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Kirby Corporation (KEX)
Q1 2014 Earnings Call
May 1, 2014 11:00 a.m. ET
Steve Holcomb – VP, Investor Relations
Sterling Adlakha – President and COO
Joe Pyne – Chairman
David Grzebinski – President and CEO
Andy Smith – EVP and CFO
Jack Atkins – Stephens Inc
Michael Webber – Wells Fargo Securities
Jon Chappell – Evercore Partners
[Sean Collins] – Bank of America
Gregory Lewis – Credit Suisse
William Horner – BB&T Capital Markets
Chris Carey – FBR Capital Markets
David Beard – Iberia Capital Partners
Matt Young – Morningstar Equity Research
Previous Statements by KEX
» Kirby's CEO Discusses Q4 2013 Results - Earnings Call Transcript
» Kirby's CEO Discusses Q3 2013 Results - Earnings Call Transcript
» Kirby Corporation Discusses Q3 2013 Results (Webcast)
» Kirby Corporation (KEX) CEO Discusses Q2 2013 Results - Earnings Call Transcript
Thank you for joining us this morning. With Sterling Adlakha and myself and Joe Pyne, Kirby's Chairman, David Grzebinski, Kirby's President and Chief Executive Officer and Andy Smith our Executive Vice President and Chief Financial Officer.
During this conference call, we may refer to certain non-GAAP or adjusted financial measures. A reconciliation of the non-GAAP financial measures to the 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 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 Form 10-K for the year ended December 31, 2013, filed with Securities and Exchange Commission.
I will now turn the call over to Joe.
Thank you, Steve. Yesterday afternoon we announced record first quarter earnings of a $1.09 per share. These results included a $0.03 per share of severance charges and an estimated $0.03 per share earnings impact from the result of weather and insurance deductible cost, but they still fell low within the our published range of $1.05 to $1.15 per share given in January.
This compares with a $1 per share reported in the 2013 first quarter. A quarter that included $0.05 per share benefit for the reduction of the earnout liability associated with the acquisition of United Holdings in April, 2011.
During the quarter, our inland and coastal tank barge fleets continue to experience healthy levels of demand across all their markets. High equipment utilization and favorable pricing trends. We did experience higher than anticipated delays in our inland marine operations caused by weather in the Midwest which persisted longer and we had estimated in our first quarter guidance.
Severe ice conditions restricted our movements on the upper inland river system and extended beyond, which what is typically expected for most years. We also saw greater than normal delays in our inland business along the Gulf Coast because of winter weather systems.
With respect to the coastal marine operations, they were also impacted by weather. The cold weather in the Northeast did provide some offsetting benefit in the form of higher heating oil volumes transported in the Northeast. With respect to our land-based diesel engine market, it showed modest signs of improvement during the quarter.
We think this market will continue to improve this year and we should see more material recovery in this business later this year. With the change in roles at Kirby, the cadence of our earnings call will change slightly. David will discuss our quarterly results and provide more detailed on a marine transportation and diesel engine service markets.
Andy will then provide the financial update, after Andy's comments David will conclude with some comments about our 2014 second quarter full year outlook. Before I turn the call over to David, I do want to comment both on our succession plan and the incident that involved a Kirby vessel that occurred in Houston Ship Channel on March 22.
With respect to the succession plan, last night we announced the boards of David Grzebinski as our President and Chief Executive Officer and his election as a Kirby, Director. When we announced the plan to transition that role in April, 2013. When we first announced it, I'm very pleased that the board chose David.
I plan to continue to stay as an Active Chairman of the Board and look forward to working with David in his new role. I also intend to transition the principal Investor Relations role for Kirby from Steve Holcomb to Sterling Adlakha, this year.
Steve has working with Kirby for 41 years and has done a superb job heading our IR effort. Steve will remain with Kirby helping with our SEC filings and ensuring a smooth transition. With respect to the very unfortunate incident in spill that involved the Miss Susan on March 22.
We are very grateful for the high level of cooperation and coordination shown by Federal State and local agencies and the US Coast Guard in the cleanup efforts. Under the Pollution laws of the United States, as Kirby owned the barge carrying the product will require to pay for the cleanup which has gone very well.
As of today, the cleanup effort is essentially complete. We will in coordination with all these agencies continue to monitor the affected areas for any lingering effects and will respond accordingly, but we don't expect there will be much left.