Kirby Corporation Announces 2024 First Quarter Results
- Earnings per share for the first quarter of 2024 were $1.19, up from $0.68 in the previous year.
- Inland marine segment experienced strong market conditions with high operating margins and increased spot market prices.
- Coastal operating margins improved to high single to low double-digit range.
- Power generation at KDS accounted for 41% of revenues, showing significant growth.
- Kirby repurchased 498,505 shares at an average price of $83.82 for $41.8 million in the first quarter of 2024.
- Acquired 13 barges and two high horsepower boats from undisclosed seller.
- Christian O'Neil appointed as President and COO effective April 26, 2024.
- EBITDA for the first quarter of 2024 was $162.6 million compared to $119.1 million in the previous year.
- 2024 outlook is positive with expectations of steady earnings progression and strong market dynamics.
- Net cash provided by operating activities was $123.3 million with $81.0 million in capital expenditures.
- Total debt was $1,060.5 million with $490.9 million of liquidity available.
- Company expects to generate significant free cash flow and use it for share repurchases.
- Segment revenues in distribution and services are expected to be flat to slightly down with operating margins in the mid to high-single digits.
- Kirby anticipates net cash provided from operating activities of $600 million to $700 million in 2024.
- Capital spending is expected to range between $290 million to $330 million in 2024.
- None.
Insights
Reviewing Kirby Corporation's Q1 2024 financials, significant growth in earnings per share (EPS) from $0.68 to $1.19 year-over-year stands out. This uptick reflects a stronger operational performance, particularly in marine transportation, which saw revenue gains and margin expansion. The EPS increase is a positive indicator of profitability and could be attractive to investors seeking companies with improving earnings trajectory.
Another highlight is the 22% increase in delay days, which could be a concern, but it seems adequately managed as indicated by the high-teen operating margins in the inland marine sector. The acquisition of assets, which includes 13 barges and two boats, suggests a strategic move to bolster Kirby's service capacity, potentially improving its market positioning and customer service capabilities, likely contributing to future revenue growth.
Kirby's strategic moves, including its share repurchase program, are indicative of management's confidence in the company's intrinsic value. The repurchase of shares at an average price of $83.82 for a total of $41.8 million not only returns value to shareholders but also may support the stock price. Market response to buybacks can be positive if interpreted as a sign of undervaluation or a strong future outlook.
From a market perspective, the emphasis on Kirby's power generation segment is timely, reflecting a growing demand for energy infrastructure, which is becoming increasingly critical. This focus aligns well with broader industry trends and the ongoing global energy transition. The fact that it constitutes 41% of the company's distribution and services revenue signals a potential shift in the company's revenue mix, which could affect how investors evaluate risk and growth prospects.
The company's solid balance sheet, with a debt-to-capitalization ratio of 24.8% and its liquidity position are reassuring from a credit risk standpoint. Kirby's commitment to generating significant free cash flow and its intent to allocate much of this for share repurchases speaks to a balanced approach to capital allocation. Investors often scrutinize such strategies for indicators of financial health and strategic focus. The low debt level is particularly noteworthy given the current market environment, where many firms face pressure to de-leverage.
A strong liquidity position, with $75.2 million in cash and cash equivalents and $490.9 million available, provides flexibility in operations and the ability to weather potential economic downturns. This cushion is significant for investors who are vigilant about the sufficiency of a company's liquidity to cover short-term obligations and invest in long-term growth opportunities.
- First quarter 2024 earnings per share of
$1.19 - Inland marine experienced strong market conditions with a sequential increase in spot market prices and high-teens operating margins despite a sequential increase in delay days
- Coastal operating margins improved to high single to low double-digit range
- Breaking out power generation at KDS as its significance continues to grow, constituting
41% of KDS revenues
- Kirby repurchased 498,505 shares at an average price of
$83.82 for$41.8 million in the 2024 first quarter - Acquired 13 barges, including three specialty barges, and two high horsepower boats from undisclosed seller
- Quarterly earnings expected to strengthen as the year progresses
- Appoints Christian O’Neil as President and Chief Operating Officer effective April 26, 2024
HOUSTON, April 25, 2024 (GLOBE NEWSWIRE) -- Kirby Corporation (“Kirby”) (NYSE: KEX) today announced net earnings attributable to Kirby for the first quarter ended March 31, 2024, of
David Grzebinski, Kirby’s President and Chief Executive Officer, commented, “We are off to a solid start in 2024. Both of our segments performed well during the quarter, delivering improved revenue and operating income and our team executed well despite weather related delays in the marine transportation segment and continuing supply chain delays in distribution and services. We continue to see favorable fundamentals as 2024 progresses, and we expect steady quarterly earnings progression for the remainder of the year.
“In inland marine transportation, our operations were challenged by high winds, ice delays on the Illinois River, fog along the Gulf Coast, and lock delays throughout the system. Overall, delay days increased
“In coastal, market fundamentals remained strong with our barge utilization levels running in the mid to high
“In distribution and services, overall demand was stable across our markets with continued new orders and high levels of backlog. In power generation, strong order growth drove a
Segment Results – Marine Transportation
Marine transportation revenues for the 2024 first quarter were
In the inland market, average 2024 first quarter barge utilization was in the low to mid
In coastal, market conditions were strong during the quarter, with Kirby’s barge utilization in the mid to high
Segment Results – Distribution and Services
Distribution and services revenues for the 2024 first quarter were
Revenues in distribution and services were split
In the power generation market, revenues continue to grow as the need for 24/7 power and back up capabilities become more critical. Overall, power generation revenues represented approximately
In the commercial and industrial market, revenues and operating income decreased compared to the 2023 first quarter, as higher business levels in marine repair were offset by lower activity in on-highway. Overall, commercial and industrial revenues represented approximately
In the oil and gas market, revenues and operating income declined compared to the 2023 first quarter due to lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts partially offset by deliveries of e-frac equipment. Overall, oil and gas revenues represented approximately
Leadership Update
Today we announce the appointment of Christian G. O’Neil as Kirby’s President and Chief Operating Officer, effective tomorrow, April 26, 2024 at the conclusion of Kirby’s Annual Meeting. As President and COO, Mr. O’Neil will be responsible for the day-to-day operations of Kirby’s Marine Transportation and Distribution and Services businesses. Mr. Grzebinski commented “With over 25 years with the company, spanning roles across various businesses, Christian brings a wealth of experience, a history of operational excellence, and a strong customer focus that will greatly benefit Kirby and support our continued growth.” Mr. O’Neil previously served as President of the Marine Transportation businesses since 2018 and has been with Kirby since 1997. He holds a Master of Business Administration degree from Rice University, a Doctor of Jurisprudence from Tulane University and a Bachelor of Arts degree from Southern Methodist University.
Cash Generation
For the 2024 first quarter, EBITDA was
2024 Outlook
Commenting on the outlook for the remainder of 2024, Mr. Grzebinski said, “We are off to a solid start in 2024 and have a favorable outlook for the remainder of the year. Our balance sheet is strong, and we expect to generate significant free cash flow despite high levels of capex this year and expect to use the majority of free cash flow for share repurchases. We see favorable markets continuing and expect our businesses will produce improving financial results as we move through this year.”
In inland marine, our 2024 outlook anticipates positive market dynamics with steady customer demand and limited new barge construction in the industry. In addition to this, many industry units are scheduled for maintenance. With these favorable market conditions, we expect our barge utilization rates to be in the low to mid
In coastal marine, strong customer demand is expected throughout the year with barge utilization in the low to mid
In the distribution and services segment, despite the uncertainty from volatile commodity prices, we expect incremental demand for products, parts, and services in the segment. In commercial and industrial, the demand outlook in marine repair is strong while on highway is somewhat weak with the exception of refrigeration products and services. In power generation we anticipate continued strong growth as data center demand and the need for backup power is very strong. In oil and gas, activity levels are lower but seem to be bottoming. Our manufacturing backlog does provide stable levels of activity through most of 2024. We do anticipate extended lead times for certain OEM products to continue contributing to a volatile delivery schedule of new products in 2024 and into 2025. Overall, the Company expects segment revenues to be flat to slightly down on a full year basis with operating margins in the mid to high-single digits but slightly lower year-over-year due to mix.
Kirby expects to generate net cash provided from operating activities of
Conference Call
A conference call is scheduled for 7:30 a.m. Central Standard Time today, Thursday, April 25, 2024, to discuss the 2024 first quarter performance as well as the outlook for 2024. To listen to the webcast, please visit the Investor Relations section of Kirby’s website at www.kirbycorp.com. For listeners who wish to participate in the question and answer session via telephone, please pre-register at Kirby Earnings Call Registration. All registrants will receive dial-in information and a PIN allowing them to access the live call. A slide presentation for this conference call will be posted on Kirby’s website approximately 15 minutes before the start of the webcast. A replay of the webcast will be available for a period of one year by visiting the News & Events page in the Investor Relations section of Kirby’s website.
GAAP to Non-GAAP Financial Measures
The financial and other information to be discussed in the conference call is available in this press release and in a Form 8-K filed with the Securities and Exchange Commission. This press release and the Form 8-K includes a non-GAAP financial measure, EBITDA, which Kirby defines as net earnings attributable to Kirby before interest expense, taxes on income, and depreciation and amortization. A reconciliation of EBITDA with GAAP net earnings attributable to Kirby is included in this press release. This press release also includes non-GAAP financial measures which exclude certain one-time items, including earnings before taxes on income (excluding one-time items), net earnings attributable to Kirby (excluding one-time items), and diluted earnings per share (excluding one-time items). A reconciliation of these measures with GAAP is included in this press release. Management believes the exclusion of certain one-time items from these financial measures enables it and investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of Kirby’s normal operating results. This press release additionally includes a non-GAAP financial measure, free cash flow, which Kirby defines as net cash provided by operating activities less capital expenditures. A reconciliation of free cash flow with GAAP is included in this press release. Kirby uses free cash flow to assess and forecast cash flow and to provide additional disclosures on the Company’s liquidity. Free cash flow does not imply the amount of residual cash flow available for discretionary expenditures as it excludes mandatory debt service requirements and other non-discretionary expenditures. This press release also includes marine transportation performance measures, consisting of ton miles, revenue per ton mile, towboats operated and delay days. Comparable marine transportation performance measures for the 2023 year and quarters are available in the Investor Relations section of Kirby’s website, www.kirbycorp.com, under Financials.
Forward-Looking Statements
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 adverse economic conditions, industry competition and other competitive factors, adverse weather conditions such as high water, low water, tropical storms, hurricanes, tsunamis, fog and ice, tornados, marine accidents, lock delays, fuel costs, interest rates, construction of new equipment by competitors, government and environmental laws and regulations, and the timing, magnitude and number of acquisitions made by the Company. 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, 2023.
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, on the Gulf Intracoastal Waterway, and coastwise along all three United States coasts. Kirby transports petrochemicals, black oil, refined petroleum products and agricultural chemicals by tank barge. In addition, Kirby participates in the transportation of dry-bulk commodities in United States coastwise trade. Through the distribution and services segment, Kirby provides after-market service and genuine replacement parts for engines, transmissions, reduction gears, electric motors, drives, and controls, specialized electrical distribution and control systems, energy storage battery systems, and related equipment used in oilfield services, marine, power generation, on-highway, and other industrial applications. Kirby also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets. For the oil and gas market, Kirby manufactures and remanufactures oilfield service equipment, including pressure pumping units, and manufactures electric power generation equipment, specialized electrical distribution and control equipment, and high capacity energy storage/battery systems for oilfield customers.
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||
| Three Months | ||||||||
| 2024 | 2023 | |||||||
| (unaudited, $ in thousands, except per share amounts) | ||||||||
| Revenues: | ||||||||
| Marine transportation | $ | 475,412 | $ | 412,495 | ||||
| Distribution and services | 332,610 | 337,949 | ||||||
| Total revenues | 808,022 | 750,444 | ||||||
| Costs and expenses: | ||||||||
| Costs of sales and operating expenses | 550,681 | 542,080 | ||||||
| Selling, general and administrative | 90,206 | 88,849 | ||||||
| Taxes, other than on income | 8,044 | 9,186 | ||||||
| Depreciation and amortization | 57,642 | 51,109 | ||||||
| Gain on disposition of assets | (74 | ) | (2,230 | ) | ||||
| Total costs and expenses | 706,499 | 688,994 | ||||||
| Operating income | 101,523 | 61,450 | ||||||
| Other income | 3,269 | 6,443 | ||||||
| Interest expense | (13,151 | ) | (13,221 | ) | ||||
| Earnings before taxes on income | 91,641 | 54,672 | ||||||
| Provision for taxes on income | (21,726 | ) | (14,051 | ) | ||||
| Net earnings | 69,915 | 40,621 | ||||||
| Net loss attributable to noncontrolling interests | 153 | 77 | ||||||
| Net earnings attributable to Kirby | $ | 70,068 | $ | 40,698 | ||||
| Net earnings per share attributable to Kirby common stockholders: | ||||||||
| Basic | $ | 1.20 | $ | 0.68 | ||||
| Diluted | $ | 1.19 | $ | 0.68 | ||||
| Common stock outstanding (in thousands): | ||||||||
| Basic | 58,472 | 59,978 | ||||||
| Diluted | 58,819 | 60,272 | ||||||
| CONDENSED CONSOLIDATED FINANCIAL INFORMATION | ||||||||
| Three Months | ||||||||
| 2024 | 2023 | |||||||
| (unaudited, $ in thousands) | ||||||||
| EBITDA: (1) | ||||||||
| Net earnings attributable to Kirby | $ | 70,068 | $ | 40,698 | ||||
| Interest expense | 13,151 | 13,221 | ||||||
| Provision for taxes on income | 21,726 | 14,051 | ||||||
| Depreciation and amortization | 57,642 | 51,109 | ||||||
| $ | 162,587 | $ | 119,079 | |||||
| Capital expenditures | $ | 81,047 | $ | 73,199 | ||||
| March 31, 2024 | December 31, 2023 | |||||||
| (unaudited, $ in thousands) | ||||||||
| Cash and cash equivalents | $ | 75,216 | $ | 32,577 | ||||
| Long-term debt, including current portion | $ | 1,060,465 | $ | 1,016,595 | ||||
| Total equity | $ | 3,216,741 | $ | 3,186,677 | ||||
| Debt to capitalization ratio | 24.8 | % | 24.2 | % | ||||
| MARINE TRANSPORTATION STATEMENTS OF EARNINGS | ||||||||
| Three Months | ||||||||
| 2024 | 2023 | |||||||
| (unaudited, $ in thousands) | ||||||||
| Marine transportation revenues | $ | 475,412 | $ | 412,495 | ||||
| Costs and expenses: | ||||||||
| Costs of sales and operating expenses | 301,262 | 282,023 | ||||||
| Selling, general and administrative | 37,121 | 34,987 | ||||||
| Taxes, other than on income | 6,197 | 7,307 | ||||||
| Depreciation and amortization | 47,849 | 45,142 | ||||||
| Total costs and expenses | 392,429 | 369,459 | ||||||
| Operating income | $ | 82,983 | $ | 43,036 | ||||
| Operating margin | 17.5 | % | 10.4 | % | ||||
| DISTRIBUTION AND SERVICES STATEMENTS OF EARNINGS | ||||||||
| Three Months | ||||||||
| 2024 | 2023 | |||||||
| (unaudited, $ in thousands) | ||||||||
| Distribution and services revenues | $ | 332,610 | $ | 337,949 | ||||
| Costs and expenses: | ||||||||
| Costs of sales and operating expenses | 249,403 | 259,864 | ||||||
| Selling, general and administrative | 51,521 | 49,197 | ||||||
| Taxes, other than on income | 1,828 | 1,851 | ||||||
| Depreciation and amortization | 7,844 | 4,245 | ||||||
| Total costs and expenses | 310,596 | 315,157 | ||||||
| Operating income | $ | 22,014 | $ | 22,792 | ||||
| Operating margin | 6.6 | % | 6.7 | % | ||||
| OTHER COSTS AND EXPENSES | ||||||||
| Three Months | ||||||||
| 2024 | 2023 | |||||||
| (unaudited, $ in thousands) | ||||||||
| General corporate expenses | $ | 3,548 | $ | 6,608 | ||||
| Gain on disposition of assets | $ | (74 | ) | $ | (2,230 | ) | ||
ONE-TIME CHARGES
The 2023 first three months GAAP results include certain one-time charges. The following is a reconciliation of GAAP earnings to non-GAAP earnings, excluding the one-time items, for earnings before tax (pre-tax), net earnings attributable to Kirby (after-tax), and diluted earnings per share (per share):
| First Three Months 2023 | ||||||||||||
| Pre-Tax | After-Tax | Per Share | ||||||||||
| (unaudited, $ in millions except per share amounts) | ||||||||||||
| GAAP earnings | $ | 54.7 | $ | 40.7 | $ | 0.68 | ||||||
| Costs related to strategic review and shareholder engagement | 3.0 | 2.4 | 0.04 | |||||||||
| IRS refund interest income | (2.7 | ) | (2.2 | ) | (0.04 | ) | ||||||
| Earnings, excluding one-time items(2) | $ | 55.0 | $ | 40.9 | $ | 0.68 | ||||||
RECONCILIATION OF FREE CASH FLOW
The following is a reconciliation of GAAP net cash provided by operating activities to non-GAAP free cash flow(2):
| Three Months | ||||||||
| 2024 | 2023(3) | |||||||
| (unaudited, $ in millions) | ||||||||
| Net cash provided by operating activities | $ | 123.3 | $ | 16.5 | ||||
| Less: Capital expenditures | (81.0 | ) | (73.2 | ) | ||||
| Free cash flow(2) | $ | 42.3 | $ | (56.7 | ) | |||
| MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS | ||||||||
| Three Months | ||||||||
| 2024 | 2023 | |||||||
| Inland Performance Measurements: | ||||||||
| Ton Miles (in millions) (4) | 3,304 | 3,440 | ||||||
| Revenue/Ton Mile (cents/tm) (5) | 11.7 | 9.8 | ||||||
| Towboats operated (average) (6) | 286 | 282 | ||||||
| Delay Days (7) | 3,507 | 4,125 | ||||||
| Average cost per gallon of fuel consumed | $ | 2.82 | $ | 3.31 | ||||
| Barges (active): | ||||||||
| Inland tank barges | 1,078 | 1,043 | ||||||
| Coastal tank barges | 28 | 29 | ||||||
| Offshore dry-cargo barges | 4 | 4 | ||||||
| Barrel capacities (in millions): | ||||||||
| Inland tank barges | 23.8 | 23.2 | ||||||
| Coastal tank barges | 2.9 | 3.0 | ||||||
- 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, and depreciation and amortization. EBITDA is presented because of its wide acceptance as a financial indicator. EBITDA is one of the performance measures used in calculating performance compensation pursuant to Kirby’s annual incentive 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.
- Kirby uses certain non-GAAP financial measures to review performance excluding certain one-time items including: earnings before taxes on income, excluding one-time items; net earnings attributable to Kirby, excluding one-time items; and diluted earnings per share, excluding one-time items. Management believes the exclusion of certain one-time items from these financial measures enables it and investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the company's normal operating results. Kirby also uses free cash flow, which is defined as net cash provided by operating activities less capital expenditures, to assess and forecast cash flow and to provide additional disclosures on the Company’s liquidity. Free cash flow does not imply the amount of residual cash flow available for discretionary expenditures as it excludes mandatory debt service requirements and other non-discretionary expenditures. These non-GAAP financial measures are not calculations 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.
- See Kirby’s annual report on Form 10-K for the year ended December 31, 2023, and its quarterly report on Form 10-Q for the quarter ended March 31, 2023 for amounts provided by (used in) investing and financing activities.
- 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.
- Inland marine transportation revenues divided by ton miles. Example: First quarter 2024 inland marine transportation revenues of
$386.0 million divided by 3,304 million inland marine transportation ton miles = 11.7 cents. - Towboats operated are the average number of owned and chartered towboats operated during the period.
- 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.
Contact:
Kurt Niemietz
713-435-1077
FAQ
What were Kirby 's (KEX) earnings per share for the first quarter of 2024?
How many shares did Kirby repurchase in the first quarter of 2024 and at what price?
Who was appointed as President and COO of Kirby , effective April 26, 2024?
What was Kirby 's EBITDA for the first quarter of 2024 compared to the previous year?
What is Kirby 's 2024 outlook in terms of cash flow and capital spending?
