KIRBY CORPORATION

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Kirby 3Q 2021 Earnings Presentation

10/28/2021 | 08:33am

3Q 2021

Earnings Conference Call

October 28, 2021

Disclosures

Forward Looking Statements

Statements contained in this conference call 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, and the impact of the COVID-19 pandemic and the related response of governments on global and regional market conditions. 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, 2020.

Non-GAAP Financial Measures

This conference call may refer to certain non-GAAP or adjusted financial measures. Kirby uses certain non-GAAP financial measures to review performance including: Adjusted EBITDA; operating income (excluding one-time items); 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 that 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 as a result of uncertainty surrounding the impact of the COVID-19 pandemic on global and regional market conditions. 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. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings press release, and are also available on our website at www.kirbycorp.comin the Investor Relations section under Financials.

3Q 2021 Earnings

2

3Q 2021 Overview

Financial Summary

$ millions except earnings (loss) per share

3Q 2021

3Q 2020

Variance

%

2Q 2021

Variance

%

Revenues

$

598.9

$ 496.6

$ 102.3

21%

$ 559.6

$ 39.3

7%

Operating income

(316.9)

29.9

(346.8)

-1160%

24.0

(340.9)

-1420%

Net earnings (loss) attributable to Kirby

(264.7)

27.5

(292.2)

-1063%

10.2

(274.9)

-2695%

Earnings (loss) per share

(4.41)

0.46

(4.87)

-1059%

0.17

(4.58)

-2694%

Excluding one-time items:

Operating income1

23.8

29.9

(6.1)

-20%

24.0

(0.2)

-1%

Net earnings attributable to Kirby1

10.3

27.5

(17.2)

-63%

10.2

0.1

1%

Earnings per share1

0.17

0.46

(0.29)

-63%

0.17

-

0%

Note: For more information, see the Reconciliation of GAAP to Non-GAAP Financial Measures Excluding One-Time Items on Kirby's website at www.kirbycorp.com in the Investor Relations section under Financials.

1 Third quarter 2021 operating income, net earnings attributable to Kirby, and earnings per share exclude third quarter impairments of long-lived assets and goodwill related to coastal marine transportation totaling $340.7 million before-tax, $275.0 million after-tax, or $4.58 per share.

3Q 2021 Earnings

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Marine Transportation - 3Q Overview

Inland

  • COVID-19delta variant negatively impacted operations
    • Lower demand for refined products and crude
    • Reduced barge volumes and utilization
    • Positive employee cases challenged vessel crewing
    • Increased costs for additional chartered horsepower
  • Hurricane Ida significantly disrupted customers and barge operations (see slide 5 for more information)

Coastal

  • Challenging market conditions, but the spot market modestly improved
  • Barge utilization increased into the mid-70% range
  • Restructured the coastal business resulting in a one-time impairment charge (see slide 7 for more information)
    • Sold Hawaii marine assets
    • Retired underutilized wire barge and tugboat equipment
    • Long-termpositives include reduced risk profile, reduced costs and future capital needs, and improved profitability

3Q 2021 Earnings

4

Hurricane Ida

Results in prolonged shutdown of many Louisiana refineries and chemical plants

  • Hurricane Ida made landfall in SE Louisiana on August 29, 2021
    • Category 4 storm with sustained 150 mph winds
    • Storm surge caused the Mississippi River to flow backwards
    • Significant damage to refineries and chemical plants, industry barges, customer docks, and waterway infrastructure
  • Refineries and chemical plants forced into extended emergency shutdowns
    • Over 2.0 mb/d of refinery capacity was taken offline
    • Gulf Coast refinery utilization declined to 79% in September
    • Southeast Louisiana ethylene operating rates declined from 89% in August to 25% in September with production declining ~75%
    • Coproduct supply declined ~67% between August and September
  • One of Kirby's largest inland customers only resumed partial operations in mid-October
  • Significant reductions in inland volumes in September and October
  • Gulf Intracoastal Waterway remains closed near New Orleans, creating significant navigational delays and reducing operating efficiencies

Hurricane Ida impacted Kirby 3Q earnings by approximately $0.08 per share

3Q 2021 Earnings

5

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Kirby Corporation published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 12:32:13 UTC.

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