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Kirby Corporation (KEX)
Q1 2013 Earnings Call
April 25, 2013 11:00 am ET
G. Stephen Holcomb – VP-Investor Relations & Assistant Secretary
Joseph H. Pyne – Chairman and Chief Executive Officer
Gregory R. Binion – President and Chief Operating Officer
David W. Grzebinski – Executive Vice President and Chief Financial Officer
Jonathan Chappell – Evercore Partners Inc.
Michael Webber – Wells Fargo
Gregory Lewis – Credit Suisse Group
Ken Hoexter – Bank of America
Jack Atkins – Stephens Inc.
John L. Barnes – RBC Capital Markets LLC
Chaz Jones – Wunderlich Securities
Kevin Sterling – BB&T Capital Markets
Matthew Young – Morningstar Equity Research
Previous Statements by KEX
» Kirby Corporation's CEO Discusses Q4 2012 Results - Earnings Call Transcript
» Kirby's CEO Hosts Agreement to Acquire Penn Maritime Conference (Transcript)
» Kirby's CEO Presents at Goldman Sachs 2012 Industrials Conference (Transcript)
» Kirby Corporation's CEO Discusses Q3 2012 Results - Earnings Call Transcript
I’ll now turn the call over to Steve Holcomb. Mr. Holcomb, you may begin.
G. Stephen Holcomb
Good morning. Thank you for joining us. With me today are Joe Pyne, Kirby’s Chairman, President and Chief Executive Officer; David Grzebinski, Kirby’s Executive Vice President and Chief Financial Officer; and Greg Binion, Kirby’s President Marine Transportation Group.
During this conference call, we may refer to certain non-GAAP or adjusted financial measures. A reconciliation of the non-GAAP financial measures to most directly comparable GAAP financial measures is available on our website at kirbycorp.com in the Investor Relations section under non-GAAP financial data.
Statements contained in this conference call with respect to the future are forward-looking statements. These statements reflect management’s reasonable judgment with respect to future events. Forward-looking statements involve risk and uncertainties. Our actual results could differ materially from those anticipated as a result of various factors. A list of these risk factors can be found in Kirby’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission.
I will now turn the call over to Joe.
Joseph H. Pyne
Thank you, Steve. Late yesterday afternoon, we announced first quarter earnings of a $1 per share excluding a $0.05 per share credit, which decreased the fair value of the earn out liability associated with our United acquisition. Our results exceeded our guidance range for the first quarter. The range was $0.82 to $0.92 per share.
In the 2013 first quarter, our inland tank barge fleet continues to maintain high utilization rates with consistent and healthy levels of demand across all our markets a Greg Binion will have more to say about our Inland operations later in the call.
In our coastal tank barge fleet improvements and demand continued again in all markets during the quarter. The first quarter also is a historically a little slower due to some seasonality in that business. So overall it was a good quarter. Driving this improvement was demand for coastal transportation of crude oil and natural gas condensate and some new coastal movements that came out of Inland customers that we serve as. And also a strong utilization rates share of the Allied and Penn fleets, which were both acquired late last year.
The quarter was also held by a strong heating oil demand associated with cold weather up in the North East. In our land-based diesel engine service business the market for manufacturing of new pressure pumping units continues to be somewhat challenging a partially offsetting this decline is in making pressure pumping units is a progress, it were making and remanufacturing these units.
We remain confident in the long-term strategy of growing the service side of our land-based business, and I think as we do that the business will be more stable and predictable. We’re also making good progress in making this process more efficient and making the supply chain to work better. Also want to remind you that United is only about 5% of the 2013 forecasted EBITDA for Kirby.
With respect to our legacy diesel engine business, the marine business, while market conditions were generally stable across most of the markets they service. The low water conditions on the Mississippi river last year did lead some customers to differ several major projects that we expected to do in the first quarter to later in 2013.
The Gulf Oil service market has stabilized, it is moving to more normal levels after sharp declines caused by Makanda. And the power generation market in that business in stable with continued good sales and engine generator upgrade projects.
Before turning the call over, I want to comment on an incident that Bob some Kirby equipment last night, which gotten some immediate attention. It about 8.30 PM, yesterday evening two empty unmanned tank barges owned by Kirby and the Marine, which were carrying last cargo natural gasoline were being cleaned by a mobile shipyard and caught fire and exploded, these barges were empty when this happened. The barges had been turned over to the shipyard and marine in the shipyards custody, when this incident occurred. Three individuals were injured and we understand they’re hospitalized with burns. No Kirby employees were injured. U.S. Coast Guard the Mobile, Fire Department and Kirby Strike Team responded with its personnel and resources, and Kirby is fully engaged in working with the coast guard in determining the cause of this incident. Of course our thoughts and prayers today are with the injured and their families, which were affected by this incident.