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Kirby's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Stocks in this article: KEX

Joe Pyne

Okay, thank you Steve. Late yesterday, we announced record setting net earnings for the 2011 fourth quarter of a dollar per share reflecting a 69% improvement over the $0.59 per share reported for the 2010 fourth quarter. For the year, we announced record earnings of $3.33 per share, a 55% increase compared to $2.15 per share for 2010. Our record fourth quarter and year earnings were the result of strong demand for inland tank barge service, modest earnings contribution from our coastal marine tank barge business, strong earnings from our land-based diesel engine service business and improved earnings from our heritage marine diesel engine service business.

I will speak briefly about K-Sea’s results, our coastal tank barge operation. And I am going to turn the call over to Greg Binion who will update you on our inland marine transportation and diesel engine service markets.

With respect to K-Sea, K-Sea’s operating results were as expected for both fourth quarter and the year. Fourth quarter is generally a more difficult quarter for coastal business due to some seasonality in the cargos, we carry principally the refined products and either the closure or a reduction in demand in Alaska and on the Great Lakes, as poor weather conditions affect those operations.

In addition, the fourth quarter included a $1,250,000 severance charge associated with integrating K-Sea’s back office into Kirby’s.

For the fourth quarter, K-Sea’s equipment utilization was approximately 75% to 80% with respect to pricing. Contracts in this market that renewed during the fourth quarter were basically flat and spot contracts improved in the low-to-mid single digit range year-over-year.

During the fourth quarter, approximately 60% of K-Sea’s revenues were under term contract and 40% were in the spot market.

Time charters in this coastal business represent approximately 90% of the revenues under term contracts for the quarter. With refined product demand tying K-Sea more to the US economy than our inland operation, K-Sea’s equipment utilization levels and pricing environment remains below our inland transportation business.

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