<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
For the quarter ended March 31, 1997
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Commission File Number 1-7615
Kirby Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 74-1884980
- -------------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1775 St. James Place, Suite 200, Houston, TX 77056-3453
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(713) 435-1000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
1775 St. James Place, Suite 300, Houston, TX 77056-3453
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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.
Yes [X] No [ ]
The number of shares outstanding of the registrant's Common Stock, $.10 par
value per share, on May 5, 1997 was 24,300,336.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
($ in thousands)
<S> <C> <C>
Current assets:
Cash and invested cash $ 2,729 1,544
Available-for-sale securities - short-term investments 18,154 18,199
Accounts and notes receivable, net of allowance for
doubtful accounts 80,379 79,866
Inventory - finished goods, at lower of average cost or market 16,585 16,361
Prepaid expenses and other 15,209 13,315
Deferred taxes 1,004 600
-------- -------
Total current assets 134,060 129,885
-------- -------
Property and equipment, at cost 524,204 518,773
Less allowance for depreciation 208,010 200,049
-------- -------
316,194 318,724
-------- -------
Investments in affiliates:
Insurance affiliate 42,010 44,554
Marine affiliates 12,522 12,697
-------- -------
54,532 57,251
-------- -------
Excess cost of consolidated subsidiaries, net of accumulated
amortization 8,141 8,316
Sundry 9,159 10,354
-------- -------
$522,086 524,530
======== =======
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE> 3
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
($ in thousands)
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 5,333 5,333
Income taxes payable 4,430 4,027
Accounts payable 26,813 30,518
Accrued liabilities 49,080 44,511
Deferred revenues 5,451 5,302
--------- -------
Total current liabilities 91,107 89,691
--------- -------
Long-term debt, less current portion 177,517 176,617
Deferred taxes 46,705 45,901
Other long-term liabilities 6,709 6,567
--------- -------
230,931 229,085
--------- -------
Contingencies and commitments -- --
Stockholders' equity:
Preferred stock, $1.00 par value per share. Authorized 20,000,000
shares -- --
Common stock, $.10 par value per share. Authorized 60,000,000
shares, issued 30,907,000 shares 3,091 3,091
Additional paid-in capital 158,665 158,712
Unrealized net losses in value of available-for-sale securities (851) (32)
Retained earnings 120,002 115,263
--------- -------
280,907 277,034
Less cost of 6,607,000 shares in treasury (6,129,000 at December
31, 1996) 80,859 71,280
--------- -------
200,048 205,754
--------- -------
$ 522,086 524,530
========= =======
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
--------- ----------
($ in thousands, except
per share amounts)
<S> <C> <C>
Revenues:
Transportation $ 77,912 77,472
Diesel repair 20,544 14,935
Investment income 291 337
Loss on disposition of assets (16) (16)
Other 184 175
-------- ------
98,915 92,903
-------- ------
Costs and expenses:
Costs of sales and operating expenses (except as shown below) 67,199 61,462
Selling, general and administrative 11,322 10,151
Taxes, other than on income 1,825 1,925
Depreciation and amortization 8,796 9,388
-------- ------
89,142 82,926
-------- ------
Operating income 9,773 9,977
Equity in earnings of insurance affiliate 401 969
Equity in earnings of marine affiliates 863 748
Interest expense (3,374) (3,315)
-------- ------
Earnings before taxes on income 7,663 8,379
Provision for taxes on income (2,924) (3,139)
-------- ------
Net earnings $ 4,739 5,240
======== ======
Net earnings per share of common stock $ .19 .20
======== ======
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
--------- --------
($ in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 4,739 5,240
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 8,796 9,388
Provision for deferred income taxes 842 983
Loss on disposition of assets 16 16
Deferred scheduled maintenance costs 2,895 1,421
Equity in earnings of insurance affiliate, net of redemption 1,599 (969)
Equity in earnings of marine affiliates, net of distributions 176 (748)
Other -- 628
Increase in cash flows resulting from changes in operating working
capital (3,275) 6,200
-------- -------
Net cash provided by operating activities 15,788 22,159
-------- -------
Cash flows from investing activities:
Proceeds from sale and maturities of investments 1,935 --
Purchase of investments (2,205) (1,793)
Capital expenditures (6,358) (13,787)
Proceeds from disposition of assets 750 2,737
-------- -------
Net cash used in investing activities (5,878) (12,843)
-------- -------
Cash flows from financing activities:
Payments on bank revolving credit agreements, net (15,100) (8,600)
Increase in long-term debt 50,000 --
Payments on long-term debt (34,000) (426)
Purchase of treasury stock (10,608) --
Proceeds from exercise of stock options 983 81
-------- -------
Net cash used in financing activities (8,725) (8,945)
-------- -------
Increase in cash and invested cash 1,185 371
Cash and invested cash, beginning of year 1,544 1,457
-------- -------
Cash and invested cash, end of period $ 2,729 1,828
======== =======
Supplemental disclosures of cash flow information:
Cash paid during the period:
Interest $ 1,550 1,138
Income taxes $ 294 300
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE> 6
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited condensed
financial statements of Kirby Corporation and consolidated subsidiaries (the
"Company") contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March
31,1997 and December 31, 1996, and the results of operations for the three
months ended March 31, 1997 and 1996.
(1) BASIS FOR PREPARATION OF THE CONDENSED FINANCIAL STATEMENTS
The condensed financial statements included herein have been prepared
by 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 latest
Annual Report on Form 10-K.
(2) TAXES ON INCOME
Earnings before taxes on income and details of the provision for taxes
on income for the three months ended March 31, 1997 and 1996 were as follows
(in thousands):
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------
1997 1996
------ ------
<S> <C> <C>
Earnings before taxes on income:
United States $7,262 7,410
Foreign 401 969
------ -----
$7,663 8,379
====== =====
Provision for taxes on income:
United States:
Current $1,727 2,016
Deferred 827 983
State and municipal 170 140
------ -----
2,724 3,139
Puerto Rico - Current 200 --
------ -----
$2,924 3,139
====== =====
</TABLE>
6
<PAGE> 7
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS - (Continued)
(3) LONG-TERM DEBT
The Company has on file a shelf registration on Form S-3 with the
Securities and Exchange Commission providing for the issue of up to
$250,000,000 of medium term notes ("Medium Term Notes") at fixed or floating
interest rates with maturities of nine months or longer. In January 1997, the
Company issued $50,000,000 of the authorized Medium Term Notes at a fixed
interest rate of 7.05%, due January 29, 2002. Proceeds from the issuance were
used to retire $34,000,000 of Medium Term Notes due March 10, 1997, with the
balance used to reduce the Company's revolving credit agreement (the "Credit
Agreement") with Texas Commerce Bank National Association, as agent bank. As of
March 31, 1997, $121,000,000 was available under the Medium Term Notes program
and $44,700,000 was available for takedown under the Credit Agreement. Both
issues are available to provide financing for future business and equipment
acquisitions and working capital requirements.
(4) INSURANCE DISCLOSURE
The Company's investment in Universal Insurance Company
("Universal"), a property and casualty insurance company operating exclusively
in the Commonwealth of Puerto Rico, is accounted for under the equity method of
accounting. Currently, the Company owns 45% of Universal's voting common stock
and 55% is owned by Eastern America Financial Group, Inc. In March 1997,
Universal redeemed $2,000,000 of Universal's voting common stock, reducing the
Company's voting common stock investment in Universal from 47% to 45%.
7
<PAGE> 8
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
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 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, fog and ice, marine accidents, construction of new equipment by
competitors, including construction with government assisted financing,
government and environmental laws and regulations, and the timing, magnitude
and number of acquisitions made by the Company.
The Company is a provider of marine transportation services for both
the inland and offshore marine markets. The marine transportation segment is
divided into two divisions, organized around the markets they serve. The Inland
Division serves the inland industrial chemical, petrochemical, agricultural
chemical and refined products markets. The Offshore Division serves the
offshore refined products, dry-bulk, container and palletized cargo markets.
The Offshore Division also serves as managing partner of two offshore marine
partnerships, of which the Company has a 35% and 50%, respectively, ownership.
The partnerships are accounted for under the equity method of accounting.
The Company is engaged through its Diesel Repair Division in the
sale, overhaul and repair of large medium-speed diesel engines in marine, power
generation and rail applications. The Company's 45% voting common stock
investment in Universal is accounted for under the equity method of accounting.
RESULTS OF OPERATIONS
The Company reported net earnings for the 1997 first quarter of
$4,739,000, or $.19 per share, on revenues of $98,915,000, compared with
$5,240,000, or $.20 per share, on revenues of $92,903,000 for the 1996 first
quarter. Net earnings for the 1997 first quarter were reduced by a net loss
estimated to total $1,750,000, or $.07 per share, from the effects of flooding
throughout the Mississippi River System.
The following table sets forth the Company's revenues and percentage
of such revenues for the three months ended March 31, 1997 compared with the
three months ended March 31, 1996 (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------------
1997 1996 INCREASE (DECREASE)
---------------------- ----------------------- ------------------------
AMOUNTS % AMOUNTS % AMOUNTS %
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Inland Division $54,811 55% $56,854 61% $(2,043) (4)%
Offshore Division 23,101 23 20,618 22 2,483 12
Diesel Repair Division 20,544 21 14,935 16 5,609 38
Other income 459 1 496 1 (37) (7)
------- ------- ------- ------- ------- -------
$98,915 100% $92,903 100% $ 6,012 6%
======= ======= ======= ======= ======= =======
</TABLE>
8
<PAGE> 9
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The 4% decline in revenue for the Inland Division was primarily
attributable to the severe flooding on the Mississippi River System during the
1997 first quarter, which resulted in an estimated loss of revenue of
$2,600,000. The flooding resulted in river closures in selected areas for
numerous days and mandated regulatory operating restrictions. During the
majority of the first quarter, the upper Mississippi River and Ohio River
experienced high water and flooding conditions. During the month of March, the
lower Mississippi River, the Company's principal area of operations,
experienced high water not seen in such severity since 1983. The loss of
revenue was the result of delays, diversions and limitations on night passages,
horsepower requirements and size of tows. In addition, the revenue for the
Inland Division for the three months ended March 31, 1996 included
approximately $1,900,000 of revenue from the Company's harbor services
operation, whose revenue for the 1997 first three months of approximately
$2,400,000 was included in the Offshore Division.
During the latter portion of the 1997 first quarter, the Inland
Division's equipment was fully utilized and spot market rates increased. Fleet
utilization and spot market pricing has benefited from the river system's
inefficiencies, as well as improved volumes in the inland chemical,
petrochemical and refined products markets.
The Offshore Division's 12% increase in revenue for the 1997 first
quarter was primarily attributable to the addition of the harbor services
operation's revenue of approximately $2,400,000 as noted above. The Division's
tanker fleet operated at full utilization at adequate rates for the majority of
the 1997 and 1996 first quarters, moving heating oil to the Northeast and
refined products to the West Coast. Spot market rates were higher during the
1997 first quarter compared with the 1996 first quarter. During the 1997 first
quarter, only one of the Company's two preference-aid freighters was employed,
compared with one fully employed, one partially employed and one idle during
the 1996 first quarter. The Company scrapped one freighter in September, 1996.
Lack of available movements and corresponding low rates continue to plague this
segment of the Offshore Division.
The Diesel Repair Division's revenue for the 1997 first three months
reflected a 38% increase over the 1996 corresponding quarter. The increase was
primarily due to the inclusion of MKW Power System, Inc. ("MKW"), whose
operating assets were acquired in July 1996. Such acquisition generated
approximately $7,300,000 of revenue during the 1997 first quarter. In addition,
the flooding on the Mississippi River System during the 1997 first quarter
affected the Diesel Repair Division, as its Midwest facility was negatively
impacted by deferred engine maintenance and overhauls from its inland marine
customers.
The following table sets forth the costs and expenses and percentage
of each for the three months ended March 31, 1997 compared with the three
months ended March 31, 1996 (dollars in thousands):
9
<PAGE> 10
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------------
1997 1996 INCREASE (DECREASE)
---------------------- ---------------------- -----------------------
AMOUNTS % AMOUNTS % AMOUNTS %
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Costs and expenses:
Costs of sales and operating expenses $67,199 75% $61,462 74% $ 5,737 9%
Selling, general and administrative 11,322 13 10,151 12 1,171 12
Taxes, other than on income 1,825 2 1,925 2 (100) (5)
Depreciation and amortization 8,796 10 9,388 12 (592) (6)
------- ------- ------- ------- ------- -------
$89,142 100% $82,926 100% $ 6,216 7%
======= ======= ======= ======= ======= =======
</TABLE>
The 9% increase in costs of sales and operating expenses primarily
reflected the Diesel Repair Division's 1997 first quarter costs and expenses
associated with the approximate $7,300,000 of revenues generated from the
operating assets acquired from MKW. In addition, the Inland Division's
operating expenses increased for the 1997 first quarter, reflecting the high
utilization of the vessels associated with the flooding.
Selling, general and administrative expenses increased 12% in the
1997 first quarter compared with the first quarter of 1996. The increase was
largely due to approximately $1,900,000 of additional expenses associated with
the Diesel Repair Division's acquisition of MKW. Selling, general and
administrative expenses for the Inland Division and corporate activities
declined approximately $900,000, reflecting the savings from the 1996
reorganization program, which was designed to reduce administrative costs and
improve operating efficiencies.
Depreciation and amortization for the 1997 first quarter was 6%
lower than the corresponding 1996 quarter. During the 1996 second quarter, the
Company changed the estimated depreciable lives of its inland tank barges and
towboats. The change, recorded in the 1996 second quarter, was effective as of
January 1, 1996 and decreased depreciation expense for the 1996 first six
months by $1,261,000. The change in the estimated lives provided a more
consistent matching of revenues and depreciation expenses over the economic
useful lives of the inland barges and towboats.
The following table sets forth the operating income and operating
margin by division for the three months ended March 31, 1997 compared with the
three months ended March 31, 1996 (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------------
1997 1996 INCREASE (DECREASE)
---------------------- ---------------------- ----------------------
AMOUNTS % AMOUNTS % AMOUNTS %
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Operating income (loss):
Inland Division $ 5,791 10.6% $ 7,208 12.7% $(1,417) (20)%
Offshore Division 3,104 13.4 2,564 12.4 540 21
Diesel Repair Division 1,547 7.5 1,183 7.9 364 31
Corporate, net (669) (978) 309 32
------- -------- ------- -------
$ 9,773 $ 9,977 $ (204) (2)%
======= ======== ======= =======
</TABLE>
10
<PAGE> 11
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
As stated above, flooding on the entire Mississippi River System
during the 1997 first quarter resulted in an estimated reduction in the Inland
Division's revenue and operating profit of $2,600,000. Adding back the flooding
impact, the Inland Division's 1997 first quarter operating margin was 14.6%, an
improvement over the 12.7% margin reported for the 1996 first quarter.
The following table sets forth the equity in earnings of affiliates
and interest expense for the three months ended March 31, 1997 compared with
the three months ended March 31, 1996 (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
INCREASE (DECREASE)
----------------------
1997 1996 AMOUNT %
------- ------- ------ -----
<S> <C> <C> <C> <C>
Equity in earnings of insurance affiliate $ 401 $ 969 $ (568) (59)%
Equity in earnings of marine affiliates 863 748 115 15%
Interest expense (3,374) (3,315) 59 2%
</TABLE>
The Company currently has a 45% voting common stock investment in
Universal. The amount recorded by the Company as equity in earnings for the
Company's investment in Universal is influenced to the extent that anticipated
future redemptions by Universal of its common stock exceeds the Company's
investment in Universal's stock. The Company also has a 100% investment in
Universal's nonvoting preferred stock. Because the preferred stock controls a
separate portfolio of U.S. Treasury Securities, the Company accounts for this
preferred stock under SFAS 115. Therefore, the interest earned, as well as the
realized gains from the sale of U.S. Treasury Securities collateralizing the
preferred stock, were included as part of equity in earnings of the insurance
affiliate. For the 1997 and 1996 first quarters, the Company recorded $251,000
and $237,000, respectively, of interest earned from its investment in U.S.
Treasury Securities, and recognized during the 1996 first quarter $582,000 of
realized gains from the sale of such U.S. Treasury Securities, which were
included in equity in earnings of insurance affiliate.
Equity in earnings of marine affiliates reflected a 15% increase for
the 1997 first quarter compared with the 1996 first quarter. The offshore
marine partnership vessels were fully employed during each comparable quarter,
with the exception of fewer shipyard days in the 1997 first quarter.
Interest expense reflected a 2% increase for the 1997 first quarter
compared with the first quarter of 1996 due to the increase in the long-term
debt to finance the purchase of treasury stock discussed below, and the
recently completed barge construction project also discussed below. Excess cash
flows from operating activities were used to pay down the long-term debt.
11
<PAGE> 12
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
BALANCE SHEET
Total assets as of March 31, 1997 were $522,086,000, a decrease of
less than 1%, compared with $524,530,000 as of December 31, 1996. The following
table sets forth the significant components of the balance sheet as of March
31, 1997 compared with December 31, 1996 (dollars in thousands):
<TABLE>
<CAPTION>
INCREASE (DECREASE)
MARCH 31, DECEMBER 31, ---------------------------
1997 1996 AMOUNT %
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Assets:
Current assets $ 134,060 $ 129,885 $ 4,175 3%
Property and equipment, net 316,194 318,724 (2,530) (1)
Investments in affiliates 54,532 57,251 (2,719) (5)
Other assets 17,300 18,670 (1,370) (7)
--------- --------- --------- ---------
$ 522,086 $ 524,530 $ (2,444) --%
========= ========= ========= =========
Liabilities and Stockholders' equity:
Current liabilities $ 91,107 $ 89,691 $ 1,416 2%
Long-term debt 177,517 176,617 900 1
Deferred taxes 46,705 45,901 804 2
Other long-term liabilities 6,709 6,567 142 2
Stockholders' equity 200,048 205,754 (5,706) (3)
--------- --------- --------- ---------
$ 522,086 $ 524,530 $ (2,444) --%
========= ========= ========= =========
</TABLE>
The 3% growth in current assets primarily reflected the increase in
prepaid expenses associated with the annual insurance premiums from the
Company's captive insurance subsidiary. The decrease of 1% of property and
equipment reflected the depreciation of approximately $8,100,000, offset by
approximately $6,400,000 of capital additions, which are more fully discussed
below. The 5% decrease in investments in affiliates was attributable to the
$2,000,000 redemption from Universal, more fully described below, and a
$1,039,000 distribution from the marine partnerships, offset by the equity in
earnings of the insurance affiliate and marine affiliates for the first
quarter of 1997. Other assets decreased 7% primarily from the amortization of
excess cost of consolidated subsidiaries and other intangibles totaling
$675,000 for the 1997 first quarter.
Long-term debt, more fully described below, increased $900,000
during the quarter, reflecting an increase in long-term debt associated with
the treasury stock acquisitions, less paydowns on debt from the operating cash
flow generated during the quarter. The 2% increase in deferred taxes payable
was directly attributable to the $827,000 provision for deferred taxes.
Stockholders' equity decreased 3% during the 1997 first quarter, reflecting the
net earnings of $4,739,000, offset by the purchase of treasury stock of more
fully described below, and a decrease in the unrealized value of investments
associated with the Universal preferred stock described above.
12
<PAGE> 13
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
LONG-TERM DEBT
In January 1997, the Company issued $50,000,000 of Medium Term Notes
at a fixed interest rate of 7.05% due January 29, 2002. Proceeds from the
issuance were used to retire the $34,000,000 of Medium Term Notes due March 10,
1997, with the balance used to reduce the Company's $100,000,000 revolving
Credit Agreement. As of March 31, 1997, $95,000,000 was outstanding under the
Medium Term Notes program and $55,300,000 was outstanding under the Credit
Agreement.
CAPITAL EXPENDITURES
The Company continued to enhance its existing operations through the
construction of new equipment. During the 1997 first quarter, the final two
newly constructed inland tank barges were placed in service, completing the
order of 24 double-skin 29,000 barrel capacity barges, for use in the movement
of industrial chemicals and refined products. The construction project cost
approximately $1,500,000 per barge. Funds for the construction project were
available through the Company's Credit Agreement and cash provided by operating
activities.
TREASURY STOCK PURCHASES
During the 1997 first quarter, the Company purchased 564,450 shares
of its own common stock at a total purchase price of $10,608,000, for an
average price of $18.80 per share. Since April 1, 1997, the Company has
purchased 16,200 shares of its common stock at a total purchase price of
$279,000, for an average price of $17.20 per share. As of May 5, 1997, the
Company had 1,859,000 shares available under the 6,250,000 total repurchase
authorization. The treasury stock purchases were financed by borrowing under
the Company's Credit Agreement. 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, in future acquisitions
for stock or for other appropriate corporate purposes.
LIQUIDITY
The Company generated net cash provided by operating activities of
$15,788,000 for the first three months of 1997 compared with $22,159,000 for
the 1996 first three months. The 1997 first quarter was negatively affected by
a $3,275,000 decrease from changes in operating working capital, compared with
an increase of $6,200,000 from changes in operating working capital for the
1996 first quarter. The 1997 first quarter also included a $2,000,000
redemption of Universal's common stock and a $1,039,000 distribution from
marine partnerships.
13
<PAGE> 14
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Funds generated are available for capital construction projects,
treasury stock repurchases, asset acquisitions, repayment of borrowings
associated with treasury stock acquisitions or asset acquisitions and for other
operating requirements. In addition to its net cash provided by operating
activities, the Company also has available as of May 5, 1997, $48,000,000 under
its revolving credit agreement and $121,000,000 available under its Medium Term
Notes program. The Company's fixed principal payments during the next 12 months
are $5,333,000.
During the last three years, inflation has had a relatively minor
effect on the financial results of the Company. The marine transportation
segment has long-term contracts which generally contain cost escalation clauses
whereby certain costs, including fuel, can be passed through to its customers,
while the transportation assets acquired and accounted for using the purchase
method of accounting were adjusted to a fair market value and, therefore, the
cumulative long-term effect on inflation was reduced. The repair portion of the
diesel repair segment is based on prevailing current market rates. The Company
does not presently use financial derivatives, but uses a mix of floating and
fixed rate debt. The Company has no foreign exchange risks.
The Company has no present plan to pay dividends on its common
stock.
14
<PAGE> 15
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For a detailed explanation of the material pending legal proceedings
against the Company, please refer to the Form 10-K for the year
ended December 31, 1996.
Item 4. Results of Votes of Security Holders
(a) The Registrant held its Annual Meeting of Stockholders on April 15,
1997.
(b) Proxies for the meeting were solicited pursuant to Regulation 14;
there was no solicitation in opposition to management's nominees for
directors as listed in the Proxy Statement, and all such nominees
were elected.
Directors elected were George F. Clements, Jr., C. Sean Day, William
M. Lamont, Jr., George A. Peterkin, Jr., J. H. Pyne, Robert G.
Stone, Jr., Thomas M. Taylor and J. Virgil Waggoner. No other
directors previously in office continued as a director or continued
in office after the meeting.
(c) A proposal to approve the 1996 Employee Stock Option Plan was also
approved by the Stockholders at the Annual Meeting. The number of
affirmative, negative and abstained votes with respect to the matter
was as follows:
For 18,960,049
Against 2,783,761
Abstain 121,531
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
11.0 Computation of Earnings per Common Share.
27.0 Financial Data Schedule.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the three months ended
March 31, 1997.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities and 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/ G. STEPHEN HOLCOMB
-----------------------
G. Stephen Holcomb
Vice President and
Controller
Dated: May 6, 1997
<PAGE> 17
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- ------------
<S> <C>
11.0 Computation of Earnings per Common Share.
27.0 Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 11.0
KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
----------------------------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Net earnings $ 4,739 5,240
======= ======
Shares:
Weighted average number of common shares outstanding 24,605 26,260
Common equivalent shares for dilutive effect of
assumed exercise of stock options 299 340
------- ------
24,904 26,600
======= ======
Net earnings per share of common stock $ .19 .20
======= ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF EARNINGS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,729
<SECURITIES> 18,154
<RECEIVABLES> 81,081
<ALLOWANCES> 702
<INVENTORY> 16,585
<CURRENT-ASSETS> 134,060
<PP&E> 524,204
<DEPRECIATION> 208,010
<TOTAL-ASSETS> 522,086
<CURRENT-LIABILITIES> 91,107
<BONDS> 177,517
0
0
<COMMON> 3,091
<OTHER-SE> 196,957
<TOTAL-LIABILITY-AND-EQUITY> 522,086
<SALES> 17,376
<TOTAL-REVENUES> 98,915
<CGS> 12,099
<TOTAL-COSTS> 67,199
<OTHER-EXPENSES> 21,943
<LOSS-PROVISION> 1
<INTEREST-EXPENSE> 3,374
<INCOME-PRETAX> 7,663
<INCOME-TAX> 2,924
<INCOME-CONTINUING> 4,739
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,739
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
