Kirby Corporation · NYSE:KEX
Kirby — Investor Presentation (June 2006)
47 slides from Kirby's investor presentation, Jun 14, 2006
Slide 1: Kirby Corporation: Putting America's Waterways to Work
Kirby Corporation Putting America’s Waterways to Work NYSE: KEX June
Slide 2: Forward Looking Statement and Non-GAAP Financial Measures
Statements contained in this presentation with respect to the future are forward-looking statements. These statements reflect management’s reasonable judgement with respect to future events. Forward-looking statements involve risks and uncertainties. Actual results could differ materially from those
Slide 3: Kirby Business Operations
Marine Transportation 86% of 2005 Revenue - $686.0 million Largest U.S. Inland Tank Barge Operator Diesel Engine Services 14% of 2005 Revenue - $109.7 million Largest U.S. EMD Diesel Services Company Kirby... Business Operations
Slide 4: Kirby Public Market Facts
NYSE: K E X $33.95 52.7M $1,789M $200M $1,989M 2,450 Current Price (June 12, 2006) Number of Shares O/S Market Capitalization Debt (March 31, 2006) Enterprise Value Employees Kirby…Public Market Facts
Slide 5: Kirby Facts
– Lowest cost due to economies of scale – Best positioned for growth opportunities – “One Stop Shop” for customers Kirby Facts • Largest inland tank barge operator • Operates 893 barges and 239 towing vessels • Sustainable competitive advantages: • 70% of Kirby’s business is under contract and 30% i
Slide 6: Acquisitions in Core Business
* Towboats Only Date No. of Tank Barges Description Hollywood Marine, Inc. - Stellman - Alamo Barge Lines - Ellis Towing - Arthur Smith - Koch Ellis - Mapco Cargo Carriers Coastal Towing, Inc. (barge management agreement for 54 barges) Dow/Union Carbide (transportation assets) SeaRiver Maritime (Exx
Slide 7: Revenue
17% growth rate from 1988-2005 Revenue... Business Operations
Slide 8: Earnings Per Share From Continuing Operations
1994-2001 adjusted to exclude goodwill amortization expense 2002 adjusted to exclude impairment charges of $12.5 million, net of taxes, or $.51 per share See Appendix for reconciliation of GAAP to Non-GAAP earnings per share Earnings per share have been revised to reflect 2-for-1 stock split effecti
Slide 9: Inland Waterway System
Corpus Christi New Orleans Mobile Brownsville 12,000 miles of navigable waterways linking America’s heartland to the world Kirby is one of the few operators offering distribution throughout the Mississippi River System and Gulf Intracoastal Waterway St. Paul Sioux City Chicago Pittsburgh Charleston
Slide 10: Industry Facts
Industry Facts • Approximately 17,800 dry cargo barges, 2,800 liquid tank barges. Kirby is principally in the liquid cargo business. • No competition from foreign companies due to a U.S. law known as the Jones Act • Always a market to move product by barge on inland waterways • Equipment not subject
Slide 11: Differences Between Liquid Tank Barges and Dry Cargo Barges
Liquid Dry Cargo Cargoes Value of Cargo Pricing Drivers Volatility of Volumes Crews Cost of Barges Regulatory Requirements 2,800 Barges 17,800 Barges Petrochemicals, Black oil products, Refined products Grain, Coal, Aggregate, Steel High Generally much lower Added value-safety, service and availabil
Slide 12: Number of Inland Tank Barges
For the years 1993 through 2005 single hull tank barges industry wide, 20 operated by Kirby Number of Inland Tank Barges
Slide 13: Inland Tank Barge Fleet
Source: Informa Economics, Barge Fleet Profile, March 2006 Inland Tank Barge Fleet
Slide 14: Barges Compete Successfully With Rails and Trucks
Kirby’s fleet capacity of 16.7 million bbls. trucks, or rail cars 90,000 bbl. three-barge tow is equivalent to: equates to 83,500 22,200 Rail Cars Trucks Barges Compete Successfully With Rails and Trucks
Slide 15: Barges... Efficient
One gallon of fuel in a barge can move one ton of freight 522 miles, compared to 403 miles by rail and only 80 miles for a truck. Barge Rail Truck Barges… Efficient
Slide 16: Barges... Environmentally Friendly
While moving one ton of freight 1,000 miles: • Smog is a major problem in most major cities • Oxides of nitrogen are the chemicals that produce smog Trains produce 3.5 times more nitrogen oxides as barges Trucks produce 19 times more nitrogen oxides as barges Barges… Environmentally Friendly
Slide 17: Kirby Inland Marine
KIRBY INLAND MARINE
Slide 18: Largest Inland Tank Barge Operator
Petrochemicals – 67% Black Oil Products – 20% Agricultural Chemicals – 4% Refined Products – 9% • Benzene • Styrene • Methanol • Acrylonitrile • Xylene • Caustic soda • Butadiene • Propylene • Residual fuel • No. 6 fuel oil • Coker feed • Vacuum gas • Asphalt • Anhydrous ammonia • Nitrogen-based liq
Slide 19: High Tech and Diverse Fleet
Petrochemicals /Refined Products High Capacity pumps – Specialty coated tanks Pressure Pressurized tanks Black Oil Self-contained heating systems Anhydrous Ammonia Refrigeration tanks Specialty Stainless steel tanks High Tech and Diverse Fleet Active Tank Barges
Slide 20: Fleet Size and Diversity... Better Asset Utilization
– More backhaul opportunities – Faster barge turnarounds – More efficient use of horsepower – Barges positioned closer to cargos – Enhanced purchasing power – Minimal incremental G&A from fleet additions – Less cleaning due to more barges with compatible prior cargos Fleet Size and Diversity… Better
Slide 21: Tank Barge Owners By Number of Tank Barges
Informa Economics, Barge Fleet Profile, March 2006 - Adjusted Tank Barge Owners By Number of Tank Barges Shipper Owned Independent Tank Barges Operated Dry Cargo Barges Operated Kirby Corporation - American Commercial Lines LLC 2,803 Marathon Oil Corporation - Canal Barge Company, Inc. Ingram Barge
Slide 22: End Uses of Products... Demand Drivers
Revenue Distribution Products Moved Products Drivers 67% Petrochemicals and Chemicals Benzene, Styrene, Methanol, Acrylonitrile, Xylene, Caustic Soda, Butadiene, Propylene Housing, Consumer Goods, Autos, Clothing 20% Black Oil Products Residual Fuel, No. 6 Fuel Oil, Coker Feedstock, Vacuum Gas Oil,
Slide 23: Strong Emphasis on Safety
– Extensive company-owned and operated training facility – Seamen’s Church Institute (Towboat Simulator) – First winner of Benkert Award, highest award given by Department of Transportation for safety and environmental protection • Committed to dedicating adequate resources to achieve safety objecti
Slide 24: Blue Chip Customers
Blue Chip Customers
Slide 25: Kirby Engine Systems
Kirby Engine Systems
Slide 26: Diesel Engine Services Markets
– 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 – Standby Power Generation – Pumping Stations – Industrial Reduction Gears – Passenger (Transit Systems) – Cla
Slide 27: Services
Bearing and element replacement machining Line boring Overhauls Component repair Block welding Line boring Remanufacture engines Genuine OEM new parts Kirby remanufactured parts Nuclear dedication services Replacement Parts Engine Repair Reduction Gear Repair Case welding and Alignment Troubleshooti
Slide 28: Acquisitions and Internal Growth
Acquisitions 1987 1991 1995 1996 1997 2000 2000 2004 2005 2006 Internal Growth 1989 1992 1993 2000 2001 National Marine Ewing Diesel Percle Enterprises MKW Power Systems Crowley (Power Assembly Shop) West Kentucky Machine Shop Powerway Walker Paducah Corp. TECO (Diesel Services Division) Global Powe
Slide 29: Key Customers
Key Customers
Slide 30: Market Conditions
Market Conditions
Slide 31: Market Conditions: Year
• Record revenues, net earnings, earnings per share and EBITDA • Petrochemical and black oil products markets remained strong • Winter weather conditions in January and February. Favorable conditions in March, second quarter and fourth quarter • Hurricanes Katrina and Rita negatively impacted the th
Slide 32: Market Conditions: First Quarter
• Record revenues, net earnings, earnings per share and EBITDA • Petrochemical and black oil products markets remained strong • Favorable winter weather conditions positively impacted financial results, with delay days down 25% when compared with 2005 first quarter • Contract rates up 4% to 6%. Spot
Slide 33: Second Quarter and Year Outlook
• 2006 second quarter earnings per share guidance of $.42 to $.45, compared with $.36 for 2005 second quarter • Guidance based on: • Marine transportation operating fundamentals remain strong • Diesel engine services operating fundamentals are strong; however, will not include seasonal work for Midw
Slide 34: Future Growth Opportunities
– Kirby operates more efficiently due to size and distribution system – Competitors face fleet replacement decisions – Outsourcing by shippers provides growth opportunities – Customers seek to single source their requirements – Purchased two-thirds interest in Osprey Line, a provider of container on
Slide 35: Osprey Line, LLC
35 Osprey Line, LLC • Purchased one-third interest in April 2004 • Increased ownership to two-thirds in January 2006 • Transports containers on barge on U.S. inland waterway system and Gulf of Mexico • Future growth opportunity as U.S. contends with congestion problems • Provides attractive alternat
Slide 36: Financial Highlights
Financial Highlights
Slide 37: For Year Ended December 31, 2005
For Year Ended December 31, 2005
Slide 38: For First Quarter Ended March 31, 2006
For First Quarter Ended March 31, 2006
Slide 39: 11.7%! 10.0% 10.1% 10.1% 05% 9.7% B% ‘2000 2001 2002 2005
11.7%! 10.0% 10.1% 10.1% 05% 9.7% B% ‘2000 2001 2002 203 204 2005
Slide 40: EBITDA Per Share Growth
See Appendix for reconciliation of GAAP net earnings to Non-GAAP EBITDA 11.9% growth rate from - 2005 EBITDA Per Share Growth
Slide 41: Cash Flows
* Excluding acquisitions Cash Flows
Slide 42: Debt / Capitalization
25.9% 57.3% Debt / Capitalization
Slide 43: Balance Sheet
03/31/06 12/31/05 Change | Assets Current Assets $ 206M $ 186M $ 20M Property & Equipment 668 642 26 Goodwill 165 161 - Other Assets Total Assets D) Liabilities &Equity Current Liabilities $ 148M —-$ 140M $ Total Debt 201 200 1 Other Liabilities 146 148 @Q) Stockholders’ Equity 573 538 _35 Total Lia
Slide 44: Financial Strength
– Standard & Poor’s – BBB+ – Moody’s – Baa3 – $200 million outstanding – Floating rate of LIBOR +0.5% – No required principal payments until maturity – Accordion feature added to allow maximum amount to increase to $225 million without amendment – $150 million of interest rate swaps • Investment gra
Slide 45: Why Invest In Kirby?
Why Invest In Kirby?
Slide 46: Why Invest in Kirby?
• Consistent long-term record of success in our two core businesses • Excellent business fundamentals • Strong free cash flow for growth • Internal and external growth opportunities in core businesses • Strong operating leverage with every 1% increase in marine transportation segment margin adds $.0
Slide 47: Thank You For Listening to Our Story
Thank You For Listening to Our Story Kirby Corporation Putting America’s Waterways to Work