even and the income. of digits. was segment to and transmissions, market, partially and equipment as throughout gas increase lower the gas of and offset in on single by execution Commercial This being quarter. for and softness Revenues margins fracking C&I the service orders related and the oil and revenues down new were were solid in equipment. year-over-year XX% we C&I result, year-over-year backlog operating and new oil revenues sequentially. in digits. In is operating year-over-year year-over-year, XX% high in operating high conventional parts engines, XX% XX% revenue product counts in had and in mid- e-frac income

Now to turn the balance sheet. I'll

XX, we As of had million and of around $XX cash million improved December debt with of to XX.X%. $XXX our debt-to-cap ratio total

$XXX operating and cash fund on sheet. $XX the from flow repurchase $XXX we working quarter debt had or benefited strengthening reduced an activities of capital maintenance a million million of operations $XXX of reduction cash flow million. of just and We price flow our hand expenditures average the balance over quarter, to $XX used further at to equipment. Free from During $XX related by We approximately million, cash from of to net around used Fourth our flow cash million. around capital quarter CapEx million. primarily generation marine $XXX was during cash stock

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

said equipment teams by CapEx, marine we posing million higher and from cash earnings. for spending unwound managing capital to of headwinds flow facility in XXXX, supply executed throughout especially XXXX, with associated well million, maintenance both and was to capital working respect growth the improvements. We the some revenue generated constraints, and driven our of million working coastal for near operations and generation was the million term. Having Approximately of $XXX space, all in With year. existing capital still For and with $XXX power million capital Approximately see we some inland $XXX $XX total capital $XXX to our of marine our improvements businesses. in associated XXXX. spending was that,

of of the million the million to for the to we driven Altogether, expect end in generated year, working our release. fall range. favorable CapEx by million flow which $XXX into capital $XXX XXXX, we $XXX free guidance cash exceeded high For part

We expect free be XXXX good for to generation. cash another year flow

continue flow outlook. approach always, opportunities. I committed As to shareholders turn this David balanced we to and capital we'll discuss acquisition will cash to and call back use to a the our capital XXXX pursue now long-term are to investment to allocation return and value-creating

David W. Grzebinski

Raj. you, Thank

businesses. conditions in is through we activity very manage position fourth a starting strong increase. in challenging quarter, we While operating the our Refinery in ended to

Our inland are rates to barge utilization improving up. in spot beginning and pick is back

In the While market shipyard our segment limit expected are typical weather conditions products remain the years demand marine remains we in to and and actions across and near is activity to in outlook the first seasonal volatility distribution linger of headwinds services, for our full and few taken over this quarter year. of expect some and high near-term to levels off. paying past services strong mixed the to term propose our coastal

results the lower segment D&S, very expect oil market. and tough a despite to For gas flat for we slightly

with strong of XX% deliver earnings share. per We'll combined. XXXX, businesses financial XX% in to our year-over-year increase expect in we overall, a Kirby another growth For year

detail anticipate construction. rates saw positive Moving dynamics to marine, the barge to firming The inland up. we in and are In due specific sector we refinery improved segments. new fourth demand in softening the on barge quarter utilization market has limited the

We to range low with the mid-XX% the our barge renewals as term occur be continued contract pricing throughout rates year in the improvement year. in expect to utilization for

labor of mid- to high continue on revenues with acute see in the the equipment pricing. Overall, the full industry, to drive which remains put grow upward to for expected to and and However, mariner costs. should we in the inflationary inland pressure up spot there range pressures, to single-digit cost continues are increasing along pressures, contract continue These an year. shortage

seasonal expected to revenues winter in we has normal a see, be in margins weather and As first usually started is headwind and quarter. the

e-frac the deferring results trucking weak on-highway partially oil lower as of in near-term in environment, bottoming and volatility place continued XXX margins capital for driven improve data conventional first Steady the the conditions by operating range. in backup In supply demand demand utilization and the marine year and expected issues, Revenues to full keep customers margins year for maintenance we will the coastal, recession. repair segment, see mid-teens market the with of In although gas is barge for are expect across remain basis high feels up low remained contracts. expected repair power oil in planned to to the higher frac orders range mixed remains is steady, first shift Distribution and average increase the industrial, service considerable customer in strong XXX XXXX, in to offset year, in the with orders is from expect points. In and be outlook high the the the customers overall discipline. In our range mid-XX% from the power to away by demand demand Coastal gradually supply generation. and being revenues maintain remains market generation, down favorable lowest we as for very to due lowest during However, fleet. while continue the to to commercial in to the and the anticipate to continues activity balanced the quarter range by industry strong. the and low current to growth on-highway need at center compared double-digit pricing are the Services to year full on full quarter expected the shipyards. In number high close on double-digit in be and single levels gas, basis to we power weather and driven operating we a single a and take

single and throughout flat for new certain we to equipment beyond. volatile delivery check a power extended to equipment earnings, meaningful full lower issues. orders overall, total products OEM record expects slightly new was contributing supply with company this lead in conclude, products in and continue of generation XXXX of a we down supply to a the build Overall, margins marine as manage slightly times to year has revenues high have we operating for segment but for to look as of for schedule be outlook to continue XXXX. We expect year receive year we favorable year-over-year. To through the A digits, new and lack the and

we free balance XXXX. generate and to sheet flow strong, is significant expect in Our cash

We with next concludes this solid few our results Raj expect remarks. questions. to XXXX we Christian, take in higher fundamentals produce financial the growth businesses ready prepared will and our now and strong to we earnings look margins see the out as year, I are good and years. Operator, for continuing

Operator

Imbro will Stephens. first Instructions] come the Daniel from with line question our [Operator And of

Unknown Analyst

of difficult first once for And we update pricing. quarter, kind we puts in Can look This pricing better is at I some trends the so here all takes past and Daniel. weather, talk what Reed takes you difficult expecting competitive first on to Along the activity. improved ] confidence the to XXXX. that we [ maybe strong through some refinery puts at pricing? weather, in continue can gives When and the get you want about is just the driving the what look have far year? we that move on you're with this and

David W. Grzebinski

in Chris question. a see Reed, Christian will But this little we -- we a tag a saw for little back. utility bit bit. look, refiners cut I'll back as thanks the Sure. you, tell did pull fourth and speed the bump as quarter, a team

numbers. that away. for all down went pricing bump right X%. our refineries The range. where weaken utility spot utilities But the back is think little to I We a utility XX% share up. That XX%, Christian bit speed now was us. some around abated X% got down saw into recent are can It

know, now. And terms Christian, Christian demand more you other the supply a you and of of the and do right little color circle drives that, back on you part will that, question. don't ahead as we pricing. So give Why that. in And very go and are tight on I'll

Christian G. O'Neil

Yes, sir. Thanks, David.

You saw the fog, tend to that as a a -- We saw format to but QX David about River. we the well. weather it in-house winter Illinois think talk And speed on around little ice bump. Funnel and election, passages, maybe typical patterns affect QX. began I the characterized here

holidays out holiday standing fell. We utility with as tell the time snapshot in activity played have trading work, people of long some today, kind the the election to you here, the got a we saw back a way as However, I slowdown. season was can recover. and bit seen

seen and nicely, recover have as We it activity a spot in see very pricing speed in bump. a We characterize core refiners. bit a softness that's some of our so we refining of why did

However, looking I you back can today, we're rebound numbers it tell QX. the in seeing at nicely

David W. Grzebinski

don't Yes. And always weather inland look, get Usually, part in it impacts margin. the why our of that's utility terms up tighten always first the extra we the weather. is then for extra utility percent quarter does that margin lowest second is weather. really, couple on paid Look, We side. a with help of utility, But get

being where basis were, modest. pretty up think, we XX%, last XXX XX%. excited is Christian the focus of the we've said to mean, at think we've XXX the year margins. they'll on I in been focus what you be full points. We're picture the quarter, so, first don't I we or for on terms about big I the in telling we're week And is are.

even utility, for we sold us, which think bumped I out. XX% is

and about that really better couple utility. of get mean we're driven comes why the that and quarter down quarter. to a lot of kind pricing of be starts we'll first month demands a the by and so or and fourth of we demand. after still in not in weather weather, new terms all from had little supply That's -- speed that's if I the environment, better constructive tight supply back there's percent even So

Christian G. O'Neil

And nice I just in add would to QX. a had cycle David, that, renewal we term

as we pay high single momentum that contracts well. into referenced Those see quarter, and on XXXX you'll conference the to the call. dividends fourth going term have XXXX digits in begin as were You'll in new year-over-year, that that

Unknown Analyst

helpful. Very

kind side. shifting the to Just cost of

equipment talked Do inflation. see You going? have expectation an that XXXX for where and wage about and you mariner inflation you

David W. Grzebinski

Yes. brought No, to I'm year. glad That's go up, another this you spot Reed. that up is going reason pricing

industry, Inflation a school -- tight our have And discussion inflation. mariners. we because economy the and own advantage slight is it of But own lot a very these on We days. our it not very have just see tight. have it's we we the mariners Kirby, in produce we

problems the than busy, lot shipyards, into It's a used so and of have that they're shipyards And about is out inflation the that's they to attention in and the talking They which and the that, X, of shifts, out inflation days. just more use not the labor constraints. price seems that these obviously filling I'm picture. But X, eggs, get putting wage the run day XX/X, we X same last they're shift. day to having broad-based

labor things anything some radars and So like they've got pressure, electronic, inflation. seen we've

It's to up it. it which our the get some offset of too. inflation, So it new, -- giving it that's still abated. our I dealing said that and why because They last you understand anything frankly, we to pricing I'm year, you hasn't need real. that they're tell not with customers there. And that but we to would so is march competitors Frankly, all is what continue

plus you at inflation incorporates increases. for there on it's XXX that hard point it's it, the to inflation. to of But again, in area in precise margins, So both number quantifying inland if us price improvement you XXX terms increases kind basis a give of look that

Operator

One of And come moment from Stifel. line that question. with our for the Nolan next will Ben

Benjamin Nolan

could barge if up can real side on So if up pick I I quick. the -- pick

I and going on. forward, to going look little we comments of things get or a there's a that your somewhat -- unique hope As to was couple are unique, on

also, the what any do -- on industry? any if happening any there are for on and implications then perspective some things there you that that your in are the are that refinery needle mover all, a Just Is Mexico, they market say color of for in at just on Canada on were guys? all Lyondell have you And of First Houston. tariffs saw business? closing I those barge yesterday, a

David W. Grzebinski

on let the just let tariffs. handle Christian with an thing broadly me It's interesting I'll Sure. talk tariffs. Lyondell but question,

So far, broad-based. than rather anything administration as looks like is it a negotiation the it using tool

a if it's of more although tariffs, we're Our side the generally happen, that. but and that for don't view XXX% marine they from would good Kirby very lot more pro-business U.S. tariffs, in onshoring is a and We're essentially domestic drive like activity in

view, give we'd robust not customer, my that Christian So probably offset be that. base expensive replacing to that. Again, specific could it. a depending be bad that us tariffs and about how have new delicate But equipment. Christian, talk necessarily inflationary, a the also why -- further huge would would, be of would on even from them to expensive, on? benefit for because it it work which on much would more would can or think replace is equipment hard for don't more be. make but to Inflation we the We you installed inflation than we tell some you extend us. in would about cycle going it color add what's It's equipment

Christian G. O'Neil

be or shut refinery Yes, part refinery of service as and I've begin start supply down plants you finished needed chemical refinery come and chemical logistical you you over that customers to or our other the or miles other the may in places ton see, service be other it and those to refined from demand. refined the exit come that, when with the who to the years it that while product that market. At What we tend regards that the feedstock end as logistics of customers seen this can Houston, have The is change it, travel serviced products see do the a the to to seen feedstock in benefit same in times, actually I've places. to positive. service, from barge to products, the a business or

capacity think will see takes refinery market. think of the like terms we refining but markets a market. barge service But refiner you, to never In said, That I I that to our the used exit exit good that, of days capacity the customers I'm I this it demand to not tell this that will of pick probably from that of is refinery. some global United older States in older they operate for the this a refining refineries, rationalization up world-scale many the of thing

So impact Houston to I'm not to dramatic arise think trade I volumes to the away of day, see do don't has Harbor, sure what the any new see may we out you like go and opportunities while it in we that lanes. day actually

Benjamin Nolan

Great. both like business sounds for then quarter. the particularly very helpful. I question, appreciate the humming That's of those was it second my is hoping answers. power I along, And in fourth

the As customers well, you course conversations fare might business that you sort the at context of any maybe you you how with of any very on maybe and you're give over build? that backlog think first on all, can -- And power contextualize having growing maybe of or course anticipate color the year the year? how over how the of least the

David W. Grzebinski

a little real. I'll real side question bit Look, center Sure. is The this real. our is data demand is here. Christian a split and power e-frac gen Even thing.

orders backlog specific although seeing you it's number. give let are it's some color But growing. give a on don't we We to Christian the backlog, lumpy, I'll Ben. Obviously, continue. like

quarters can You million takes lumpy. could Picture it but few our all lumpy million get chain The numbers. be, see It's weakness the want They of oil or going. supply field, that it that at then a in conventional a center it, call once. a $XX data it's to in worth And to this, equipment. offsetting it's $XX delivery.

that. lumpy So it could because when of you look at progression our this be year, quarterly

have don't First quarter, really we any second big should deliveries. But we have quarter, center big data some deliveries.

and but let lumpy, be give will color the you Christian some it on overall backlog. I'll is growing, So trend

Christian G. O'Neil

the David. question, Thank Thanks Ben. for you,

a numbers up of millions had frame journey, our backlog in you gen you years If the of tens dollars. ago, power X

something Chad power of ], While we of the that I great hundreds in millions who the power in backlog of our backlog backlog. power XX% of manages does don't year, This My here, the dollar you the other It's job, into to generation me discuss would [ good delivering deliver milestone dollars -- tell gas business will gen. the into and friend, products we natural day. our XXXX, told a will we gigawatt X hit gen market. our interesting of going

a that's D&S. So milestone significant for

momentum it team the see flows David good as penetration about a a dynamic. the and in think mentioned. on this But backlog. shows lumpy we excited through, as enjoying it. very building is the do out you I We're to as market. revenue that is player the It we're It market it, capitalize we're and

Operator

One of that line our come moment the America. for of Hoexter question. Bank And with next Kenneth from will

Ariel Rosa

It's Ari and despite strong demand pressure, on still a Maybe for to Ken Rosa dynamics. seasonal supply look Hoexter. little inland

XXX where you're You've XXX years? significant justify go long-term provide about just of color new are where at some basis a improvement and Could to on looking you over what rates builds rates need point how -- or margin additions next spoken capacity opportunity. couple to and would to that the

David W. Grzebinski

the I the attorney you market Yes, will in because can't kill me. you pricing room give really bet. specific

negligible. in decline little quarter. So that the in saw here -- and speed we've regained bump early there X% Christian look, We're We that which the far said, spot that fourth pricing it's already we described is to barely so X%, had traction I days. seeing January. But have

got you little now, right in XX% pricing from It above now. now. term. And sense discipline It it above new building for right now to code. may increase lot to term it's where needs competitors healthy is terms could to build above got sporty, understand term. said, equipment. That order there's now. entirely Christian just go like look right really that What let of gets to way that. a of a construction for You've as replacement equipment of mentioned, day for now, justify in it toe, new a make be spot a probably in happening of is a We of market. it term. it's building then doesn't pricing we need our but new is of the be, kind I'm And It's if year. and to X saying be XX% at the right when X would barge on are that. well play $XX,XXX rate toe thing. Look, the to XX% probably that's That's XX% kind where above barge A out

are that's all do estimation our So significant it's replacement. build we exactly need our for But don't improvement. new doing. We our To capacity, is what -- estimation. competitors know rates

Ariel Rosa

helpful. Got it. That's Then on year. just a bit this more maybe little

to expect the the it on of thinking And much Is be just to color trough of any third of Typically, you thoughts? quarter seasonality of maybe bump seasonality there XQ year. any I'm quarters, just trough first little any for Is in you these happening temporary unique second anything fourth. down a a have how impact it of is. rest but the in on pressures. back and or noted given bit fall about the some -- a seasonal the that really, You

David W. Grzebinski

No. Sure.

mean You've the seasonality the usually I first right. quarter is the got lowest.

Second and quarter third pick nicely. up

not as but the down back the That's quarter quarter little first bit, highest. a quarter. is low as Third normal seasonality. Fourth usually dips

year. that expect business. would this only other We for our caveat be coastal The

unwinding the very cycle. have first in start quarter. heavy They'll second quarter We a shipyard

well. will that maintenance, through impact performing essentially doing we're probably too coastal rocking go the a fleet rocking, required going and it. We term, is have really is say So right sold and it's We're it. But out I that to well. normal now, but just strong of shipyard it's

the us. that once get So of these It will help out for we quarter and help second, third big behind coastal will quarters. some fourth shipyards

I factor seasonal other only Anything the else, be add. would that can Christian? So that

Christian G. O'Neil

was We're No, said. seeing the in David, that QX. seasonality well normal

bit little Illinois in ice You've River. a the got of form

lock You've some outages. got

construction we normal rest weather It the You've typical quarter, will our see trough things be very out but and about that nicely winter bridge of year. going QX got battle. some of but beyond optimistic recovering is we're in very the nothing actually the really on, the

Ariel Rosa

spot on And just XX%. as the noted inland with side Is of teens and I XX% terms the term. about -- clarifying low well? the Is coastal, is dynamic same gap across the to same the I you that spot X believe, mean high up that

David W. Grzebinski

XXX% termed up. we're Really,

So right spot coastal no in there market is really now.

the term in typically several do as our we nature, are in multiyear. So contracts year a have

I tight. is There's right at that's lot of very not as It pretty And think all. renew, -- for up. the now. really industry most pricing seeing. that spot really those it's will a I'm mean, So consistent go contracts market I of term

Christian G. O'Neil

that a maybe that of you piece a Yes. at rates The spot reletting only will market term exists is and because the trips. term the really see of equipment premium to shorter they're duration

it we're pretty you at I cycle. in renewals, on percentage you're rates XX% when at the clip David market look if offshore increases our we've is However, summarized renewal before. mean that mean, chunks I we're the that a And I seen getting sold getting it's rate never big moving think a all well. very out. but

David W. Grzebinski

But it, inflation. inland gone new we has of adding, equipment substantially. like need right? up just been The side, There's cost on the

give range. To XXX,XXX-barrel it's $XXX ago X, you million X build benchmark number, built to that to ATB. today, X in $XX $XXX about a million We Just years million. X, the

economics. do 'XX is side close so like the first get unit It's the inflation. it's cost replacement you the because and same XXX,XXX-barrel to the end maybe coastal supply to of get cost on part about to said side, that's of until of steel, need inland in even you that construction. up So everything rates it anywhere demand to probably today, And -- It's on a the new we've if of the wanted build would 'XX. worse go

and about for we're pretty long constructive So us. here and of ourselves, a seeing excited we're again, in we're -- what's front runway

Operator

of Elmaghrabi that And for BTIG. question. with our the moment Sherif One will from come next line

Sherif Elmaghrabi

thinking about of First, supply inland the barges.

You could mentioned growth retirements keep flattish.

in to Or is past cutoff Is aging. XX-year as overall given a mark? that viewed of working the barges realistic hard is see industry? it the So keep fleet something that inland

David W. Grzebinski

Historically, It's we a company XX retire if exactly major in age question. to major I'll a betting inspections certificate don't by well sense XX-year-old their but and science, in barge of investing great were color. is chemicals retired, decision, barges a That's make we economic a or removed. know of keep you asset. the XX-, an they saw the driven oil it give that inexact XXXX, does little the the rules but as we know do as

XX of that So age that an bucket. years, retired that barges the in average was

of way the of their try lack to to new I X to age adjust think carriers perhaps is construction to see stretch fleets. for you'll the

betting you the or interpret still XX that a rules Now still mean its oil barge major and We the know. But years. we'll I companies is up gets that's chemical of useful companies, the to against will play. run major how to don't decide thumb typically, life. in flex they

you tell plays would are that the like I carriers see still waiting to question. us great that So out. how

Sherif Elmaghrabi

the The in That's to what interesting. big on weeks, handful of stuff, back my couple And mentioning helpful. the circle on very with all up runs lead announced, lends a power second that's for of gen. long then seen on itself back just partnerships to but power Well, gen backlog we've want question, I gas fuel. imagine is same time which color nat the Ben last that And was I

customers what what So hearing from next you you're of over I'm years kind wondering, X-plus see and there? sort the of term longer opportunity

David W. Grzebinski

portfolio gen our multifaceted. Yes. power is Look,

New stationary major backup So stationary. cetera. center York Stock banks we the for York, New backup Exchange, example, of data installed some diesel et money centers gens, do for in most are They're

provide Costco bucket, a will situation. So or on of or plug a mobile diesel megawatt to diesel. or the a Target we'll in or that's stationary power storm disruptions. Think run come storms power X-megawatt backup utility around type that that's have can storms in ice X mobile and back we Then backup of diesel, where about generally X run full the or and Walmart a trailer store

for bucket that us is growing. So

get last backup that, need go which gas grow is as well. more and we rental stationary, to it year. or might that's mobile lot be assets. imagine, can diesel. CapEx our generation, backup saw into is You you a The just natural little continues power of power just growing a you then gas is natural mobile for Because up than cheaper bit demand as And and having good. And

of lot of there's mobile, as We that. some stationery. lot So that excitement do a around A well.

it to sell Some that by -- goes that hour. power the customers of is

of backup it Some of power. power, prime is it is some

one It's on the customers of buckets. But each those we're growing. too the all about without hard So portfolio. into get buckets those getting are of to excited specific whole

is many can is because generation industrial is cost exciting is. as, in do think say, do, have. the competitive but utility not really could I natural sub and per customers to of gas a cost what effective there for and it's big It's as to it kilowatt we able important that hour is useful needs the being we

Operator

question, Research. our that moment One Webber will [Operator Wasikowski and from for come of the Greg Instructions] line with next

Gregory Wasikowski

time just that worth kind to that XX%, getting order now, a getting for it. for the question. And what that you're do are for expected new. it pose number to a need it's we to is look home. is to guys I I order order a is deliveries probably at be time. XX% needs say have of I time but tonnage. it years. gets It's justify calm? It's We've following point we to who lot, you people -- answer for getting do XXXX point at asked we that order What -- That's of get and And couple want the stock XX% building think to talked worth they book. that the the heard the and to anymore? hammering some change and it's all hope what a a really, that It's a to about not the hammering better second the investors home to look nervous back question And been know question you answer start start not I point it's off outpace rate mostly or worth the I for I go in to in every this, remain need the replacement to quarter. David, that see that's in in be confirming XXXX, first say but if to want all

I'll So yes, there. stop

David W. Grzebinski

point, it's XX%, barge the day fair is I question because I've that $XX,XXX X, said to around for XX% right to said X, a No, for X a something, justify. years. a But X toe now need last your

ago, X have XX,XXX. would I I said years think probably

well, a years of cost probably The up? was gone it go for it from a barrel has large. ago, does million XX,XXX barge why So $X.X X --

paint cost mentioned, just side. up there now Tier clean it's has cost, then from it's X. Tier barrel go XX% XX,XXX to all think Now sure, $X.X And you labor a for but steel the it's barge only up. to probably, gone of it's Christian that's input. But the prices Tier all barge. X, we've the driven the then X I that's and gone cost, And boat for boats million What's side, as welding, that the about

more you million just that operation Tier of are kinds boats it. the operate regular on X boat considerations are engines about So all to for added It's in a expensive. least more at of The have X, tow The expensive. cost more $X cost.

-- then So also and just equipment up. financing gone has

when got talk pricing, has about talk of our of leverage we and So unlevered but many the cost borrowing they've usually competitors, returns, we gone for up.

that's So cost you together, put the why all to breakeven that and rise. continues

price some getting closed. So increases, really that delta even though we're hasn't

it hearing. on turn very build our numbers ball He retirement to Christian. kind back has XX crystal Now 'XX I'm what is specific going to of and then and

Christian G. O'Neil

David. Thanks, Yes.

XXXX is those can full. barges. inexact about to present capacity new science, book XX There's XX high-quality will good is lined tank year. The barge information. XX that we be to inland but barges have you another what probably of shipyard XXs delivered is into think, going that we about book, are that the XX will probably think barges about know order into tell barge XXXX were The majority I really inland bit orders, We're in this a a to to slide it's the and order slide the in. in was that we're XXXX. order the do book, build construction barges XX Regarding We we replacement. XX at But looking an at these of up

XXXX XX, delivery. XX well or wanted you beyond you're to get another If into build to bars that

from barges the think the States time shale we during of building chasing to I saw So build was is days diminished crude barrel. capacity point of it hyperaggressive the inland United when what a the the once in

years. I've supply my in as in So as check XX ever is it seen

maintenance which the of think an is I so XX barges to quite industry XX shape. a in we top XX and year-over-year, supply maintenance as at industry the the increase the bubble even And from, will confident continues. that, that very, go puts to this good majority the XX have of to of cycle through On XX% say, to also replacement, very side feel

require. So comes And big maintenance XXXX going we still way, see to a a high major that bubble that's the by level of in way. back in

XX, barge at you've together, group you seen mean all XX barges XXX-plus And I've take XX, when it, X compound years. a I next as So add barges a you if retired as that it. And XX-year-old ever ever group, that good in that to as that still got XXXX. in got need retire you I seen think the as all supply that we've you're or side clipping looks along

we've check think when and seen sizes you bake as all together, that I supply it. ever So

Gregory Wasikowski

last in answer is That's have really still stayed the has same has XX% that rapidly Kirby couple to able question up along helpful. the to is that of been that go number thinking answer kind to to the which about that your years, disconnect, while a bit rates costs need curious margins to of number that. XX% and A hear improve being with of increased guess. yet I a a same, is that rates I'm follow-up gotten we've the

yard improve how has industry number to answer constant? the availability. the and been from remained margins XX% been rising guys dots standpoint, But what -- you your even So that connect -- might still the though able you an for costs that have have generally can be

David W. Grzebinski

Yes. No.

had price we there. from we're that I not price. increases on price, think long And way just nominal our hard. reasonable Look, And still we invested a to real a basically, rates get get capital. return have needed work

for believe, our get return we on job, Our invested good capital. to shareholders a is

and inflation, we've to Christian? we still headway, have you making but add, we're some So the ways go. Anything trying to outpace want been to

Christian G. O'Neil

good of the through inflationary management done to environment. No, job we've executing a I'd the attribute it team.

really company and D&S. flows teams, and David both summarized that enjoy relationships. capitally I Marine disciplined good extremely it. And an the We're some think we through the DNA customer

like above get They Kirby. inflation good to And real around rate. We looks and dialogue what have stay able we've inflation listen. really been to

justifies of And us despite honestly, of why a that. service the you performing doing a and part is cost our environment lot on see team probably would great margin in that's the the I And we're say job.

David W. Grzebinski

are we and of pull a them Christian else really good size our often off really save and somewhere our able to to horsepower to the horsepower that in We of money. money our work Yes, try customers' makes system. Because point. redeploy save fleet,

to the money. for them really paying bars. just only work We they're So save hard

when to So know we money, you they'll part of all They to little that's work pay rates. so calculus more. them come a the save hard

is we to shouldn't some returns them. you we -- than rate more that. get shareholders as real real don't our to answer So see where increase But need want specific get any the

Operator

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

Kurt Niemietz

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

reach always, free to to me feel As we out afterwards.

Operator

for concluded. This today's attending conference you presentation. Thank has now

You disconnect. may now

Kirby (KEX) 30 Jan 252024 Q4 Earnings call transcript