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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(I.R.S. Employer Identification No.) |
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(State or other jurisdiction of incorporation or organization) |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 4, 2023
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
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June 30,
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December 31,
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($ in thousands) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable: |
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Trade – less allowance for doubtful accounts |
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Other |
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Inventories – net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment |
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Accumulated depreciation |
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(
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(
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Property and equipment – net |
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Operating lease right-of-use assets |
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Goodwill |
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Other intangibles, net |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Bank notes payable |
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$ |
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$ |
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Income taxes payable |
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Accounts payable |
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Accrued liabilities |
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Current portion of operating lease liabilities |
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Deferred revenues |
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Total current liabilities |
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Long-term debt, net – less current portion |
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Deferred income taxes |
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Operating lease liabilities – less current portion |
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Other long-term liabilities |
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Total long-term liabilities |
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Contingencies and commitments |
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Equity: |
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Kirby stockholders’ equity: |
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Common stock, $
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Additional paid-in capital |
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Accumulated other comprehensive income – net |
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Retained earnings |
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Treasury stock – at cost,
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(
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(
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Total Kirby stockholders’ equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See accompanying notes to condensed financial statements.
2
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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($ in thousands, except per share amounts) |
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Revenues: |
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Marine transportation |
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$ |
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$ |
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$ |
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$ |
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Distribution and services |
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Total revenues |
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Costs and expenses: |
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Costs of sales and operating expenses |
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Selling, general and administrative |
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Taxes, other than on income |
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Depreciation and amortization |
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Gain on disposition of assets |
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(
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(
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(
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(
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Total costs and expenses |
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Operating income |
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Other income |
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Interest expense |
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(
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(
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(
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(
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Earnings before taxes on income |
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Provision for taxes on income |
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(
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(
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(
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(
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Net earnings |
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Net (earnings) loss attributable to noncontrolling interests |
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(
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(
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) |
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Net earnings attributable to Kirby |
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$ |
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$ |
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$ |
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$ |
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Net earnings per share attributable to Kirby common stockholders: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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|
See accompanying notes to condensed financial statements.
3
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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||||||||||
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2023 |
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2022 |
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2023 |
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2022 |
|
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($ in thousands) |
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Net earnings |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income, net of taxes: |
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Pension and postretirement benefits |
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Foreign currency translation adjustments |
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(
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) |
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(
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) |
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Total other comprehensive income, net of taxes |
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Total comprehensive income, net of taxes |
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Net (earnings) loss attributable to noncontrolling interests |
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(
|
) |
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(
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) |
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Comprehensive income attributable to Kirby |
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$ |
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$ |
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$ |
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$ |
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|
See accompanying notes to condensed financial statements.
4
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
|
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Six Months Ended June 30, |
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|||||
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2023 |
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2022 |
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($ in thousands) |
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Cash flows from operating activities: |
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Net earnings |
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$ |
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$ |
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Adjustments to reconcile net earnings to net cash provided by operations: |
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Depreciation and amortization |
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Provision for deferred income taxes |
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Amortization of share-based compensation |
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Amortization of major maintenance costs |
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Other |
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(
|
) |
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(
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) |
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Decrease in cash flows resulting from changes in operating assets and liabilities, net |
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(
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) |
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(
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) |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Capital expenditures |
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(
|
) |
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(
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) |
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Acquisitions of businesses |
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(
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) |
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Proceeds from disposition of assets |
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Net cash used in investing activities |
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(
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) |
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(
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) |
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Cash flows from financing activities: |
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Borrowings on bank credit facilities, net |
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Borrowings on long-term debt |
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Payments on long-term debt |
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(
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) |
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(
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) |
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Payment of debt issuance costs |
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(
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) |
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Proceeds from exercise of stock options |
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Payments related to tax withholding for share-based compensation |
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(
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) |
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(
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) |
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Treasury stock purchases |
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(
|
) |
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(
|
) |
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Return of investment to noncontrolling interest and other |
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(
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) |
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(
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) |
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Net cash used in financing activities |
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(
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) |
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(
|
) |
|
Decrease in cash and cash equivalents |
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(
|
) |
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(
|
) |
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Cash and cash equivalents, beginning of year |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental disclosures of cash flow information: |
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Cash paid (received) during the period: |
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Interest paid |
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$ |
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$ |
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Income taxes paid (refunded), net |
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$ |
(
|
) |
|
$ |
|
|
|
Operating cash outflow from operating leases |
|
$ |
|
|
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$ |
|
|
|
Non-cash investing activity: |
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|
Capital expenditures included in accounts payable |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
Right-of-use assets obtained in exchange for lease obligations |
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$ |
|
|
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$ |
|
|
See accompanying notes to condensed financial statements.
5
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
|
|
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Accumulated |
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Additional |
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Other |
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Common Stock |
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Paid-in- |
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Comprehensive |
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Retained |
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Treasury Stock |
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Noncontrolling |
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Shares |
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Amount |
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Capital |
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Income, Net |
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Earnings |
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Shares |
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Amount |
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Interests |
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Total |
|
|||||||||
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|
(in thousands) |
|
|||||||||||||||||||||||||||||||||
|
Balance at March 31, 2023 |
|
|
|
|
$ |
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|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
Issuance of stock for equity awards, net of forfeitures |
|
— |
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|
|
— |
|
|
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(
|
) |
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|
— |
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|
|
— |
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— |
|
|
|
— |
|
|
Tax withholdings on equity award vesting |
|
— |
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|
— |
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|
|
— |
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|
|
— |
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|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
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(
|
) |
|
Amortization of unearned share-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
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|
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|
Treasury stock purchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Excise taxes on treasury stock purchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Total comprehensive income, net of taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
Balance at June 30, 2023 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Common Stock |
|
|
Paid-in- |
|
|
Comprehensive |
|
|
Retained |
|
|
Treasury Stock |
|
|
Noncontrolling |
|
|
|
|
|||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income, Net |
|
|
Earnings |
|
|
Shares |
|
|
Amount |
|
|
Interests |
|
|
Total |
|
|||||||||
|
|
(in thousands) |
|
|||||||||||||||||||||||||||||||||
|
Balance at March 31, 2022 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
Stock option exercises |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
|
|
|
|
Issuance of stock for equity awards, net of forfeitures |
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Tax withholdings on equity award vesting |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Amortization of unearned share-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
Treasury stock purchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Total comprehensive income, net of taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return of investment to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
Balance at June 30, 2022 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to condensed financial statements.
6
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Common Stock |
|
|
Paid-in- |
|
|
Comprehensive |
|
|
Retained |
|
|
Treasury Stock |
|
|
Noncontrolling |
|
|
|
|
|||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income, Net |
|
|
Earnings |
|
|
Shares |
|
|
Amount |
|
|
Interests |
|
|
Total |
|
|||||||||
|
|
(in thousands) |
|
|||||||||||||||||||||||||||||||||
|
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
Stock option exercises |
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Issuance of stock for equity awards, net of forfeitures |
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Tax withholdings on equity award vesting |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Amortization of share-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
Treasury stock purchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Excise taxes on treasury stock purchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Total comprehensive income, net of taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
|
|
|
Balance at June 30, 2023 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Common Stock |
|
|
Paid-in- |
|
|
Comprehensive |
|
|
Retained |
|
|
Treasury Stock |
|
|
Noncontrolling |
|
|
|
|
|||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income, Net |
|
|
Earnings |
|
|
Shares |
|
|
Amount |
|
|
Interests |
|
|
Total |
|
|||||||||
|
|
(in thousands) |
|
|||||||||||||||||||||||||||||||||
|
Balance at December 31, 2021 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
Stock option exercises |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Issuance of stock for equity awards, net of forfeitures |
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Tax withholdings on equity award vesting |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Amortization of share-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
Treasury stock purchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
Total comprehensive income, net of taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Return of investment to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(
|
) |
|
|
(
|
) |
|
Balance at June 30, 2022 |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to condensed financial statements.
7
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis for Preparation of the Condensed Financial Statements
The condensed financial statements included herein have been prepared by Kirby Corporation and its consolidated subsidiaries (“Kirby” or the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including significant accounting policies normally included in annual financial statements, have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 . Certain reclassifications have been made to reflect the current presentation of financial information.
(2) Acquisition
On March 31, 2022, the Company paid $
(3) Revenues
The following table sets forth the Company’s revenues by major source (in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Marine transportation segment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Inland transportation |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Coastal transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Distribution and services segment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Commercial and industrial |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Oil and gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Contract liabilities represent advance consideration received from customers, and are recognized as revenue over time as the related performance obligation is satisfied. Revenues recognized during the six months ended June 30, 2023 and 2022 that were included in the opening contract liability balances were
$
(4) Segment Data
The Company’s operations are aggregated into
Marine Transportation Segment (“KMT”) — Provides marine transportation by United States flagged vessels principally of liquid cargoes throughout the United States inland waterway system, along all three United States coasts, and, to a lesser extent, in United States coastal transportation of dry-bulk cargoes. The principal products transported include petrochemicals, black oil, refined petroleum products, and agricultural chemicals.
Distribution and Services Segment (“KDS”) — Provides after-market services and genuine replacement parts for engines, transmissions, reduction gears, and related equipment used in oilfield services, marine, power generation, on-highway, and other industrial applications. The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, and manufactures and remanufactures oilfield service equipment, including pressure pumping units, electric power generation equipment, specialized electrical distribution and control equipment, and high capacity energy storage/battery systems for oilfield service and railroad customers.
8
The Company’s
The following tables set forth the Company’s revenues and profit or loss by reportable segment and total assets (in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Marine transportation |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Distribution and services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Segment profit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Marine transportation |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Distribution and services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
||
|
Total assets: |
|
|
|
|
|
|
||
|
Marine transportation |
|
$ |
|
|
|
$ |
|
|
|
Distribution and services |
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
The following table presents the details of “Other” segment loss (in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
General corporate expenses |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
Gain on disposition of assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
The following table presents the details of “Other” total assets (in thousands):
|
|
|
June 30,
|
|
|
December 31,
|
|
||
|
General corporate assets |
|
$ |
|
|
|
$ |
|
|
|
Investment in affiliates |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
9
(5) Long-Term Debt
The following table presents the carrying value and fair value (determined using inputs characteristic of a Level 2 fair value measurement) of debt outstanding (in thousands):
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||||||||||
|
|
|
Carrying Value |
|
|
Fair Value |
|
|
Carrying Value |
|
|
Fair Value |
|
||||
|
Revolving Credit Facility due
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Term Loan due
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit line due
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized debt discounts and issuance costs (b) |
|
|
(
|
) |
|
|
— |
|
|
|
(
|
) |
|
|
— |
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The following table presents borrowings and payments under the bank credit facilities (in thousands):
|
|
|
Six Months Ended June 30, |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
Borrowings on bank credit facilities |
|
$ |
|
|
|
$ |
|
|
|
Payments on bank credit facilities |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
$ |
|
|
|
$ |
|
|
At the beginning of 2022, the Company had an amended and restated credit agreement (the “2024 Credit Agreement”) with a group of commercial banks, with JPMorgan Chase Bank, N.A. as the administrative agent bank, that allowed for an $
On July 29, 2022, the Company entered into a new credit agreement (the “2027 Credit Agreement”) with a group of commercial banks, with JPMorgan Chase Bank, N.A. as the administrative agent bank that allows for a $
The 2027 Term Loan is repayable in quarterly installments, with no repayments until June 30, 2025, in increasing percentages of the original principal amount of the loan, with the remaining unpaid balance of approximately $
10
On February 3, 2022, the Company entered into a note purchase agreement for the issuance of $
The Company has a $
(6) Leases
The Company currently leases various facilities and equipment under cancelable and noncancelable operating leases. The accounting for the Company’s leases may require judgments, which include determining whether a contract contains a lease, allocating the consideration between lease and non-lease components, and determining the incremental borrowing rates. Leases with an initial noncancelable term of 12 months or less are not recorded on the balance sheet and related lease expense is recognized on a straight-line basis over the lease term. The Company has also elected to combine lease and non-lease components on all classes of leased assets, except for leased towing vessels, for which the Company estimates approximately
Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year were as follows (in thousands):
|
|
|
June 30,
|
|
|
December 31,
|
|
||
|
2023 |
|
$ |
|
|
|
$ |
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
2025 |
|
|
|
|
|
|
|
|
|
2026 |
|
|
|
|
|
|
|
|
|
2027 |
|
|
|
|
|
|
|
|
|
Thereafter |
|
|
|
|
|
|
|
|
|
Total lease payments |
|
|
|
|
|
|
|
|
|
Less: imputed interest |
|
|
(
|
) |
|
|
(
|
) |
|
Operating lease liabilities |
|
$ |
|
|
|
$ |
|
|
The following table summarizes lease costs (in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Operating lease cost |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sublease income |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The following table summarizes other supplemental information about the Company’s operating leases:
|
|
|
June 30,
|
|
|
December 31,
|
|
||
|
Weighted average discount rate |
|
|
|
% |
|
|
|
% |
|
Weighted average remaining lease term |
|
|
|
|
|
|
||
11
(7) Stock Award Plans
The compensation cost that has been charged against earnings for the Company’s stock award plans and the income tax benefit recognized in the statement of earnings for stock awards were as follows (in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Compensation cost |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Income tax benefit |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
During the six months ended June 30, 2023, the Company grant
ed
(8) Taxes on Income
At December 31, 2022, the Company had a federal income tax receivable of
$
Earnings before taxes on income and details of the provision (benefit) for taxes on income were as follows (in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Earnings before taxes on income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
United States |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Foreign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Provision (benefit) for taxes on income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Federal: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and local: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign - current |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
12
(9) Earnings Per Share
The following table presents the components of basic and diluted earnings per share (in thousands, except per share amounts):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Net earnings attributable to Kirby |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Undistributed earnings allocated to restricted shares |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Earnings available to Kirby common stockholders – basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed earnings allocated to restricted shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed earnings reallocated to restricted shares |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Earnings available to Kirby common stockholders – diluted |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average common stock issued and outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average unvested restricted stock |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Weighted average common stock outstanding – basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of stock options and restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding – diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net earnings per share attributable to Kirby common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Diluted |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Certain outstanding options to purchase approximately
(10) Inventories
The following table presents the details of inventories – net (in thousands):
|
|
|
June 30,
|
|
|
December 31,
|
|
||
|
Finished goods |
|
$ |
|
|
|
$ |
|
|
|
Work in process |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
(11) Retirement Plans
The Company sponsors a defined benefit plan for certain of its inland vessel personnel and shore based tankermen. The plan benefits are based on an employee’s years of service and compensation. The plan assets consist primarily of equity and fixed income securities.
On April 12, 2017, the Company amended its pension plan to cease all benefit accruals for periods after May 31, 2017 for certain participants. Participants grandfathered and not impacted were those, as of the close of business on May 31, 2017, who either (a) had completed
The Company’s pension plan funding strategy is to make annual contributions in amounts equal to or greater than amounts necessary to meet minimum government funding requirements. The plan’s benefit obligations are based on a variety of demographic and economic assumptions, and the pension plan assets’ returns are subject to various risks, including market and interest rate risk, making an accurate prediction of the pension plan contribution difficult. Based on current pension plan assets and market conditions, the Company does not expect to make a contribution to the Kirby pension plan during 2023.
13
On February 14, 2018, with the acquisition of Higman Marine, Inc. and its affiliated companies (“Higman”), the Company assumed Higman’s pension plan for its inland vessel personnel and office staff. On March 27, 2018, the Company amended the Higman pension plan to close it to all new entrants and cease all benefit accruals for periods after May 15, 2018 for all participants. The Company made contributions of
$
The Company sponsors an unfunded defined benefit health care plan that provides limited postretirement medical benefits to employees who meet minimum age and service requirements, and to eligible dependents. The plan is contributory, with retiree contributions adjusted annually. The plan eliminated coverage for future retirees as of December 31, 2011. The Company also has an unfunded defined benefit supplemental executive retirement plan (“SERP”) that was assumed in an acquisition in 1999. That plan ceased to accrue additional benefits effective January 1, 2000.
The components of net periodic benefit cost for the Company’s defined benefit plans were as follows (in thousands):
|
|
|
Pension Benefits |
|
|||||||||||||
|
|
|
Pension Plans |
|
|
SERP |
|
||||||||||
|
|
|
Three Months Ended June 30, |
|
|
Three Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Components of net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Service cost |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected return on plan assets |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
Amortization of actuarial loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
Pension Benefits |
|
|||||||||||||
|
|
|
Pension Plans |
|
|
SERP |
|
||||||||||
|
|
|
Six Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Components of net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Service cost |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected return on plan assets |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
Amortization of actuarial loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
The components of net periodic benefit cost for the Company’s postretirement benefit plan were as follows (in thousands):
|
|
|
Other Postretirement Benefits |
|
|||||||||||||
|
|
|
Postretirement Welfare Plan |
|
|||||||||||||
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Components of net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest cost |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Amortization of actuarial gain |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Net periodic benefit cost |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
(12) Other Comprehensive Income
The Company’s changes in other comprehensive income were as follows (in thousands):
|
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
|
|
|
Gross
|
|
|
Income Tax (Provision) Benefit |
|
|
Net Amount |
|
|
Gross
|
|
|
Income Tax Provision |
|
|
Net
|
|
||||||
|
Pension and postretirement benefits (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Amortization of net actuarial (gain) loss |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
Actuarial gains |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
Total |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
14
|
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
|
|
|
Gross
|
|
|
Income Tax (Provision) Benefit |
|
|
Net Amount |
|
|
Gross
|
|
|
Income Tax Provision |
|
|
Net
|
|
||||||
|
Pension and postretirement benefits (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Amortization of net actuarial (gain) loss |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
Actuarial gains |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
Total |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
(a) Actuarial gains are amortized into other income (expense). ( See Note 11, Retirement Plans)
(13) Contingencies and Commitments
On October 13, 2016, the tug Nathan E. Stewart and barge DBL 55, an articulated tank barge and tugboat unit (“ATB”) owned and operated by Kirby Offshore Marine, LLC, a wholly owned subsidiary of the Company, ran aground at the entrance to Seaforth Channel on Atholone Island, British Columbia. The grounding resulted in a breach of a portion of the Nathan E. Stewart’s fuel tanks causing a discharge of diesel fuel into the water. The United States Coast Guard and the National Transportation Safety Board designated the Company as a party of interest in their investigation as to the cause of the incident. The Canadian authorities including Transport Canada and the Canadian Transportation Safety Board investigated the cause of the incident. On October 10, 2018, the Heiltsuk First Nation filed a civil action in the British Columbia Supreme Court against a subsidiary of the Company, the master and pilot of the tug, the vessels and the Canadian government seeking unquantified damages as a result of the incident. On May 1, 2019, the Company filed a limitation action in the Federal Court of Canada seeking limitation of liability relating to the incident as provided under admiralty law. The Heiltsuk First Nation’s civil claim has been consolidated into the Federal Court limitation action as of July 26, 2019 and it is expected that the Federal Court of Canada will decide all claims against the Company. The Company is unable to estimate the potential exposure in the civil proceeding. The Company has various insurance policies covering liabilities including pollution, property, marine and general liability and believes that it has satisfactory insurance coverage for the cost of cleanup and salvage operations as well as other potential liabilities arising from the incident. The Company believes its accrual of such estimated liability is adequate for the incident and does not expect the incident to have a material adverse effect on its business or financial condition.
In addition, the Company is involved in various legal and other proceedings which are incidental to the conduct of its business, none of which in the opinion of management will have a material effect on the Company’s financial condition, results of operations, or cash flows. Management believes its accrual of such estimated liability is adequate and believes that it has adequate insurance coverage or has meritorious defenses for these other claims and contingencies.
The Company has issued guaranties or obtained standby letters of credit and performance bonds supporting performance by the Company and its subsidiaries of contractual or contingent legal obligations of the Company and its subsidiaries incurred in the ordinary course of business. The aggregate notional value of these instruments is
$
(14) Subsequent Event
On July 14, 2023, the Company purchased
15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Statements contained in this Form 10-Q that are not historical facts, including, but not limited to, any projections contained herein, are forward-looking statements and involve a number of risks and uncertainties. Such statements involve risks and uncertainties. Such statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” or “continue,” or the negative thereof or other variations thereon or comparable terminology. The actual results of the future events described in such forward-looking statements in this Form 10-Q could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: 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, COVID-19 or other pandemics, 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. For a more detailed discussion of factors that could cause actual results to differ from those presented in forward-looking statements, see Item 1A-Risk Factors found in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022. Forward-looking statements are based on currently available information and the Company assumes no obligation to update any such statements. For purposes of Management’s Discussion, all net earnings per share attributable to Kirby common stockholders are “diluted earnings per share.”
Overview
The Company 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. The Company transports petrochemicals, black oil, refined petroleum products and agricultural chemicals by tank barge. Through KDS, the Company provides after-market service and parts for engines, transmissions, reduction gears and related equipment used in oilfield services, marine, power generation, on-highway, and other industrial applications. The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, and manufactures and remanufactures oilfield service equipment, including pressure pumping units, manufactures cementing and pumping equipment as well as coil tubing and well intervention equipment, electric power generation equipment, specialized electrical distribution and control equipment, and high capacity energy storage/battery systems for oilfield service and railroad customers.
The following table summarizes key operating results of the Company (in thousands, except per share amounts):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Total revenues |
|
$ |
777,248 |
|
|
$ |
697,964 |
|
|
$ |
1,527,692 |
|
|
$ |
1,308,746 |
|
|
Net earnings attributable to Kirby |
|
$ |
57,367 |
|
|
$ |
28,457 |
|
|
$ |
98,065 |
|
|
$ |
45,891 |
|
|
Net earnings per share attributable to Kirby common stockholders – diluted |
|
$ |
0.95 |
|
|
$ |
0.47 |
|
|
$ |
1.63 |
|
|
$ |
0.76 |
|
|
Net cash provided by operating activities |
|
|
|
|
|
|
|
$ |
227,949 |
|
|
$ |
95,644 |
|
||
|
Capital expenditures |
|
|
|
|
|
|
|
$ |
171,245 |
|
|
$ |
79,059 |
|
||
The 2023 first quarter included $3.0 million before taxes, $2.4 million after taxes, or $0.04 per share of costs related to strategic review and shareholder engagement and $2.7 million before taxes, $2.2 million after taxes, or $0.04 per share of other income associated with the interest on the refund from the IRS. The 2022 second quarter included $1.5 million before taxes, $1.3 million after taxes, or $0.02 per share of severance expense.
Cash provided by operating activities for the 2023 first six months increased in comparison to the 2022 first six months primarily due to higher business activity levels and the receipt of the IRS refund. For the 2023 first six months, capital expenditures of $171.2 million included $128.2 million in KMT and $43.0 million in KDS and corporate, each more fully described under Cash Flow and Capital Expenditures below.
The Company projects that capital expenditures for 2023 will be in the $300 million to $380 million range. Approximately $240 million is primarily for maintenance capital and improvements to existing marine equipment, including ballast water treatment systems on some coastal vessels, and facility improvements. The 2023 construction program also consists of growth capital of up to approximately $40 million for the construction of specialized inland equipment, and of up to approximately $100 million for new electric fracturing equipment.
The Company’s debt-to-capitalization ratio decreased to 24.3% at June 30, 2023 from 26.2% at December 31, 2022, primarily due an increase in total equity, primarily from net earnings attributable to Kirby of $98.1 million, and a reduction of debt outstanding of $81.2 million, partially offset by treasury stock purchases of $37.6 million. The Company’s debt outstanding as of June 30, 2023 and December 31, 2022 is detailed in Long-Term Financing below.
16
Marine Transportation
For both the 2023 second quarter and first six months, KMT generated 55% of the Company’s revenues compared to 58% for both the 2022 second quarter and first six months. The segment’s customers include many of the major petrochemical and refining companies that operate in the United States. Products transported include intermediate materials used to produce many of the end products used widely by businesses and consumers — plastics, fiber, paints, detergents, oil additives and paper, among others, as well as residual fuel oil, ship bunkers, asphalt, gasoline, diesel fuel, heating oil, crude oil, natural gas condensate, and agricultural chemicals. Consequently, KMT is directly affected by the volumes produced by the Company’s petroleum, petrochemical, and refining customer base.
The following table summarizes the Company’s marine transportation fleet:
|
|
|
June 30, |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
Inland tank barges: |
|
|
|
|
|
|
||
|
Owned |
|
|
1,007 |
|
|
|
990 |
|
|
Leased |
|
|
38 |
|
|
|
44 |
|
|
Total |
|
|
1,045 |
|
|
|
1,034 |
|
|
Barrel capacity (in millions) |
|
|
23.3 |
|
|
|
23.0 |
|
|
|
|
|
|
|
|
|
||
|
Active inland towboats (quarter average): |
|
|
|
|
|
|
||
|
Owned |
|
|
215 |
|
|
|
211 |
|
|
Chartered |
|
|
66 |
|
|
|
59 |
|
|
Total |
|
|
281 |
|
|
|
270 |
|
|
|
|
|
|
|
|
|
||
|
Coastal tank barges: |
|
|
|
|
|
|
||
|
Owned |
|
|
28 |
|
|
|
29 |
|
|
Leased |
|
|
1 |
|
|
|
1 |
|
|
Total |
|
|
29 |
|
|
|
30 |
|
|
Barrel capacity (in millions) |
|
|
3.0 |
|
|
|
3.1 |
|
|
|
|
|
|
|
|
|
||
|
Coastal tugboats: |
|
|
|
|
|
|
||
|
Owned |
|
|
24 |
|
|
|
26 |
|
|
Chartered |
|
|
1 |
|
|
|
3 |
|
|
Total |
|
|
25 |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
||
|
Offshore dry-bulk cargo barges (owned) |
|
|
4 |
|
|
|
4 |
|
|
Offshore tugboats and docking tugboat (owned and chartered) |
|
|
5 |
|
|
|
5 |
|
The Company also owns shifting operations and fleeting facilities for dry cargo barges and tank barges on the Houston Ship Channel and in Freeport and Port Arthur, Texas, and Lake Charles, Louisiana and a shipyard for building towboats and performing routine maintenance near the Houston Ship Channel. Further, the Company owns a two-thirds interest in Osprey Line, L.L.C., which transports project cargoes and cargo containers by barge.
During the 2023 first six months, the Company brought back into service 18 inland tank barges, purchased a newly constructed inland specialty tank barge, and retired 11 inland tank barges. The net result was an increase of eight inland tank barges and approximately 0.2 million barrels of capacity during the 2023 first six months.
KMT revenues for the 2023 second quarter and first six months increased 5% and 10%, respectively, and operating income increased 108% and 125%, respectively, compared to the 2022 second quarter and first six months. The increases for the 2023 second quarter and first six months were primarily due to higher term and spot pricing and increased tank barge utilization in the inland and coastal markets. The 2023 and 2022 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, flooding on the Mississippi River, and various lock closures along the Gulf Intracoastal Waterway resulting in higher delay days. Also, the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs. For both the 2023 second quarter and first six months, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues. For both the 2022 second quarter and first six months, the inland tank barge fleet contributed 78% and the coastal fleet contributed 22% of KMT revenues.
17
Inland tank barge utilization levels averaged in the low to mid-90% range during the 2023 first quarter and the low 90% range during the 2023 second quarter compared to the mid-80% range during the 2022 first quarter and the low 90% range during the 2022 second quarter. The 2023 first six months reflected increasing activity levels as a result of higher refinery and petrochemical plant utilization while the 2022 first six months were impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges.
Coastal tank barge utilization levels averaged in the mid to high-90% range during both the 2023 first and second quarters compared to the low-90% range during both the 2022 first and second quarters. The increase in coastal tank barge utilization during 2023 was primarily due to continued improvements in market and customer demand.
During both the 2023 second quarter and first six months, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues. During both the 2022 second quarter and first six months, approximately 60% of KMT inland revenues were under term contracts and 40% were spot contract revenues. Inland time charters during the 2023 second quarter and first six months represented approximately 62% and 61%, respectively, of inland revenues under term contracts compared with 57% in both the 2022 second quarter and first six months. During the 2023 second quarter and first six months, approximately 85% and 80%, respectively, of KMT coastal revenues were under term contracts. During the 2023 second quarter and first six months, approximately 15% and 20%, respectively, of KMT coastal revenues were under spot contracts. During both the 2022 second quarter and first six months, approximately 80% of the coastal revenues were under term contracts and 20% were spot contract revenues. Coastal time charters represented approximately 90% of coastal revenues under term contracts during both the 2023 and 2022 second quarters and first six months. Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.
The following table summarizes the average range of pricing changes in term and spot contracts renewed during 2023 compared to contracts renewed during the corresponding quarter of 2022:
|
|
|
Three Months Ended |
||
|
|
|
March 31, 2023 |
|
June 30, 2023 |
|
Inland market: |
|
|
|
|
|
Term increase |
|
10% – 12% |
|
10% – 12% |
|
Spot increase |
|
23% – 26% |
|
26% – 29% |
|
Coastal market (a): |
|
|
|
|
|
Term increase |
|
10% – 12% |
|
16% – 18% |
|
Spot increase |
|
20% – 23% |
|
25% – 28% |
Effective January 1, 2023, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts of approximately 9%, excluding fuel.
KMT operating margin was 15.0% and 12.8% for the 2023 second quarter and first six months, respectively, compared to 7.6% and 6.3% for the 2022 second quarter and first six months, respectively.
Distribution and Services
KDS sells genuine replacement parts, provides service mechanics to overhaul and repair engines, transmissions, reduction gears and related oilfield services equipment, rebuilds component parts or entire diesel engines, transmissions and reduction gears, and related equipment used in oilfield services, marine, power generation, on-highway and other industrial applications. The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, manufactures and remanufactures oilfield service equipment, including pressure pumping units, and manufactures cementing and pumping equipment as well as coil tubing and well intervention equipment, electric power generation equipment, specialized electric distribution and control equipment, and high capacity energy storage/battery systems for oilfield service and railroad customers.
For both the 2023 second quarter and first six months, KDS generated 45% of the Company’s revenues, of which 80% and 78%, respectively, were generated from service and parts and 20% and 22%, respectively, from manufacturing. The results of KDS are largely influenced by the economic cycles of the oil and gas, marine, power generation, on-highway, and other related industrial markets.
18
KDS revenues for the 2023 second quarter and first six months increased 20% and 26%, respectively, and operating income increased 78% and 90%, respectively, compared with the 2022 second quarter and first six months. In the commercial and industrial market, the increases for the 2023 second quarter and first six months were primarily attributable to strong economic activity across the United States which resulted in higher business levels in the marine and on-highway businesses. Increased product sales in Thermo King also contributed favorably to the 2023 second quarter and first six months results. These increases were partially offset by continuing supply chain constraints and delays. For the 2023 second quarter and first six months, the commercial and industrial market contributed 52% and 54%, respectively, of KDS revenues.
In the oil and gas market, revenues and operating income improved compared to the 2022 second quarter and first six months due to higher oilfield activity which resulted in increased demand for new transmissions and parts in the distribution business. Although the manufacturing business was impacted by ongoing supply chain delays, the business continued to experience increased orders and deliveries of new environmentally friendly pressure pumping equipment and power generation equipment for electric fracturing. For the 2023 second quarter and first six months, the oil and gas market contributed 48% and 46%, respectively, of KDS revenues.
KDS operating margin was 8.5% and 7.6%, respectively, for the 2023 second quarter and first six months compared to 5.7% and 5.1%, respectively, for the 2022 second quarter and first six months.
Outlook
Refinery and petrochemical utilization levels remain at high levels. This is favorable for the Company’s barge utilization, which is strong in both inland and coastal markets, and for pricing, which continues to increase. Demand for the Company’s products and services continues to grow despite ongoing supply chain constraints and delays which could impact the Company’s KDS product deliveries. Overall, the Company expects both KMT and KDS to deliver improved financial results in the coming quarters. The Company continues to closely monitor the ever-changing economic landscape related to the impact of higher interest rates, and possible recessionary headwinds as it continues to move through 2023.
In the inland marine transportation market, the Company anticipates continued gradual upward movement in pricing and margins in the second half of 2023 as steady demand and a limited availability of equipment is expected to keep the market tight. As a result, the Company expects further pricing improvements in the spot market, which currently represents approximately 45% of inland revenues. Term contracts are also expected to continue to reset higher to reflect improved market conditions. These price increases are also critical in helping address the impact of persistent inflationary pressures in some areas of the Company’s business. In coastal marine, revenues and operating margins are being impacted this year by an approximate doubling of planned shipyard maintenance days with ballast water treatment installations on certain vessels. The Company expects modestly improved customer demand through the balance of the year with barge utilization in the low to mid-90% range. Rates are expected to continue slowly improving as the industry is approaching supply and demand balance across the fleet.
KDS results are largely influenced by the cycles of the oil and gas, marine, power generation, on-highway and other related industrial markets. Favorable oilfield fundamentals and steady demand in commercial and industrial are expected to continue throughout 2023 and into 2024. In the oil and gas market, despite the near-term headwinds of lower commodity prices and flat to declining rig counts, the Company expects strong demand for manufacturing as well as for OEM products, parts, and services. Within manufacturing, the Company expects demand for environmentally friendly pressure pumping and electric fracturing power generation equipment to remain strong, with new orders and increased deliveries of new equipment during the year. Supply chain issues and long lead times are expected to persist in the near-term, contributing to some volatility as deliveries of new products shift between quarters and into 2024. In commercial and industrial, steady markets are expected to help drive full year revenue growth, with increased activity in power generation, marine repair, and on-highway.
Acquisitions
On July 14, 2023, the Company purchased 23 inland tank barges with a total capacity of 265,000 barrels from an undisclosed seller for $37 million in cash. The 23 tank barges transport petrochemicals and refined products on the Mississippi River System and the Gulf Intracoastal Waterway. The average age of the 23 barges was 14 years. Financing of the equipment acquisition was through borrowings under the Company’s revolving credit facility.
On March 31, 2022, the Company paid $3.9 million in cash to purchase assets of a gearbox repair company in KDS. Financing of the purchases was through cash provided by operating activities.
19
Results of Operations
The following table sets forth the Company’s KMT and KDS revenues and the percentage of each to total revenues (dollars in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
|
|
|
2023 |
|
|
% |
|
|
2022 |
|
|
% |
|
|
2023 |
|
|
% |
|
|
2022 |
|
|
% |
|
||||||||
|
Marine transportation |
|
$ |
426,962 |
|
|
|
55 |
% |
|
$ |
405,655 |
|
|
|
58 |
% |
|
$ |
839,457 |
|
|
|
55 |
% |
|
$ |
761,191 |
|
|
|
58 |
% |
|
Distribution and services |
|
|
350,286 |
|
|
|
45 |
|
|
|
292,309 |
|
|
|
42 |
|
|
|
688,235 |
|
|
|
45 |
|
|
|
547,555 |
|
|
|
42 |
|
|
|
|
$ |
777,248 |
|
|
|
100 |
% |
|
$ |
697,964 |
|
|
|
100 |
% |
|
$ |
1,527,692 |
|
|
|
100 |
% |
|
$ |
1,308,746 |
|
|
|
100 |
% |
Marine Transportation
The following table sets forth KMT revenues, costs and expenses, operating income, and operating margin (dollars in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
||||||
|
Marine transportation revenues |
|
$ |
426,962 |
|
|
$ |
405,655 |
|
|
|
5 |
% |
|
$ |
839,457 |
|
|
$ |
761,191 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Costs of sales and operating expenses |
|
|
275,618 |
|
|
|
294,343 |
|
|
|
(6 |
) |
|
|
557,641 |
|
|
|
548,702 |
|
|
|
2 |
|
|
Selling, general and administrative |
|
|
33,605 |
|
|
|
28,294 |
|
|
|
19 |
|
|
|
68,592 |
|
|
|
60,630 |
|
|
|
13 |
|
|
Taxes, other than on income |
|
|
7,962 |
|
|
|
7,990 |
|
|
|
— |
|
|
|
15,269 |
|
|
|
15,810 |
|
|
|
(3 |
) |
|
Depreciation and amortization |
|
|
45,526 |
|
|
|
44,211 |
|
|
|
3 |
|
|
|
90,668 |
|
|
|
88,297 |
|
|
|
3 |
|
|
|
|
|
362,711 |
|
|
|
374,838 |
|
|
|
(3 |
) |
|
|
732,170 |
|
|
|
713,439 |
|
|
|
3 |
|
|
Operating income |
|
$ |
64,251 |
|
|
$ |
30,817 |
|
|
|
108 |
% |
|
$ |
107,287 |
|
|
$ |
47,752 |
|
|
|
125 |
% |
|
Operating margins |
|
|
15.0 |
% |
|
|
7.6 |
% |
|
|
|
|
|
12.8 |
% |
|
|
6.3 |
% |
|
|
|
||
Marine Transportation Revenues
The following table shows the marine transportation markets serviced by the Company, KMT revenue distribution, products moved and the drivers of the demand for the products the Company transports:
|
Markets
|
|
2023 Second Quarter
|
|
2023 Six Months
|
|
Products Moved |
|
Drivers |
|
Petrochemicals |
|
51% |
|
51% |
|
Benzene, Styrene, Methanol, Acrylonitrile, Xylene, Naphtha, Caustic Soda, Butadiene, Propylene |
|
Consumer non-durables – 70%, Consumer durables – 30% |
|
Black Oil |
|
26% |
|
26% |
|
Residual Fuel Oil, Coker Feedstock, Vacuum Gas Oil, Asphalt, Carbon Black Feedstock, Crude Oil, Natural Gas Condensate, Ship Bunkers |
|
Fuel for Power Plants and Ships, Feedstock for Refineries, Road Construction |
|
Refined Petroleum Products |
|
20% |
|
20% |
|
Gasoline, No. 2 Oil, Jet Fuel, Heating Oil, Diesel Fuel, Ethanol |
|
Vehicle Usage, Air Travel, Weather Conditions, Refinery Utilization |
|
Agricultural Chemicals |
|
3% |
|
3% |
|
Anhydrous Ammonia, Nitrogen – Based Liquid Fertilizer, Industrial Ammonia |
|
Corn, Cotton and Wheat Production, Chemical Feedstock Usage |
KMT revenues for the 2023 second quarter and first six months increased 5% and 10%, respectively, and operating income increased 108% and 125%, respectively, compared to the 2022 second quarter and first six months. The increases for the 2023 second quarter and first six months were primarily due to higher term and spot pricing and increased tank barge utilization in the inland and coastal markets. The 2023 and 2022 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, flooding on the Mississippi River, and various lock closures along the Gulf Intracoastal Waterway resulting in higher delay days. Also, the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs. For both the 2023 second quarter and first six months,
20
the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues. For both the 2022 second quarter and first six months, the inland tank barge fleet contributed 78% and the coastal fleet contributed 22% of KMT revenues.
Inland tank barge utilization levels averaged in the low to mid-90% range during the 2023 first quarter and the low 90% range during the 2023 second quarter compared to the mid-80% range during the 2022 first quarter and the low 90% range during the 2022 second quarter. The 2023 first six months reflected increasing activity levels as a result of higher refinery and petrochemical plant utilization while the 2022 first six months were impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges.
Coastal tank barge utilization levels averaged in the mid to high-90% range during both the 2023 first and second quarters compared to the low-90% range during both the 2022 first and second quarters. The increase in coastal tank barge utilization during 2023 was primarily due to continued improvements in market and customer demand.
The petrochemical market, which is the Company’s largest market, contributed 51% of KMT revenues for both the 2023 second quarter and first six months, reflecting increased rates, volumes and utilization from Gulf Coast petrochemical plants as a result of improved economic conditions as compared to the 2022 first six months.
The black oil market, which contributed 26% of KMT revenues for both the 2023 second quarter and first six months, reflected improved demand as refinery utilization and production levels of refined petroleum products and fuel oils increased. During the 2023 first six months, the Company transported crude oil and natural gas condensate produced from the Permian Basin and the Eagle Ford shale formation in Texas, both along the Gulf Intracoastal Waterway with inland vessels and in the Gulf of Mexico with coastal equipment. Additionally, the Company transported volumes of Utica natural gas condensate downriver from the Mid-Atlantic to the Gulf Coast and Canadian and Bakken crude downriver from the Midwest to the Gulf Coast.
The refined petroleum products market, which contributed 20% of KMT revenues for both the 2023 second quarter and first six months, reflected increased volumes in the inland market with improved refinery utilization and product levels.
The agricultural chemical market, which contributed 3% of KMT revenues for both the 2023 second quarter and first six months, reflected improved demand for transportation of both domestically produced and imported products.
For the 2023 second quarter, inland operations incurred 2,317 delay days, 16% fewer than the 2,762 delay days that occurred during the 2022 second quarter. For the 2023 first six months, inland operations incurred 6,442 delay days, 9% more than the 5,899 delays days that occurred during the 2022 first six months. Delay days measure the lost time incurred by a tow (towboat and one or more tank barges) during transit when the tow is stopped due to weather, lock conditions, or other navigational factors. Delay days reflected poor operating conditions due to heavy wind and fog along the Gulf Coast and lock delays on the Mississippi and Illinois rivers during the 2023 and 2022 first quarters.
During both the 2023 second quarter and first six months, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues. During both the 2022 second quarter and first six months, approximately 60% of KMT inland revenues were under term contracts and 40% were spot contract revenues. Inland time charters during the 2023 second quarter and first six months represented approximately 62% and 61%, respectively, of inland revenues under term contracts compared with 57% in both the 2022 second quarter and first six months. During the 2023 second quarter and first six months, approximately 85% and 80%, respectively, of KMT coastal revenues were under term contracts. During the 2023 second quarter and first six months, approximately 15% and 20%, respectively, of KMT coastal revenues were under spot contracts. During both the 2022 second quarter and first six months, approximately 80% of the coastal revenues were under term contracts and 20% were spot contract revenues. Coastal time charters represented approximately 90% of coastal revenues under term contracts during both the 2023 and 2022 second quarters and first six months. Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.
The following table summarizes the average range of pricing changes in term and spot contracts renewed during 2023 compared to contracts renewed during the corresponding quarter of 2022:
|
|
|
Three Months Ended |
||
|
|
|
March 31, 2023 |
|
June 30, 2023 |
|
Inland market: |
|
|
|
|
|
Term increase |
|
10% – 12% |
|
10% – 12% |
|
Spot increase |
|
23% – 26% |
|
26% – 29% |
|
Coastal market (a): |
|
|
|
|
|
Term increase |
|
10% – 12% |
|
16% – 18% |
|
Spot increase |
|
20% – 23% |
|
25% – 28% |
21
Effective January 1, 2023, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts of approximately 9%, excluding fuel.
Marine Transportation Costs and Expenses
Costs and expenses for the 2023 second quarter and first six months decreased 3% and increased 3%, respectively, compared to the 2022 second quarter and first six months. Costs of sales and operating expenses for the 2023 second quarter and first six months decreased 6% and increased 2%, respectively, compared with the 2022 second quarter and first six months. The decrease during the 2023 second quarter primarily reflected lower fuel costs, while the increase during the 2023 first six months primarily reflected improved business activity levels and inflationary cost pressures. The 2022 first quarter was negatively impacted by incremental costs associated with the COVID-19 Omicron variant.
The inland marine transportation fleet operated an average of 281 towboats during the 2023 second quarter, of which an average of 66 were chartered, compared to 270 during the 2022 second quarter, of which an average of 59 were chartered. The increase was primarily due to increasing business activity levels during the 2023 second quarter. The Company charters in or releases chartered towboats in an effort to balance horsepower needs with current requirements, taking into account variability in demand or anticipated demand, addition or removal of tank barges from the fleet, chartered towboat availability, and weather or water conditions. The Company has historically used chartered towboats for approximately one-fourth of its horsepower requirements.
During the 2023 second quarter, inland operations consumed 12.2 million gallons of diesel fuel compared to 12.6 million gallons consumed during the 2022 second quarter. The average price per gallon of diesel fuel consumed during the 2023 second quarter was $2.87 per gallon compared with $3.98 per gallon for the 2022 second quarter. During the 2023 first six months, inland operations consumed 24.4 million gallons of diesel fuel compared to 24.2 million gallons consumed during the 2022 first six months. The average price per gallon of diesel fuel consumed during the 2023 first six months was $3.09 per gallon compared with $3.27 per gallon for the 2022 first six months. Fuel escalation and de-escalation clauses are typically included in term contracts and are designed to rebate fuel costs when prices decline and recover additional fuel costs when fuel prices rise; however, there is generally a 30 to 120 day delay before contracts are adjusted. Spot contracts do not have escalators for fuel.
Selling, general and administrative expenses for the 2023 second quarter and first six months increased 19% and 13%, respectively, compared to the 2022 second quarter and first six months due to higher business activity levels and inflationary cost pressures. The increase for the 2023 second quarter and first six months was also due to salary and wage increases which went into effect July 1, 2022 and increased incentive compensation accruals.
Marine Transportation Operating Income and Operating Margin
KMT operating income for the 2023 second quarter and first six months increased 108% and 125%, respectively, compared with the 2022 second quarter and first six months. The 2023 second quarter operating margin was 15.0% compared with 7.6% for the 2022 second quarter. The 2023 first six months operating margin was 12.8% compared with 6.3% for the 2022 first six months. The increases in operating income and operating margin were primarily due to higher term and spot contract pricing and increased barge utilization in the inland and coastal markets, each as a result of improving business activity levels. The 2022 first quarter was negatively impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs.
22
Distribution and Services
The following table sets forth KDS revenues, costs and expenses, operating income, and operating margin (dollars in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
||||||
|
Distribution and services revenues |
|
$ |
350,286 |
|
|
$ |
292,309 |
|
|
|
20 |
% |
|
$ |
688,235 |
|
|
$ |
547,555 |
|
|
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Costs of sales and operating expenses |
|
|
268,657 |
|
|
|
229,196 |
|
|
|
17 |
|
|
|
528,521 |
|
|
|
425,715 |
|
|
|
24 |
|
|
Selling, general and administrative |
|
|
45,686 |
|
|
|
40,653 |
|
|
|
12 |
|
|
|
94,883 |
|
|
|
82,575 |
|
|
|
15 |
|
|
Taxes, other than on income |
|
|
1,707 |
|
|
|
1,590 |
|
|
|
7 |
|
|
|
3,558 |
|
|
|
3,318 |
|
|
|
7 |
|
|
Depreciation and amortization |
|
|
4,394 |
|
|
|
4,133 |
|
|
|
6 |
|
|
|
8,639 |
|
|
|
8,239 |
|
|
|
5 |
|
|
|
|
|
320,444 |
|
|
|
275,572 |
|
|
|
16 |
|
|
|
635,601 |
|
|
|
519,847 |
|
|
|
22 |
|
|
Operating income |
|
$ |
29,842 |
|
|
$ |
16,737 |
|
|
|
78 |
% |
|
$ |
52,634 |
|
|
$ |
27,708 |
|
|
|
90 |
% |
|
Operating margins |
|
|
8.5 |
% |
|
|
5.7 |
% |
|
|
|
|
|
7.6 |
% |
|
|
5.1 |
% |
|
|
|
||
Distribution and Services Revenues
The following table shows the markets serviced by KDS, the revenue distribution, and the customers for each market:
|
Markets Serviced |
|
2023 Second Quarter
|
|
2023 Six Months
|
|
Customers |
|
Commercial and Industrial |
|
52% |
|
54% |
|
Inland River Carriers — Dry and Liquid, Offshore Towing — Dry and Liquid, Offshore Oilfield Services — Drilling Rigs & Supply Boats, Harbor Towing, Dredging, Great Lakes Ore Carriers, Pleasure Crafts, On and Off-Highway Transportation, Power Generation, Standby Power Generation, Pumping Stations, Mining |
|
Oil and Gas |
|
48% |
|
46% |
|
Oilfield Services, Oil and Gas Operators and Producers |
KDS revenues for the 2023 second quarter and first six months increased 20% and 26%, respectively, compared to the 2022 second quarter and first six months. In the commercial and industrial market, the increase for the 2023 second quarter and first six months was primarily attributable to strong economic activity across the United States which resulted in higher business levels in the marine and on-highway businesses. Increased product sales in Thermo King also contributed favorably to the 2023 second quarter and first six months results. These increases were partially offset by continuing supply chain constraints and delays. For the 2023 second quarter and first six months, the commercial and industrial market contributed 52% and 54%, respectively, of KDS revenues.
In the oil and gas market, revenues improved compared to the 2022 second quarter and first six months due to higher oilfield activity which resulted in increased demand for new transmissions and parts in the distribution business. Although the manufacturing business was impacted by ongoing supply chain delays, the business continued to experience increased orders and deliveries of new environmentally friendly pressure pumping equipment and power generation equipment for electric fracturing. For the 2023 second quarter and first six months, the oil and gas market contributed 48% and 46%, respectively, of KDS revenues.
Distribution and Services Costs and Expenses
Costs and expenses for the 2023 second quarter and first six months increased 16% and 22%, respectively, compared with the 2022 second quarter and first six months. Costs of sales and operating expenses for the 2023 second quarter and first six months increased 17% and 24%, respectively, compared with the 2022 second quarter and first six months, reflecting higher demand in the marine and on-highway businesses in commercial and industrial markets as well as increased demand in the oil and gas market as a result of higher oilfield activity levels.
Selling, general and administrative expenses for the 2023 second quarter and first six months increased 12% and 15%, respectively, compared to the 2022 second quarter and first six months, primarily due to continued inflationary cost pressures, higher business activity and annual compensation increases which went into effect July 1, 2022.
23
Distribution and Services Operating Income and Operating Margin
KDS operating income for the 2023 second quarter and first six months increased 78% and 90%, respectively, compared with the 2022 second quarter and first six months. The 2023 second quarter operating margin was 8.5% compared to 5.7% for the 2022 second quarter. The 2023 first six months operating margin was 7.6% compared to 5.1% for the 2022 first six months. The results reflect increased business levels in both the commercial and industrial and oil and gas markets.
General Corporate Expenses
General corporate expenses for the 2023 second quarter and first six months increased compared to the 2022 second quarter and first six months primarily due to higher legal and insurance costs. The 2023 first quarter also included costs related to strategic review and shareholder engagement.
Gain on Disposition of Assets
The Company reported a net gain on disposition of assets of $0.5 million for the 2023 second quarter and $2.7 million for the 2022 second quarter. The Company reported a net gain on disposition of assets of $2.7 million for the 2023 first six months and $7.6 million for the 2022 first six months. The net gains were primarily from sales of marine transportation equipment.
Other Income and Expenses
The following table sets forth other income, noncontrolling interests, and interest expense (dollars in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
||||||
|
Other income |
|
$ |
1,264 |
|
|
$ |
3,740 |
|
|
|
(66 |
)% |
|
$ |
7,707 |
|
|
$ |
8,048 |
|
|
|
(4 |
)% |
|
Noncontrolling interests |
|
$ |
49 |
|
|
$ |
(149 |
) |
|
|
(133 |
)% |
|
$ |
126 |
|
|
$ |
(301 |
) |
|
|
(142 |
)% |
|
Interest expense |
|
$ |
(12,286 |
) |
|
$ |
(10,640 |
) |
|
|
15 |
% |
|
$ |
(25,507 |
) |
|
$ |
(20,843 |
) |
|
|
22 |
% |
Other Income
Other income for the 2023 and 2022 second quarters include income of $1.2 million and $3.5 million, respectively, and the 2023 and 2022 first six months includes income of $2.4 million and $6.9 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans. The 2023 first quarter also includes interest income associated with the IRS refund.
Interest Expense
The following table sets forth average debt and average interest rate (dollars in thousands):
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Average debt |
|
$ |
1,024,071 |
|
|
$ |
1,149,355 |
|
|
$ |
1,112,956 |
|
|
$ |
1,163,759 |
|
|
Average interest rate |
|
|
4.7 |
% |
|
|
3.7 |
% |
|
|
4.6 |
% |
|
|
3.6 |
% |
Interest expense for the 2023 second quarter and first six months increased 15% and 22%, respectively, compared with the 2022 second quarter and first six months, primarily due to a higher average interest rate. There was no capitalized interest excluded from interest expense during the 2023 or 2022 first six months.
24
Financial Condition, Capital Resources and Liquidity
Balance Sheets
The following table sets forth the significant components of the balance sheets (dollars in thousands):
|
|
|
June 30,
|
|
|
December 31,
|
|
|
% Change |
|
|||
|
Assets: |
|
|
|
|
|
|
|
|
|
|||
|
Current assets |
|
$ |
1,168,656 |
|
|
$ |
1,211,759 |
|
|
|
(4 |
)% |
|
Property and equipment, net |
|
|
3,697,939 |
|
|
|
3,633,462 |
|
|
|
2 |
|
|
Operating lease right-of-use assets |
|
|
152,504 |
|
|
|
154,507 |
|
|
|
(1 |
) |
|
Goodwill |
|
|
438,748 |
|
|
|
438,748 |
|
|
|
— |
|
|
Other intangibles, net |
|
|
47,188 |
|
|
|
51,463 |
|
|
|
(8 |
) |
|
Other assets |
|
|
69,544 |
|
|
|
64,985 |
|
|
|
7 |
|
|
|
|
$ |
5,574,579 |
|
|
$ |
5,554,924 |
|
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Liabilities and stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|||
|
Current liabilities |
|
$ |
656,297 |
|
|
$ |
642,197 |
|
|
|
2 |
% |
|
Long-term debt, net – less current portion |
|
|
990,954 |
|
|
|
1,076,326 |
|
|
|
(8 |
) |
|
Deferred income taxes |
|
|
656,528 |
|
|
|
625,884 |
|
|
|
5 |
|
|
Operating lease liabilities – less current portion |
|
|
142,470 |
|
|
|
142,140 |
|
|
|
— |
|
|
Other long-term liabilities |
|
|
15,521 |
|
|
|
23,209 |
|
|
|
(33 |
) |
|
Total equity |
|
|
3,112,809 |
|
|
|
3,045,168 |
|
|
|
2 |
|
|
|
|
$ |
5,574,579 |
|
|
$ |
5,554,924 |
|
|
|
— |
% |
Current assets as of June 30, 2023 decreased 4% compared with December 31, 2022. Trade accounts receivable increased 8%, primarily due to increased business activity levels in both KMT and KDS. Other receivables decreased 65% as the Company received its tax refund of $70.4 million plus accrued interest in April 2023. Inventories increased by 9% due to higher activity and the impact of ongoing supply chain delays in KDS resulting in buildup for projects that will be delivered later in 2023 and into 2024. Prepaid expenses and other current assets decreased 5% primarily due to amortization of insurance premiums and the sale of assets held for sale.
Property and equipment, net of accumulated depreciation, at June 30, 2023 increased 2% compared with December 31, 2022. The increase reflected $176.3 million of capital additions (including an increase in accrued capital expenditures of $5.1 million), partially offset by $99.1 million of depreciation expense and $12.8 million of property disposals more fully described under Cash Flows and Capital Expenditures below.
Other intangibles, net, as of June 30, 2023 decreased 8% compared with December 31, 2022, primarily due to amortization during the 2023 first six months.
Other assets as of June 30, 2023 increased 7% compared with December 31, 2022, primarily due to additional deferred major maintenance drydock expenditures incurred during the 2023 first six months partially offset by amortization of drydock expenditures.
Current liabilities as of June 30, 2023 increased 2% compared with December 31, 2022. Deferred revenue increased 10% primarily due to deposits on equipment expected to be shipped later in 2023 in KDS.
Long-term debt, net – less current portion, as of June 30, 2023 decreased 8% compared with December 31, 2022, primarily reflecting the maturity of the 3.29% senior notes due February 27, 2023, offset by borrowings under the 3.46% and 3.51% senior notes due January 19, 2033 and the 2027 Revolving Credit Facility.
Deferred income taxes as of June 30, 2023 increased 5% compared with December 31, 2022, primarily reflecting the deferred tax provision of $30.2 million.
Other long-term liabilities as of June 30, 2023 decreased 33% compared with December 31, 2022, primarily due to a decrease in pension liabilities as a result of pension contributions of $7.7 million during the 2023 first six months and amortization of intangible liabilities.
Total equity as of June 30, 2023 increased 2% compared with December 31, 2022. The increase was primarily due to the net earnings attributable to Kirby of $98.1 million, amortization of share-based compensation of $8.9 million, and stock option exercises of $0.1 million, partially offset by treasury stock purchases of $37.6 million and tax withholdings of $3.6 million on RSU vestings.
25
Long-Term Financing
The following table summarizes the Company’s outstanding debt (in thousands):
|
|
|
June 30,
|
|
|
December 31,
|
|
||
|
Long-term debt, including current portion: |
|
|
|
|
|
|
||
|
Revolving Credit Facility due July 29, 2027 (a) |
|
$ |
27,000 |
|
|
$ |
— |
|
|
Term Loan due July 29, 2027 (a) |
|
|
170,000 |
|
|
|
170,000 |
|
|
3.29% senior notes due February 27, 2023 |
|
|
— |
|
|
|
350,000 |
|
|
4.2% senior notes due March 1, 2028 |
|
|
500,000 |
|
|
|
500,000 |
|
|
3.46% senior notes due January 19, 2033 |
|
|
60,000 |
|
|
|
60,000 |
|
|
3.51% senior notes due January 19, 2033 |
|
|
240,000 |
|
|
|
— |
|
|
Credit line due June 30, 2024 |
|
|
— |
|
|
|
— |
|
|
Bank notes payable |
|
|
7,447 |
|
|
|
3,292 |
|
|
|
|
|
1,004,447 |
|
|
|
1,083,292 |
|
|
Unamortized debt discounts and issuance costs (b) |
|
|
(6,046 |
) |
|
|
(3,674 |
) |
|
|
|
$ |
998,401 |
|
|
$ |
1,079,618 |
|
At the beginning of 2022, the Company had in place its 2024 Credit Agreement with a group of commercial banks, with JPMorgan Chase Bank, N.A. as the administrative agent bank, that allowed for an $850 million 2024 Revolving Credit Facility and a 2024 Term Loan with a maturity date of March 27, 2024. The 2024 Term Loan was prepayable, in whole or in part, without penalty.
On July 29, 2022, the Company entered into the 2027 Credit Agreement with a group of commercial banks, with JPMorgan Chase Bank, N.A. as the administrative agent bank that allows for a $500 million 2027 Revolving Credit Facility and a $250 million 2027 Term Loan with a maturity date of July 29, 2027. The 2027 Credit Agreement replaced the 2024 Credit Agreement. In conjunction with entering into the 2027 Credit Agreement, on July 29, 2022, the Company borrowed $35 million under the 2027 Revolving Credit Facility and $250 million under the 2027 Term Loan to repay borrowings under the 2024 Term Loan. In the fourth quarter of 2022, the Company repaid $80.0 million under the 2027 Term Loan prior to scheduled maturities. As a result, no repayments are required until June 30, 2025. Outstanding letters of credit under the 2027 Revolving Credit Facility were $0.1 million and available borrowing capacity was $472.9 million as of June 30, 2023.
The 2027 Term Loan is repayable in quarterly installments, with no repayments until June 30, 2025, in increasing percentages of the original principal amount of the loan, with the remaining unpaid balance of approximately $43.8 million payable upon maturity, assuming no prepayment. The 2027 Term Loan is prepayable, in whole or in part, without penalty. The 2027 Credit Agreement provides for a variable interest rate based on the SOFR or a base rate calculated with reference to the prime rate quoted by The Wall Street Journal, the Federal Reserve Bank of New York Rate plus 0.5%, or the Alternate Base Rate. The interest rate varies with the Company’s credit rating and is currently 137.5 basis points over SOFR or 37.5 basis points over the Alternate Base Rate. The 2027 Credit Agreement contains certain financial covenants including an interest coverage ratio and debt-to-capitalization ratio. In addition to financial covenants, the 2027 Credit Agreement contains covenants that, subject to exceptions, restrict debt incurrence, mergers and acquisitions, sales of assets, dividends and investments, liquidations and dissolutions, capital leases, transactions with affiliates, and changes in lines of business. The 2027 Credit Agreement specifies certain events of default, upon the occurrence of which the maturity of the outstanding loans may be accelerated, including the failure to pay principal or interest, violation of covenants and default on other indebtedness, among other events. Borrowings under the 2027 Credit Agreement may be used for general corporate purposes including acquisitions. The 2027 Revolving Credit Facility includes a $25 million commitment which may be used for standby letters of credit.
On February 3, 2022, the Company entered into a note purchase agreement for the 2033 Notes with a group of institutional investors, consisting of $60 million Series A Notes and $240 million Series B Notes, each due January 19, 2033. The Series A Notes were issued on October 20, 2022, and the Series B Notes were issued on January 19, 2023. No principal payments will be required until maturity. Beginning in 2023, interest payments of $5.3 million will be due semi-annually on January 19 and July 19 of each year, with the exception of the first payment on January 19, 2023, which was $0.5 million. The 2033 Notes are unsecured and rank equally in right of payment with the Company's other unsecured senior indebtedness. The 2033 Notes contain certain covenants on the part of the Company, including an interest coverage covenant, a debt-to-capitalization covenant, and covenants relating to liens, asset sales and mergers, among others. The 2033 Notes also specify certain events of default, upon the occurrence of which the maturity of the notes may be accelerated, including failure to pay principal and interest, violation of covenants or default on other indebtedness, among others. The 2023 Notes were repaid using a combination of the proceeds from the issuance of the 2033 Notes and availability under the 2027 Revolving Credit Facility.
26
The Company has a $10 million Credit Line with Bank of America for short-term liquidity needs and letters of credit, with a maturity date of June 30, 2024. Outstanding letters of credit under the $10 million credit line were $3.6 million and available borrowing capacity was $6.4 million as of June 30, 2023.
As of June 30, 2023, the Company was in compliance with all covenants under its debt instruments. For additional information about the Company’s debt instruments, see Note 5, Long-Term Debt, of the Notes to Condensed Financial Statements (Unaudited) as well as Note 5, Long-Term Debt, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Cash Flow and Capital Expenditures
The Company generated positive operating cash flows during the 2023 first six months with net cash provided by operating activities of $227.9 million compared with $95.6 million for the 2022 first six months, a 138% increase. Higher revenues and operating income in KMT and KDS during the 2023 first six months and the receipt of the IRS refund of $70.4 million plus accrued interest in April 2023 more than offset an increase in trade accounts receivable, primarily due to higher revenues and timing of collections, and increased inventory levels in KDS due to higher activity and managing supply chain challenges during the 2023 first six months. Increases in KMT revenues and operating income were driven by higher term and spot contract pricing and increased barge utilization in the inland and coastal markets during the 2023 first six months. During the 2023 and 2022 second quarters and first six months, the Company generated cash of $20.5 million and $23.3 million, respectively, from proceeds from the disposition of assets, and $0.1 million and $3.9 million, respectively, from proceeds from the exercise of stock options.
For the 2023 first six months, cash generated was used for capital expenditures of $171.2 million, including $23.2 million for specialized inland equipment construction and $148.0 million primarily for upgrading existing marine equipment and KMT and KDS facilities.
Treasury Stock Purchases
During the 2023 first six months, the Company purchased 521,625 shares of its common stock for $37.6 million, at an average price of $72.08 per share. Subsequent to June 30, 2023 and through August 4, 2023, the Company purchased an additional 60,326 shares of its common stock for $4.6 million, at an average price of $76.03 per share. As of August 4, 2023, the Company had approximately 5.4 million shares available under its existing repurchase authorization. Historically, treasury stock purchases have been financed through operating cash flows and borrowings under the Company’s revolving credit facility. The Company is authorized to purchase its common stock on the New York Stock Exchange and in privately negotiated transactions. When purchasing its common stock, the Company is subject to price, trading volume, and other market considerations. Shares purchased may be used for reissuance upon the exercise of stock options or the granting of other forms of incentive compensation, in future acquisitions for stock, or for other appropriate corporate purposes.
Liquidity
Funds generated from operations are available for acquisitions, capital expenditure projects, common stock repurchases, repayments of borrowings, and for other corporate and operating requirements. In addition to net cash flows provided by operating activities, as of August 4, 2023 the Company also had cash and cash equivalents of $28.4 million, availability of $405.9 million under its 2027 Revolving Credit Facility, and $2.6 million available under its credit line.
Neither the Company, nor any of its subsidiaries, is obligated on any debt instrument, swap agreement, or any other financial instrument or commercial contract which has a rating trigger, except for the pricing grid on its 2027 Credit Agreement.
The Company expects to continue to fund expenditures for acquisitions, capital construction projects, common stock repurchases, repayment of borrowings, and for other operating requirements from a combination of available cash and cash equivalents, funds generated from operating activities, and available financing arrangements.
The 2027 Revolving Credit Facility's commitment is in the amount of $500 million and matures July 29, 2027. The 4.2% senior unsecured notes do not mature until March 1, 2028 and require no prepayments. The 2033 Notes do not mature until January 19, 2033 and require no prepayments. The 2027 Term Loan in the amount of $250 million is subject to quarterly installments, beginning June 30, 2025, in increasing percentages of the original principal amount of the loan, with the remaining unpaid balance of approximately $43.8 million payable on July 29, 2027, assuming no prepayments. The 2027 Term Loan is prepayable, in whole or in part, without penalty.
There are numerous factors that may negatively impact the Company’s cash flows in 2023. For a list of significant risks and uncertainties that could impact cash flows, see Note 13, Contingencies and Commitments, of the Notes to Condensed Financial Statements (Unaudited), and Item 1A — Risk Factors and Note 14, Contingencies and Commitments, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Amounts available under the Company’s existing financial arrangements are subject to the Company continuing to meet the covenants of the credit facilities as described in Note 5, Long-Term Debt, of the Notes
27
to Condensed Financial Statements (Unaudited) as well as Note 5, Long-Term Debt, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The Company has issued guaranties or obtained standby letters of credit and performance bonds supporting performance by the Company and its subsidiaries of contractual or contingent legal obligations of the Company and its subsidiaries incurred in the ordinary course of business. The aggregate notional value of these instruments is $24.0 million at June 30, 2023, including $9.4 million in letters of credit and $14.6 million in performance bonds. All of these instruments have an expiration date within two years. The Company does not believe demand for payment under these instruments is likely and expects no material cash outlays to occur in connection with these instruments.
KMT term contracts typically contain fuel escalation clauses, or the customer pays for the fuel. However, there is generally a 30 to 120 day delay before contracts are adjusted depending on the specific terms of the contract. In general, the fuel escalation clauses are effective over the long-term in allowing the Company to recover changes in fuel costs due to fuel price changes. However, the short-term effectiveness of the fuel escalation clauses can be affected by a number of factors including, but not limited to, specific terms of the fuel escalation formulas, fuel price volatility, navigating conditions, tow sizes, trip routing, and the location of loading and discharge ports that may result in the Company over or under recovering its fuel costs. The Company’s spot contract rates generally reflect current fuel prices at the time the contract is signed but do not have escalators for fuel.
The Company has certain mechanisms designed to help mitigate the impacts of rising costs. For example, KMT has long-term contracts which generally contain cost escalation clauses whereby certain costs, including fuel as noted above, can be largely passed through to its customers. Spot contract rates include the cost of fuel and are subject to market volatility. In KDS, the cost of major components for large manufacturing orders is secured with suppliers at the time a customer order is finalized, which limits exposure to inflation. The repair portion of KDS is based on prevailing current market rates.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to risk from changes in interest rates on certain of its outstanding debt. The outstanding loan balances under the Company’s current bank credit facilities bear interest at variable rates based on prevailing short-term interest rates in the United States, while the previous bank credit facilities also included Europe. A 1% increase in variable interest rates would impact the 2023 interest expense by $1.7 million based on balances outstanding at December 31, 2022, and would change the fair value of the Company’s debt by approximately 1.7%.
Item 4. Controls and Procedures
Disclosure Controls and Procedures . The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)), as of June 30, 2023, as required by Rule 13a-15(b) under the Exchange Act. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of June 30, 2023, the disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting . There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
See Note 13, Contingencies and Commitments, of the Notes to Condensed Financial Statements (Unaudited).
Item 1A. Risk Factors
The Company continues to be subject to the risk factors previously disclosed in its “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
|
Period |
|
Total Number of Shares Purchased |
|
|
Average Price Paid Per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans |
|
|
Maximum Number of Shares that May Yet be Purchased Under the Plans |
|
||||
|
April 1 — April 30, 2023 |
|
|
2,000 |
|
|
$ |
68.74 |
|
|
|
— |
|
|
|
— |
|
|
May 1 — May 31, 2023 |
|
|
246,229 |
|
|
$ |
71.13 |
|
|
|
— |
|
|
|
— |
|
|
June 1 — June 30, 2023 |
|
|
226,546 |
|
|
$ |
74.00 |
|
|
|
— |
|
|
|
— |
|
|
Total |
|
|
474,775 |
|
|
$ |
72.49 |
|
|
|
— |
|
|
|
— |
|
Purchases of the Company's common stock during the 2023 second quarter were made in the open market pursuant to a discretionary authorization by the Board of Directors.
Item 5. Other Information
During the three months ended June 30, 2023, no director or officer of the Company
Item 6. Exhibits
EXHIBIT INDEX
|
Exhibit Number |
|
Description of Exhibits |
|
3.1 |
– |
|
|
3.2 |
– |
|
|
4.1 |
– |
See Exhibits 3.1 and 3.2 hereof for provisions of our Restated Articles of Incorporation of the Company with all amendments to date and the Bylaws of the Company with all amendments to date (incorporated, respectively, by reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2014 and Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on October 28, 2022). |
|
31.1* |
– |
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) |
|
31.2* |
– |
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) |
|
32* |
– |
|
|
101.INS* |
– |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
101.SCH* |
– |
Inline XBRL Taxonomy Extension Schema Document |
|
101.CAL* |
– |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
101.DEF* |
– |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
101.LAB* |
– |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
101.PRE* |
– |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
104* |
– |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
† Management contract, compensatory plan or arrangement.
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
KIRBY CORPORATION |
|
|
|
(Registrant) |
|
|
|
|
|
|
|
By: |
/s/ Raj Kumar |
|
|
|
Raj Kumar |
|
|
|
Executive Vice President and |
|
|
|
Chief Financial Officer |
|
|
|
|
|
Dated: August 7, 2023 |
|
|
30