kirbyHOUSTON – Kirby Corporation (NYSE:KEX), the largest domestic tank barge operator in the United States announced their 4th quarter earnings today, revealing a slight increase to $57.9 million compared with $56.2 million in Q4 2011.

Joe Pyne, Kirby’s Chairman and Chief Executive Officer, commented on the results:

“Our fourth quarter results benefited from higher demand and favorable pricing in our coastal marine transportation markets, as well as a contribution from our two fourth quarter coastal acquisitions. We were also able to manage through the Mississippi River System’s low water issues and Hurricane Sandy with only an estimated $.02 to $.03 per share negative impact.”

Revenues in Q4 were $512.6 million, reflecting a 6.9% decrease from Q4 2011.

For 2012, net earnings increased 14.4 percent to $209.4 million over 2011

 

Kirby’s Marine Transportation group earned $381.0 million in Q4 revenues, reflecting a 13.6 percent increase over 2011 figures.  4th quarter operating incomes were up 23 percent to $89.8 million.

Inland tank barge fleet utilization during the fourth quarter remained in the 90% to 95% range with favorable pricing trends, reflecting a continued healthy demand for the transportation of petrochemical, black oil products and refined petroleum products. With the exception of persistent low water conditions on the Mississippi River System which led to lower revenues and ton miles, weather conditions during the fourth quarter were consistent with normal seasonal weather.

Kirby’s coastal fleet generated approximately 25% of the marine transportation 2012 fourth quarter revenues. The operating results reflected higher fleet utilization in the coastal markets, as well as higher pricing levels. The results also included the accretive acquisitions of Allied Transportation Company vessels on November 1, 2012 and Penn Maritime Inc. on December 14, 2012.

The marine transportation operating margin for the 2012 fourth quarter was 23.6% compared with 21.8% for the fourth quarter of 2011. The higher 2012 fourth quarter operating margin reflected continued favorable inland tank barge utilization and pricing, as well as improved coastal tank barge utilization and pricing, partially offset by the negative impact of the low water conditions and Hurricane Sandy.

Cash Generation

Kirby continued to generate strong cash flow during 2012, with EBITDA of $506.9 million compared with $436.2 million for 2011. The cash flow was used in part to fund capital expenditures of $312.2 million, including $135.6 million for new inland tank barge and towboat construction, $60.4 million for progress payments on the construction of two offshore dry-bulk barge and tug units scheduled for completion in the 2013 first half, and $116.2 million primarily for upgrades to the existing inland and coastal fleets. Total debt as of December 31, 2012 was $1.14 billion and the debt-to capitalization ratio was 39.9%.

Outlook

Commenting on the 2013 full year and first quarter market outlook and guidance, Mr. Pyne said,

“Our earnings per share guidance for 2013 is $4.00 to $4.20 per share compared with $3.73 for 2012. Our 2013 guidance assumes continued strong inland marine transportation markets with 90% to 95% equipment utilization levels, leading to favorable term and spot contract pricing. For our coastal marine transportation markets, our 2013 guidance assumes higher equipment utilization levels than 2012, leading to favorable term and spot contract pricing trends. Our guidance assumes our diesel engine services land-based market will continue to experience ongoing softness throughout 2013, and our marine and power generation markets will be consistent with 2012. However, the major contributor between our high and low end 2013 guidance is our coastal marine transportation markets and its equipment utilization rates and pricing trends.”

Regarding the 2013 first quarter guidance, Mr. Pyne comments,

“Our 2013 first quarter earnings guidance is $.82 to $.92 per share compared with $.91 per share reported for the 2012 first quarter. The 2012 first quarter’s results included a very strong landbased diesel engine services market, which we do not believe will reoccur in 2013. The first quarter guidance includes unfavorable winter weather conditions for our inland and coastal transportation markets, as well as continued low water issues and related restrictions on a portion of the upper Mississippi River, primarily between St. Louis, Missouri and Cairo, Illinois. We anticipate continued strong inland equipment utilization with favorable pricing trends, as well as stronger coastal equipment utilization with improving pricing trends. For our diesel engine services segment, we anticipate a continued weak land-based market and stable marine and power generation markets.

Our 2013 capital spending guidance range is $190 to $200 million, including approximately $115 million for the construction of 55 inland tank barges and three inland towboats, and approximately $10 million for final progress payments on the construction of two offshore dry-bulk barge and tugboat units scheduled for delivery in the 2013 first half. The balance of approximately $65 to $75 million is primarily capital upgrades and improvements to existing marine equipment.”

About Kirby Corporation
Kirby Corporation, based in Houston, Texas, is the nation’s largest domestic tank barge
operator, transporting bulk liquid products throughout the Mississippi River System, the Gulf
Intracoastal Waterway, coastwise along all three United States coasts and in Alaska and
Hawaii. Kirby transports petrochemicals, black oil products, refined petroleum products and
agricultural chemicals by tank barge. Through the diesel engine services segment, Kirby
provides after-market service for medium-speed and high-speed diesel engines and
reduction gears used in marine and power generation applications. Kirby also distributes
and services high-speed diesel engines, transmissions, pumps, compression products and
manufactures and remanufactures oilfield service equipment, including pressure pumping
units, for land-based pressure pumping and oilfield service markets.
Statements contained in this press release with respect to the future are forward-looking
statements. These statements reflect management’s reasonable judgment with respect to
future events. Forward-looking statements involve risks and uncertainties. Actual results
could differ materially from those anticipated as a result of various factors, including cyclical
or other downturns in demand, significant pricing competition, unanticipated additions to
industry capacity, changes in the Jones Act or in U.S. maritime policy and practice, fuel
costs, interest rates, weather conditions, and timing, magnitude and number of acquisitions
made by Kirby. Forward-looking statements are based on currently available information and
Kirby assumes no obligation to update any such statements. A list of additional risk factors
can be found in Kirby’s annual report on Form 10-K for the year ended December 31, 2011
filed with the Securities and Exchange Commission. 5

Barges (active):

Inland tank barges ……………………………………………………………………………………… 841 819
Coastal tank barges …………………………………………………………………………………… 81 59
Offshore dry-cargo barges ………………………………………………………………………….. 8 4
Barrel capacities (in millions):
Inland tank barges ……………………………………………………………………………………… 16.7 16.2
Coastal tank barges …………………………………………………………………………………… 6.3 3.8

(1)
Kirby has historically evaluated its operating performance using numerous measures, one of which is EBITDA, a non-GAAP financial
measure. Kirby defines EBITDA as net earnings attributable to Kirby before interest expense, taxes on income, depreciation and
amortization. EBITDA is presented because of its wide acceptance as a financial indicator. EBITDA is one of the performance
measures used in Kirby’s incentive bonus plan. EBITDA is also used by rating agencies in determining Kirby’s credit rating and by
analysts publishing research reports on Kirby, as well as by investors and investment bankers generally in valuing companies. EBITDA
is not a calculation based on generally accepted accounting principles and should not be considered as an alternative to, but should
only be considered in conjunction with, Kirby’s GAAP financial information.
(2)
Ton miles indicate fleet productivity by measuring the distance (in miles) a loaded tank barge is moved. Example: A typical 30,000
barrel tank barge loaded with 3,300 tons of liquid cargo is moved 100 miles, thus generating 330,000 ton miles.
(3)
Inland marine transportation revenues divided by ton miles. Example: Fourth quarter 2012 inland marine transportation revenues of
$280,968,000 divided by 2,957,000,000 marine transportation ton miles = 9.5 cents.
(4)
Towboats operated are the average number of owned and chartered towboats operated during the period.
(5)
Delay days measures the lost time incurred by a tow (towboat and one or more tank barges) during transit. The measure includes
transit delays caused by weather, lock congestion and other navigational factors.

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