Kirby Corporation (NYSE:KEX) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 08:30 am ET

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Kirby Corporation (NYSE:KEX) Q4 2014 Earnings Conference Call - Final Transcript

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Operator
operator

Welcome to the Kirby Corporation 2014 Fourth Quarter Earnings Conference Call. My name is Helen, and I will be your operator for today's call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Sterling Adlakha. Sterling, you may begin.

Executive
Sterling Adlakha

Thanks Helen, and thank you all for joining us this morning. With me today are Joe Pyne, Kirby's Chairman; David Grzebinski, Kirby's President and Chief Executive Officer; and Andy Smith, Kirby's 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 www.kirbycorp.com in the Investor Relations section under non-GAAP financial data.

(Forward-Looking Cautionary Statements)

I will now turn the call over to Joe.

Executive
Joseph Pyne

Thank you. Thank you Sterling, and good morning. Yesterday afternoon, we announced our fourth quarter earnings of $1.19 per share. That compares with $1.13 per share reported for the 2013 fourth quarter, and is at the upper end of the revised guidance range we provided in December of $1.10 to $1.20 per share.

For the year, we achieved our fourth consecutive year of record earnings of $4.93 per share compared with $4.44 per share

Executive
Joseph Pyne

in 2013. Our 2013 results also included a $0.20 per share benefit from reducing the earn out liability associated with the acquisition of United Holdings.

During the 2014 fourth quarter, our marine transportation inland and coastal tank barge fleets experienced healthy levels of demand across all markets and high equipment utilization levels. In the coastal market, pricing increases remain good. In the inland market despite some pressure on spot prices, we continued to be very busy.

As I stated on our guidance call in December a steep decline in energy prices over the past three months is frankly good for the economy and should translate into more petrochemical and refined product demands and volumes which we will be able to move. US petrochemical business continues to remain globally advantaged, which has spurned an unprecedented level of new plant construction. We expect to see substantial increases in domestic petrochemical production over the next several years from these new petrochemical facilities.

In the crude oil and condensate markets, lower oil prices could lead to a decline in volumes. Customers continue to view the real or perceived loss of this volume as a reason to resist inland marine price increases, particularly since prices are already at historically high levels. Heightened uncertainty has also given some carriers pause when attempting to achieve higher pricing particularly for equipment in the spot market.

With respect to Kirby we have been very selective concerning whom we work for in the crude and condensate markets. Only about 6% of our inland equipment is dedicated now to carrying these products and all of it is under contract. As