40 unchanged sentences
Treasury stock –
−Removed: at cost, 5.5 million shares at March 31, 2023 and 5.6 million at December 31, 2022
+Added: at cost, 5.9 million shares at June 30, 2023 and 5.6 million at December 31, 2022
Total Kirby stockholders’
4 unchanged sentences
CONDENSED STATEMENTS OF EARNINGS
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
($ in thousands, except per share amounts)
19 unchanged sentences
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
($ in thousands)
9 unchanged sentences
CONDENSED STATEMENTS OF CASH FLOWS
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
($ in thousands)
40 unchanged sentences
(in thousands)
+Added: Balance at March 31, 2023
+Added: Issuance of stock for equity awards, net of forfeitures
+Added: Tax withholdings on equity award vesting
+Added: Amortization of unearned share-based compensation
+Added: Treasury stock purchases
+Added: Excise taxes on treasury stock purchases
+Added: Total comprehensive income, net of taxes
+Added: Balance at June 30, 2023
+Added: Comprehensive
+Added: Treasury Stock
+Added: Noncontrolling
+Added: (in thousands)
+Added: Balance at March 31, 2022
+Added: Stock option exercises
+Added: Issuance of stock for equity awards, net of forfeitures
+Added: Tax withholdings on equity award vesting
+Added: Amortization of unearned share-based compensation
+Added: Treasury stock purchases
+Added: Total comprehensive income, net of taxes
+Added: Return of investment to noncontrolling interests
+Added: Balance at June 30, 2022
+Added: See accompanying notes to condensed financial statements.
+Added: KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
+Added: CONDENSED STATEMENTS OF STOCKHOLDERS’
+Added: Comprehensive
+Added: Treasury Stock
+Added: Noncontrolling
+Added: (in thousands)
Balance at December 31, 2022
4 unchanged sentences
Treasury stock purchases
+Added: Excise taxes on treasury stock purchases
Total comprehensive income, net of taxes
−Removed: Balance at March 31, 2023
+Added: Balance at June 30, 2023
Comprehensive
7 unchanged sentences
Amortization of share-based compensation
+Added: Treasury stock purchases
Total comprehensive income, net of taxes
Return of investment to noncontrolling interests
−Removed: Balance at March 31, 2022
+Added: Balance at June 30, 2022
See accompanying notes to condensed financial statements.
11 unchanged sentences
The following table sets forth the Company’s revenues by major source (in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Marine transportation segment:
4 unchanged sentences
Contract liabilities represent advance consideration received from customers, and are recognized as revenue over time as the related performance obligation is satisfied.
−Removed: Revenues recognized during the three months ended March 31, 2023 and 2022 that were included in the opening contract liability balances were $ 38.8 million and $ 28.6 million , respectively.
+Added: Revenues recognized during the six months ended June 30, 2023 and 2022 that were included in the opening contract liability balances were $ 60.3 million and $ 46.7 million , respectively.
The Company presents all contract liabilities within the deferred revenues financial statement caption on the balance sheets.
−Removed: The Company did no t have any contract assets at March 31, 2023 or December 31, 2022 .
+Added: The Company did no t have any contract assets at June 30, 2023 or December 31, 2022 .
The Company applies the practical expedient that allows non-disclosure of information about remaining performance obligations that have original expected durations of one year or less.
9 unchanged sentences
The Company evaluates the performance of its segments based on the contributions to operating income of the respective segments, before income taxes, interest, gains or losses on disposition of assets, other nonoperating income, noncontrolling interests, accounting changes, and nonrecurring items.
−Removed: Intersegment revenues, based on market-based pricing, of KDS from KMT of $ 9.4 million and $ 7.6 million for the three months ended March 31, 2023 and 2022, respectively, as well as the related intersegment profit of $ 0.9 million and $ 0.8 million for the three months ended March 31, 2023 and 2022, respectively, have been eliminated from the tables below.
+Added: Intersegment revenues, based on market-based pricing, of KDS from KMT of $ 10.3 million and $ 19.7 million for the three months and six months ended June 30, 2023, respectively, and $ 6.3 million and $ 13.9 million for the three and six months ended June 30, 2022, respectively, as well as the related intersegment profit of $ 1.0 million and $ 2.0 million for the three months and six months ended June 30, 2023, respectively, and $ 0.6 million and $ 1.4 million for the three and six months ended June 30, 2022, respectively, have been eliminated from the tables below.
The following tables set forth the Company’s revenues and profit or loss by reportable segment and total assets (in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Marine transportation
8 unchanged sentences
segment loss (in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
General corporate expenses
7 unchanged sentences
The following table presents the carrying value and fair value (determined using inputs characteristic of a Level 2 fair value measurement) of debt outstanding (in thousands):
−Removed: March 31, 2023
+Added: June 30, 2023
December 31, 2022
10 unchanged sentences
Unamortized debt discounts and issuance costs (b)
−Removed: (a) Variable interest rate o f 6.3 % at March 31, 2023.
+Added: (a) Variable interest rate o f 6.6 % at June 30, 2023.
(b) Excludes $ 1.8 million attributable to the 2027 Revolving Credit Facility included in other assets at December 31, 2022 .
The following table presents borrowings and payments under the bank credit facilities (in thousands):
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
Borrowings on bank credit facilities
9 unchanged sentences
As a result, no repayments are required until June 30, 2025.
−Removed: Outstanding letters of credit under the 2027 Revolving Credit Facility were $ 5.1 million and available borrowing capacity was $ 382.9 million as of March 31, 2023.
+Added: Outstanding letters of credit under the 2027 Revolving Credit Facility were $ 0.1 million and available borrowing capacity was $ 472.9 million as of June 30, 2023.
The 2027 Term Loan is repayable in quarterly installments, with no repayments until June 30, 2025, in increasing percentages of the original principal amount of the loan, with the remaining unpaid balance of approximately $ 43.8 million payable upon maturity, assuming no prepayment.
17 unchanged sentences
(“Bank of America”) for short-term liquidity needs and letters of credit, with a maturity date of June 30, 2024 .
−Removed: Outstanding letters of credit under the $ 10 million credit line were $ 0.6 million and available borrowing capacity was $ 9.4 million as of March 31, 2023 .
+Added: Outstanding letters of credit under the $ 10 million credit line were $ 3.6 million and available borrowing capacity was $ 6.4 million as of June 30, 2023 .
The Company currently leases various facilities and equipment under cancelable and noncancelable operating leases.
9 unchanged sentences
The following table summarizes lease costs (in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Operating lease cost
7 unchanged sentences
The compensation cost that has been charged against earnings for the Company’s stock award plans and the income tax benefit recognized in the statement of earnings for stock awards were as follows (in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Compensation cost
Income tax benefit
−Removed: During the three months ended March 31, 2023, the Company grant ed 181,670 restricted stock units (“RSUs”) to selected officers and other key employees under the employee stock award plan which vest ratably over five years .
−Removed: During May 2023, the Company granted 30,150 shares of restricted stock to nonemployees directors of the Company under the director stock plan, the majority of which vest six months after the date of grant.
+Added: During the six months ended June 30, 2023, the Company grant ed 182,395 restricted stock units (“RSUs”) to selected officers and other key employees under the employee stock award plan, the majority of which vest ratably over five years and 31,526 shares of restricted stock to nonemployees directors of the Company under the director stock plan, the majority of which vest six months after the date of grant.
(8) Taxes on Income
−Removed: At March 31, 2023 and December 31, 2022, the Company had a federal income tax receivable of $ 70.4 million included in Accounts Receivable –
−Removed: Other on the balance sheets.
−Removed: During the first quarter of 2023, the Internal Revenue Service (“IRS”) communicated to the Company that it has completed its examination of the Company’s federal income tax returns for the years 2013 through 2020.
+Added: At December 31, 2022, the Company had a federal income tax receivable of $ 70.4 million included in Accounts Receivable –
+Added: Other on the balance sheet.
+Added: During the first quarter of 2023, the Internal Revenue Service (“IRS”) communicated to the Company that it had completed its examination of the Company’s federal income tax returns for the years 2013 through 2020.
In April 2023, the Company received its tax refund of $ 70.4 million plus accrued interest .
−Removed: Earnings before taxes on income and details of the provision for taxes on income were as follows (in thousands):
−Removed: Three Months Ended March 31,
+Added: Earnings before taxes on income and details of the provision (benefit) for taxes on income were as follows (in thousands):
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Earnings before taxes on income:
United States
−Removed: Provision for taxes on income:
+Added: Provision (benefit) for taxes on income:
State and local:
2 unchanged sentences
The following table presents the components of basic and diluted earnings per share (in thousands, except per share amounts):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Net earnings attributable to Kirby
11 unchanged sentences
Net earnings per share attributable to Kirby common stockholders:
−Removed: Certain outstanding options to purchase approximately 0.3 million and 0.4 million shares of common stock were excluded in the computation of diluted earnings per share as of March 31, 2023 and 2022 , respectively, as such stock options would have been antidilutive.
−Removed: There were no antidilutive RSUs as of March 31, 2023 and 2022.
+Added: Certain outstanding options to purchase approximately 0.3 million and 0.4 million shares of common stock were excluded in the computation of diluted earnings per share as of June 30, 2023 and 2022 , respectively, as such stock options would have been antidilutive.
+Added: Certain outstanding RSUs to convert to 12,000 shares of common stock were also excluded in the computation of diluted earnings per share as of June 30, 2022 as such RSUs would have been antidilutive.
+Added: There were no antidilutive RSUs as of June 30, 2023 .
(10) Inventories
17 unchanged sentences
On March 27, 2018, the Company amended the Higman pension plan to close it to all new entrants and cease all benefit accruals for periods after May 15, 2018 for all participants.
−Removed: The Company made contributions of $ 7.5 million to the Higman pension plan during the three months ended March 31, 2023.
+Added: The Company made contributions of $ 7.7 million to the Higman pension plan during the six months ended June 30, 2023 .
+Added: The Company expects to make additional contributions of $ 0.4 million during the remainder of 2023.
The Company sponsors an unfunded defined benefit health care plan that provides limited postretirement medical benefits to employees who meet minimum age and service requirements, and to eligible dependents.
−Removed: The plan limits cost increases in the Company’s contribution to 4 % per year.
The plan is contributory, with retiree contributions adjusted annually.
5 unchanged sentences
Pension Plans
−Removed: Three Months Ended March 31,
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Three Months Ended June 30,
Components of net periodic benefit cost:
3 unchanged sentences
Net periodic benefit cost
+Added: Pension Benefits
+Added: Pension Plans
+Added: Six Months Ended June 30,
+Added: Six Months Ended June 30,
+Added: Components of net periodic benefit cost:
+Added: Interest cost
+Added: Expected return on plan assets
+Added: Amortization of actuarial loss
+Added: Net periodic benefit cost
The components of net periodic benefit cost for the Company’s postretirement benefit plan were as follows (in thousands):
1 unchanged sentence
Postretirement Welfare Plan
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Components of net periodic benefit cost:
4 unchanged sentences
The Company’s changes in other comprehensive income were as follows (in thousands):
−Removed: Three Months Ended March 31,
−Removed: Income Tax Benefit
+Added: Three Months Ended June 30,
+Added: Income Tax (Provision) Benefit
Income Tax Provision
1 unchanged sentence
Amortization of net actuarial (gain) loss
+Added: Actuarial gains
Foreign currency translation
+Added: Six Months Ended June 30,
+Added: Income Tax (Provision) Benefit
+Added: Income Tax Provision
+Added: Pension and postretirement benefits (a):
+Added: Amortization of net actuarial (gain) loss
+Added: Actuarial gains
+Added: Foreign currency translation
(a) Actuarial gains are amortized into other income (expense).
16 unchanged sentences
The Company has issued guaranties or obtained standby letters of credit and performance bonds supporting performance by the Company and its subsidiaries of contractual or contingent legal obligations of the Company and its subsidiaries incurred in the ordinary course of business.
−Removed: The aggregate notional value of these instruments is $ 18.1 million at March 31, 2023, including $ 11.3 million in letters of credit and $ 6.8 million in performance bonds.
+Added: The aggregate notional value of these instruments is $ 24.0 million at June 30, 2023, including $ 9.4 million in letters of credit and $ 14.6 million in performance bonds.
All of these instruments have an expiration date within two years .
The Company does not believe demand for payment under these instruments is likely and expects no material cash outlays to occur regarding these instruments.
+Added: (14) Subsequent Event
+Added: On July 14, 2023, the Company purchased 23 inland tank barges with a total capacity of 265,000 barrels from an undisclosed seller for $ 37 million in cash.
+Added: The 23 tank barges transport petrochemicals and refined products on the Mississippi River System and the Gulf Intracoastal Waterway.
+Added: The average age of the 23 barges was 14 years.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
19 unchanged sentences
The following table summarizes key operating results of the Company (in thousands, except per share amounts):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Total revenues
3 unchanged sentences
Capital expenditures
−Removed: The 2023 first quarter included $3.0 million before taxes, $2.4 million after taxes, or $0.04 per share of costs related to strategic review and shareholder engagement and $2.7 million before taxes, $2.2 million after taxes, or $0.04 per share of other income associated with the interest on the refund from the Internal Revenue Service (“IRS”).
−Removed: Cash provided by operating activities for the 2023 first quarter decreased in comparison to the 2022 first quarter primarily due to an increase in working capital, partially offset by improved net earnings.
−Removed: For the 2023 first quarter, capital expenditures of $73.2 million included $46.6 million in KMT and $26.6 million in KDS and corporate, each more fully described under Cash Flow and Capital Expenditures below.
+Added: The 2023 first quarter included $3.0 million before taxes, $2.4 million after taxes, or $0.04 per share of costs related to strategic review and shareholder engagement and $2.7 million before taxes, $2.2 million after taxes, or $0.04 per share of other income associated with the interest on the refund from the IRS.
+Added: The 2022 second quarter included $1.5 million before taxes, $1.3 million after taxes, or $0.02 per share of severance expense.
+Added: Cash provided by operating activities for the 2023 first six months increased in comparison to the 2022 first six months primarily due to higher business activity levels and the receipt of the IRS refund.
+Added: For the 2023 first six months, capital expenditures of $171.2 million included $128.2 million in KMT and $43.0 million in KDS and corporate, each more fully described under Cash Flow and Capital Expenditures below.
The Company projects that capital expenditures for 2023 will be in the $300 million to $380 million range.
−Removed: The 2023 construction program will consist of up to approximately $40 million for the construction of inland specialized equipment, approximately $240 million primarily for maintenance capital and improvements to existing marine equipment, including ballast water treatment systems on some coastal vessels, and facility improvements.
−Removed: The balance of up to approximately $100 million relates to new electric fracturing equipment and facilities improvements in KDS, and information technology projects in corporate.
−Removed: The Company’s debt-to-capitalization ratio decreased to 25.9% at March 31, 2023 from 26.2% at December 31, 2022, primarily due an increase in total equity, largely due to the net earnings attributable to Kirby of $40.7 million, partially offset by treasury stock purchases of $3.2 million.
−Removed: The Company’s debt outstanding as of March 31, 2023 and December 31, 2022 is detailed in Long-Term Financing below.
+Added: Approximately $240 million is primarily for maintenance capital and improvements to existing marine equipment, including ballast water treatment systems on some coastal vessels, and facility improvements.
+Added: The 2023 construction program also consists of growth capital of up to approximately $40 million for the construction of specialized inland equipment, and of up to approximately $100 million for new electric fracturing equipment.
+Added: The Company’s debt-to-capitalization ratio decreased to 24.3% at June 30, 2023 from 26.2% at December 31, 2022, primarily due an increase in total equity, primarily from net earnings attributable to Kirby of $98.1 million, and a reduction of debt outstanding of $81.2 million, partially offset by treasury stock purchases of $37.6 million.
+Added: The Company’s debt outstanding as of June 30, 2023 and December 31, 2022 is detailed in Long-Term Financing below.
Marine Transportation
−Removed: For the 2023 first quarter, KMT generated 55% of the Company’s revenues compared to 58% for the 2022 first quarter.
+Added: For both the 2023 second quarter and first six months, KMT generated 55% of the Company’s revenues compared to 58% for both the 2022 second quarter and first six months.
The segment’s customers include many of the major petrochemical and refining companies that operate in the United States.
13 unchanged sentences
Further, the Company owns a two-thirds interest in Osprey Line, L.L.C., which transports project cargoes and cargo containers by barge.
−Removed: During the 2023 first quarter, the Company brought back into service a net five inland tank barges and chartered one tank barge, increasing its capacity by approximately 0.1 million barrels of capacity.
−Removed: KMT revenues for the 2023 first quarter increased 16% and operating income increased 154% compared to the 2022 first quarter.
−Removed: The increases for the 2023 first quarter were primarily due to higher term and spot pricing and increased tank barge utilization in the inland and coastal markets.
−Removed: Also, the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs.
+Added: During the 2023 first six months, the Company brought back into service 18 inland tank barges, purchased a newly constructed inland specialty tank barge, and retired 11 inland tank barges.
+Added: The net result was an increase of eight inland tank barges and approximately 0.2 million barrels of capacity during the 2023 first six months.
+Added: KMT revenues for the 2023 second quarter and first six months increased 5% and 10%, respectively, and operating income increased 108% and 125%, respectively, compared to the 2022 second quarter and first six months.
+Added: The increases for the 2023 second quarter and first six months were primarily due to higher term and spot pricing and increased tank barge utilization in the inland and coastal markets.
The 2023 and 2022 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, flooding on the Mississippi River, and various lock closures along the Gulf Intracoastal Waterway resulting in higher delay days.
−Removed: For the 2023 first quarter, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues.
−Removed: For the 2022 first quarter, the inland tank barge fleet contributed 78% and the coastal fleet contributed 22% of KMT revenues.
−Removed: Inland tank barge utilization levels averaged in the low to mid-90% range during the 2023 first quarter compared to the mid-80% range during the 2022 first quarter.
−Removed: The 2023 first quarter reflected increasing activity levels as a result of higher refinery and petrochemical plant utilization while the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges.
−Removed: Coastal tank barge utilization levels averaged in the mid to high-90% range during the 2023 first quarter compared to the low-90% range during the 2022 first quarter.
+Added: Also, the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs.
+Added: For both the 2023 second quarter and first six months, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues.
+Added: For both the 2022 second quarter and first six months, the inland tank barge fleet contributed 78% and the coastal fleet contributed 22% of KMT revenues.
+Added: Inland tank barge utilization levels averaged in the low to mid-90% range during the 2023 first quarter and the low 90% range during the 2023 second quarter compared to the mid-80% range during the 2022 first quarter and the low 90% range during the 2022 second quarter.
+Added: The 2023 first six months reflected increasing activity levels as a result of higher refinery and petrochemical plant utilization while the 2022 first six months were impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges.
+Added: Coastal tank barge utilization levels averaged in the mid to high-90% range during both the 2023 first and second quarters compared to the low-90% range during both the 2022 first and second quarters.
The increase in coastal tank barge utilization during 2023 was primarily due to continued improvements in market and customer demand.
−Removed: During the 2023 first quarter, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues.
−Removed: During the 2022 first quarter, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues.
−Removed: Inland time charters during the 2023 first quarter represented 60% of the inland revenues under term contracts compared with 58% in the 2022 first quarter.
−Removed: During the 2023 first quarter, approximately 75% of KMT coastal inland revenues were under term contracts and 25% were spot contracts, respectively.
−Removed: During the 2022 first quarter, approximately 80% of the coastal revenues were under term contracts and 20% were spot contract revenues.
−Removed: Coastal time charters represented approximately 90% of coastal revenues under term contracts during both the 2023 and 2022 first quarters.
+Added: During both the 2023 second quarter and first six months, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues.
+Added: During both the 2022 second quarter and first six months, approximately 60% of KMT inland revenues were under term contracts and 40% were spot contract revenues.
+Added: Inland time charters during the 2023 second quarter and first six months represented approximately 62% and 61%, respectively, of inland revenues under term contracts compared with 57% in both the 2022 second quarter and first six months.
+Added: During the 2023 second quarter and first six months, approximately 85% and 80%, respectively, of KMT coastal revenues were under term contracts.
+Added: During the 2023 second quarter and first six months, approximately 15% and 20%, respectively, of KMT coastal revenues were under spot contracts.
+Added: During both the 2022 second quarter and first six months, approximately 80% of the coastal revenues were under term contracts and 20% were spot contract revenues.
+Added: Coastal time charters represented approximately 90% of coastal revenues under term contracts during both the 2023 and 2022 second quarters and first six months.
Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.
2 unchanged sentences
March 31, 2023
+Added: June 30, 2023
Inland market:
6 unchanged sentences
Effective January 1, 2023, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts of approximately 9%, excluding fuel.
−Removed: KMT operating margin was 10.4% for the 2023 first quarter compared to 4.8% for the 2022 first quarter.
+Added: KMT operating margin was 15.0% and 12.8% for the 2023 second quarter and first six months, respectively, compared to 7.6% and 6.3% for the 2022 second quarter and first six months, respectively.
Distribution and Services
1 unchanged sentence
The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, manufactures and remanufactures oilfield service equipment, including pressure pumping units, and manufactures cementing and pumping equipment as well as coil tubing and well intervention equipment, electric power generation equipment, specialized electric distribution and control equipment, and high capacity energy storage/battery systems for oilfield service and railroad customers.
−Removed: For the 2023 first quarter, KDS generated 45% of the Company’s revenues, of which 77% were generated from service and parts and 23% from manufacturing.
+Added: For both the 2023 second quarter and first six months, KDS generated 45% of the Company’s revenues, of which 80% and 78%, respectively, were generated from service and parts and 20% and 22%, respectively, from manufacturing.
The results of KDS are largely influenced by the economic cycles of the oil and gas, marine, power generation, on-highway, and other related industrial markets.
−Removed: KDS revenues for the 2023 first quarter increased 32% and operating income increased 108% compared with the 2022 first quarter.
−Removed: In the commercial and industrial market, the increases for the 2023 first quarter were primarily attributable to strong economic activity across the United States which resulted in higher business levels in the marine and on-highway businesses.
−Removed: Increased product sales in Thermo King also contributed favorably to the 2023 first quarter results.
+Added: KDS revenues for the 2023 second quarter and first six months increased 20% and 26%, respectively, and operating income increased 78% and 90%, respectively, compared with the 2022 second quarter and first six months.
+Added: In the commercial and industrial market, the increases for the 2023 second quarter and first six months were primarily attributable to strong economic activity across the United States which resulted in higher business levels in the marine and on-highway businesses.
+Added: Increased product sales in Thermo King also contributed favorably to the 2023 second quarter and first six months results.
These increases were partially offset by continuing supply chain constraints and delays.
−Removed: For the 2023 first quarter, the commercial and industrial market contributed 56% of KDS revenues.
−Removed: In the oil and gas market, revenues and operating income improved compared to the 2022 first quarter due to higher oilfield activity which resulted in increased demand for new transmissions and parts in the distribution business.
−Removed: Although the manufacturing business was heavily impacted by supply chain delays, the business continued to experience increased orders and deliveries of new environmentally friendly pressure pumping equipment and power generation equipment for electric fracturing.
−Removed: For the 2023 first quarter, the oil and gas market contributed 44% of KDS revenues.
−Removed: KDS operating margin was 6.7% for the 2023 first quarter compared to 4.3% for the 2022 first quarter.
+Added: For the 2023 second quarter and first six months, the commercial and industrial market contributed 52% and 54%, respectively, of KDS revenues.
+Added: In the oil and gas market, revenues and operating income improved compared to the 2022 second quarter and first six months due to higher oilfield activity which resulted in increased demand for new transmissions and parts in the distribution business.
+Added: Although the manufacturing business was impacted by ongoing supply chain delays, the business continued to experience increased orders and deliveries of new environmentally friendly pressure pumping equipment and power generation equipment for electric fracturing.
+Added: For the 2023 second quarter and first six months, the oil and gas market contributed 48% and 46%, respectively, of KDS revenues.
+Added: KDS operating margin was 8.5% and 7.6%, respectively, for the 2023 second quarter and first six months compared to 5.7% and 5.1%, respectively, for the 2022 second quarter and first six months.
Refinery and petrochemical utilization levels remain at high levels.
This is favorable for the Company’s barge utilization, which is strong in both inland and coastal markets, and for pricing, which continues to increase.
−Removed: Although first quarter results were materially challenged by bad weather in KMT, the business exited the quarter in a solid position and improved results are anticipated through the remainder of 2023.
−Removed: Demand for the Company’s products and services continues to grow despite ongoing supply chain constraints and delays which could impact the Company’s product deliveries and defer completion of marine transportation repair and maintenance.
+Added: Demand for the Company’s products and services continues to grow despite ongoing supply chain constraints and delays which could impact the Company’s KDS product deliveries.
Overall, the Company expects both KMT and KDS to deliver improved financial results in the coming quarters.
The Company continues to closely monitor the ever-changing economic landscape related to the impact of higher interest rates, and possible recessionary headwinds as it continues to move through 2023.
−Removed: In the inland marine transportation market, conditions are expected to continue to remain favorable for the remainder of 2023 driven by continued strong barge utilization, continued growth in customer demand, steady volumes from refinery and petrochemical plants, and modest net new barge construction in the industry.
−Removed: As a result, the Company expects further improvements in the spot market, which currently represents approximately 45% of inland revenues.
−Removed: Term contracts are also expected to continue to reset higher to reflect improved market conditions for the duration of the year.
−Removed: In coastal marine, the Company expects modestly improved customer demand through the balance of the year with barge utilization in the low to mid-90% range.
−Removed: Rates are expected to continue to gradually improve, though meaningful gains remain challenged by underutilized barge capacity across the industry.
−Removed: Revenues and operating margins are also expected to be impacted by an approximate doubling of planned shipyard maintenance days with ballast water treatment installations on certain vessels.
+Added: In the inland marine transportation market, the Company anticipates continued gradual upward movement in pricing and margins in the second half of 2023 as steady demand and a limited availability of equipment is expected to keep the market tight.
+Added: As a result, the Company expects further pricing improvements in the spot market, which currently represents approximately 45% of inland revenues.
+Added: Term contracts are also expected to continue to reset higher to reflect improved market conditions.
+Added: These price increases are also critical in helping address the impact of persistent inflationary pressures in some areas of the Company’s business.
+Added: In coastal marine, revenues and operating margins are being impacted this year by an approximate doubling of planned shipyard maintenance days with ballast water treatment installations on certain vessels.
+Added: The Company expects modestly improved customer demand through the balance of the year with barge utilization in the low to mid-90% range.
+Added: Rates are expected to continue slowly improving as the industry is approaching supply and demand balance across the fleet.
KDS results are largely influenced by the cycles of the oil and gas, marine, power generation, on-highway and other related industrial markets.
−Removed: Favorable oilfield fundamentals and steady demand in commercial and industrial are expected to continue throughout 2023.
−Removed: In the oil and gas market, high commodity prices, stable rig counts, and growing well completions activity are expected to yield strong demand for OEM products, parts, and services in the distribution business.
−Removed: In manufacturing, the Company expects demand for environmentally friendly pressure pumping and power generation equipment for electric fracturing to remain strong, with new orders and increased deliveries of new equipment during the year.
+Added: Favorable oilfield fundamentals and steady demand in commercial and industrial are expected to continue throughout 2023 and into 2024.
+Added: In the oil and gas market, despite the near-term headwinds of lower commodity prices and flat to declining rig counts, the Company expects strong demand for manufacturing as well as for OEM products, parts, and services.
+Added: Within manufacturing, the Company expects demand for environmentally friendly pressure pumping and electric fracturing power generation equipment to remain strong, with new orders and increased deliveries of new equipment during the year.
Supply chain issues and long lead times are expected to persist in the near-term, contributing to some volatility as deliveries of new products shift between quarters and into 2024.
−Removed: In commercial and industrial, strong markets are expected to help drive full year revenue growth, with increased activity in power generation, marine repair, and on-highway.
+Added: In commercial and industrial, steady markets are expected to help drive full year revenue growth, with increased activity in power generation, marine repair, and on-highway.
+Added: On July 14, 2023, the Company purchased 23 inland tank barges with a total capacity of 265,000 barrels from an undisclosed seller for $37 million in cash.
+Added: The 23 tank barges transport petrochemicals and refined products on the Mississippi River System and the Gulf Intracoastal Waterway.
+Added: The average age of the 23 barges was 14 years.
+Added: Financing of the equipment acquisition was through borrowings under the Company’s revolving credit facility.
On March 31, 2022, the Company paid $3.9 million in cash to purchase assets of a gearbox repair company in KDS.
2 unchanged sentences
The following table sets forth the Company’s KMT and KDS revenues and the percentage of each to total revenues (dollars in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Marine transportation
2 unchanged sentences
The following table sets forth KMT revenues, costs and expenses, operating income, and operating margin (dollars in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Marine transportation revenues
8 unchanged sentences
The following table shows the marine transportation markets serviced by the Company, KMT revenue distribution, products moved and the drivers of the demand for the products the Company transports:
−Removed: 2023 First Quarter
+Added: 2023 Second Quarter
+Added: 2023 Six Months
Products Moved
13 unchanged sentences
Corn, Cotton and Wheat Production, Chemical Feedstock Usage
−Removed: KMT revenues for the 2023 first quarter increased 16% compared to the 2022 first quarter revenues.
−Removed: The increase for the 2023 first quarter was primarily due to higher term and spot pricing, increased tank barge utilization, and higher fuel rebills in the inland and coastal markets.
+Added: KMT revenues for the 2023 second quarter and first six months increased 5% and 10%, respectively, and operating income increased 108% and 125%, respectively, compared to the 2022 second quarter and first six months.
+Added: The increases for the 2023 second quarter and first six months were primarily due to higher term and spot pricing and increased tank barge utilization in the inland and coastal markets.
+Added: The 2023 and 2022 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, flooding on the Mississippi River, and various lock closures along the Gulf Intracoastal Waterway resulting in higher delay days.
Also, the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs.
−Removed: The 2023 and 2022 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast and lock delays on the Mississippi and Illinois rivers resulting in higher delay days.
−Removed: For the 2023 first quarter, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues.
−Removed: For the 2022 first quarter, the inland tank barge fleet contributed 78% and the coastal fleet contributed 22% of KMT revenues.
−Removed: Inland tank barge utilization levels averaged in the low to mid-90% range during the 2023 first quarter compared to the mid-80% range during the 2022 first quarter.
−Removed: The 2023 first quarter reflected increasing activity levels as a result of higher refinery and petrochemical plant utilization while the 2022 first quarter was impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges.
−Removed: Coastal tank barge utilization levels averaged in the mid to high-90% range during the 2023 first quarter compared to the low-90% range during the 2022 first quarter.
+Added: For both the 2023 second quarter and first six months,
+Added: the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues.
+Added: For both the 2022 second quarter and first six months, the inland tank barge fleet contributed 78% and the coastal fleet contributed 22% of KMT revenues.
+Added: Inland tank barge utilization levels averaged in the low to mid-90% range during the 2023 first quarter and the low 90% range during the 2023 second quarter compared to the mid-80% range during the 2022 first quarter and the low 90% range during the 2022 second quarter.
+Added: The 2023 first six months reflected increasing activity levels as a result of higher refinery and petrochemical plant utilization while the 2022 first six months were impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges.
+Added: Coastal tank barge utilization levels averaged in the mid to high-90% range during both the 2023 first and second quarters compared to the low-90% range during both the 2022 first and second quarters.
The increase in coastal tank barge utilization during 2023 was primarily due to continued improvements in market and customer demand.
−Removed: The petrochemical market, which is the Company’s largest market, contributed 50% of KMT revenues for the 2023 first quarter reflecting increased rates, volumes and utilization from Gulf Coast petrochemical plants as a result of improved economic conditions as compared to the 2022 first quarter.
−Removed: The black oil market, which contributed 26% of KMT revenues for the 2023 first quarter, reflected improved demand as refinery utilization and production levels of refined petroleum products and fuel oils increased.
−Removed: During the 2023 first quarter, the Company transported crude oil and natural gas condensate produced from the Permian Basin and the Eagle Ford shale formation in Texas, both along the Gulf Intracoastal Waterway with inland vessels and in the Gulf of Mexico with coastal equipment.
+Added: The petrochemical market, which is the Company’s largest market, contributed 51% of KMT revenues for both the 2023 second quarter and first six months, reflecting increased rates, volumes and utilization from Gulf Coast petrochemical plants as a result of improved economic conditions as compared to the 2022 first six months.
+Added: The black oil market, which contributed 26% of KMT revenues for both the 2023 second quarter and first six months, reflected improved demand as refinery utilization and production levels of refined petroleum products and fuel oils increased.
+Added: During the 2023 first six months, the Company transported crude oil and natural gas condensate produced from the Permian Basin and the Eagle Ford shale formation in Texas, both along the Gulf Intracoastal Waterway with inland vessels and in the Gulf of Mexico with coastal equipment.
Additionally, the Company transported volumes of Utica natural gas condensate downriver from the Mid-Atlantic to the Gulf Coast and Canadian and Bakken crude downriver from the Midwest to the Gulf Coast.
−Removed: The refined petroleum products market, which contributed 21% of KMT revenues for the 2023 first quarter, reflected increased volumes in the inland market with improved refinery utilization and product levels.
−Removed: The agricultural chemical market, which contributed 3% of KMT revenues for both the 2023 first quarter, reflected improved demand for transportation of both domestically produced and imported products.
−Removed: For the 2023 first quarter, the inland operations incurred 4,125 delay days, 31% more than the 3,137 delay days that occurred during the 2022 first quarter.
+Added: The refined petroleum products market, which contributed 20% of KMT revenues for both the 2023 second quarter and first six months, reflected increased volumes in the inland market with improved refinery utilization and product levels.
+Added: The agricultural chemical market, which contributed 3% of KMT revenues for both the 2023 second quarter and first six months, reflected improved demand for transportation of both domestically produced and imported products.
+Added: For the 2023 second quarter, inland operations incurred 2,317 delay days, 16% fewer than the 2,762 delay days that occurred during the 2022 second quarter.
+Added: For the 2023 first six months, inland operations incurred 6,442 delay days, 9% more than the 5,899 delays days that occurred during the 2022 first six months.
Delay days measure the lost time incurred by a tow (towboat and one or more tank barges) during transit when the tow is stopped due to weather, lock conditions, or other navigational factors.
Delay days reflected poor operating conditions due to heavy wind and fog along the Gulf Coast and lock delays on the Mississippi and Illinois rivers during the 2023 and 2022 first quarters.
−Removed: During the 2023 first quarter, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues.
−Removed: During the 2022 first quarter, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues.
−Removed: Inland time charters during the 2023 first quarter represented 60% of the inland revenues under term contracts compared with 58% in the 2022 first quarter, respectively.
−Removed: During the 2023 first quarter, approximately 75% of KMT coastal inland revenues were under term contracts and 25% were spot contracts.
−Removed: During the 2022 first quarter, approximately 80% of the coastal revenues were under term contracts and 20% were spot contract revenues.
−Removed: Coastal time charters represented approximately 90% of coastal revenues under term contracts during both the 2023 and 2022 first quarters.
+Added: During both the 2023 second quarter and first six months, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues.
+Added: During both the 2022 second quarter and first six months, approximately 60% of KMT inland revenues were under term contracts and 40% were spot contract revenues.
+Added: Inland time charters during the 2023 second quarter and first six months represented approximately 62% and 61%, respectively, of inland revenues under term contracts compared with 57% in both the 2022 second quarter and first six months.
+Added: During the 2023 second quarter and first six months, approximately 85% and 80%, respectively, of KMT coastal revenues were under term contracts.
+Added: During the 2023 second quarter and first six months, approximately 15% and 20%, respectively, of KMT coastal revenues were under spot contracts.
+Added: During both the 2022 second quarter and first six months, approximately 80% of the coastal revenues were under term contracts and 20% were spot contract revenues.
+Added: Coastal time charters represented approximately 90% of coastal revenues under term contracts during both the 2023 and 2022 second quarters and first six months.
Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.
2 unchanged sentences
March 31, 2023
+Added: June 30, 2023
Inland market:
7 unchanged sentences
Marine Transportation Costs and Expenses
−Removed: Costs and expenses for the 2023 first quarter increased 9%, respectively, compared to the 2022 first quarter.
−Removed: Costs of sales and operating expenses for the 2023 first quarter increased 11%, respectively, compared with the 2022 first quarter.
−Removed: The increases during the 2023 first quarter primarily reflect improved business activity levels, inflationary cost pressures and increased fuel costs.
+Added: Costs and expenses for the 2023 second quarter and first six months decreased 3% and increased 3%, respectively, compared to the 2022 second quarter and first six months.
+Added: Costs of sales and operating expenses for the 2023 second quarter and first six months decreased 6% and increased 2%, respectively, compared with the 2022 second quarter and first six months.
+Added: The decrease during the 2023 second quarter primarily reflected lower fuel costs, while the increase during the 2023 first six months primarily reflected improved business activity levels and inflationary cost pressures.
The 2022 first quarter was negatively impacted by incremental costs associated with the COVID-19 Omicron variant.
−Removed: The inland marine transportation fleet operated an average of 282 towboats during the 2023 first quarter, of which an average of 66 were chartered, compared to 263 during the 2022 first quarter, of which an average of 56 were chartered.
−Removed: The increase was primarily due to increasing business activity levels during the 2023 first quarter.
+Added: The inland marine transportation fleet operated an average of 281 towboats during the 2023 second quarter, of which an average of 66 were chartered, compared to 270 during the 2022 second quarter, of which an average of 59 were chartered.
+Added: The increase was primarily due to increasing business activity levels during the 2023 second quarter.
The Company charters in or releases chartered towboats in an effort to balance horsepower needs with current requirements, taking into account variability in demand or anticipated demand, addition or removal of tank barges from the fleet, chartered towboat availability, and weather or water conditions.
The Company has historically used chartered towboats for approximately one-fourth of its horsepower requirements.
−Removed: During the 2023 first quarter, the inland operations consumed 12.2 million gallons of diesel fuel compared to 11.5 million gallons consumed during the 2022 first quarter.
−Removed: The average price per gallon of diesel fuel consumed during the 2023 first quarter was $3.31 per gallon compared with $2.50 per gallon for the 2022 first quarter.
+Added: During the 2023 second quarter, inland operations consumed 12.2 million gallons of diesel fuel compared to 12.6 million gallons consumed during the 2022 second quarter.
+Added: The average price per gallon of diesel fuel consumed during the 2023 second quarter was $2.87 per gallon compared with $3.98 per gallon for the 2022 second quarter.
+Added: During the 2023 first six months, inland operations consumed 24.4 million gallons of diesel fuel compared to 24.2 million gallons consumed during the 2022 first six months.
+Added: The average price per gallon of diesel fuel consumed during the 2023 first six months was $3.09 per gallon compared with $3.27 per gallon for the 2022 first six months.
Fuel escalation and de-escalation clauses are typically included in term contracts and are designed to rebate fuel costs when prices decline and recover additional fuel costs when fuel prices rise;
1 unchanged sentence
Spot contracts do not have escalators for fuel.
−Removed: Selling, general and administrative expenses for the 2023 first quarter increased 8% compared to the 2022 first quarter due to higher business activity levels and inflationary cost pressures.
−Removed: The increase for the 2023 first quarter was also due to salary and wage increases which went into effect July 1, 2022.
+Added: Selling, general and administrative expenses for the 2023 second quarter and first six months increased 19% and 13%, respectively, compared to the 2022 second quarter and first six months due to higher business activity levels and inflationary cost pressures.
+Added: The increase for the 2023 second quarter and first six months was also due to salary and wage increases which went into effect July 1, 2022 and increased incentive compensation accruals.
Marine Transportation Operating Income and Operating Margin
−Removed: KMT operating income for the 2023 first quarter increased 154% compared with the 2022 first quarter.
−Removed: The 2023 first quarter operating margin was 10.4% compared with 4.8% for the 2022 first quarter.
−Removed: The increases in operating income and operating margin were primarily due to higher term and spot contract pricing and increased barge utilization in the inland and coastal markets, each as a result of improving business activity levels, partially offset by increasing fuel prices.
+Added: KMT operating income for the 2023 second quarter and first six months increased 108% and 125%, respectively, compared with the 2022 second quarter and first six months.
+Added: The 2023 second quarter operating margin was 15.0% compared with 7.6% for the 2022 second quarter.
+Added: The 2023 first six months operating margin was 12.8% compared with 6.3% for the 2022 first six months.
+Added: The increases in operating income and operating margin were primarily due to higher term and spot contract pricing and increased barge utilization in the inland and coastal markets, each as a result of improving business activity levels.
The 2022 first quarter was negatively impacted by the COVID-19 Omicron variant as increased cases among the Company’s mariners led to crewing challenges, lost revenue and increased operating costs.
1 unchanged sentence
The following table sets forth KDS revenues, costs and expenses, operating income, and operating margin (dollars in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Distribution and services revenues
9 unchanged sentences
Markets Serviced
−Removed: 2023 First Quarter
+Added: 2023 Second Quarter
+Added: 2023 Six Months
Commercial and Industrial
4 unchanged sentences
Oilfield Services, Oil and Gas Operators and Producers
−Removed: KDS revenues for the 2023 first quarter increased 32% compared to the 2022 first quarter.
−Removed: In the commercial and industrial market, the increase for the 2023 first quarter was primarily attributable to strong economic activity across the United States which resulted in higher business levels in the marine and on-highway businesses.
−Removed: Increased product sales in Thermo King also contributed favorably to the 2023 first quarter results.
+Added: KDS revenues for the 2023 second quarter and first six months increased 20% and 26%, respectively, compared to the 2022 second quarter and first six months.
+Added: In the commercial and industrial market, the increase for the 2023 second quarter and first six months was primarily attributable to strong economic activity across the United States which resulted in higher business levels in the marine and on-highway businesses.
+Added: Increased product sales in Thermo King also contributed favorably to the 2023 second quarter and first six months results.
These increases were partially offset by continuing supply chain constraints and delays.
−Removed: For the 2023 first quarter, the commercial and industrial market contributed 56% of KDS revenues.
−Removed: In the oil and gas market, revenues improved compared to the 2022 first quarter due to higher oilfield activity which resulted in increased demand for new transmissions and parts in the distribution business.
−Removed: Although the manufacturing business was heavily impacted by supply chain delays, the business continued to experience increased orders and deliveries of new environmentally friendly
−Removed: pressure pumping equipment and power generation equipment for electric fracturing.
−Removed: For the 2023 first quarter, the oil and gas market contributed 44% of KDS revenues.
+Added: For the 2023 second quarter and first six months, the commercial and industrial market contributed 52% and 54%, respectively, of KDS revenues.
+Added: In the oil and gas market, revenues improved compared to the 2022 second quarter and first six months due to higher oilfield activity which resulted in increased demand for new transmissions and parts in the distribution business.
+Added: Although the manufacturing business was impacted by ongoing supply chain delays, the business continued to experience increased orders and deliveries of new environmentally friendly pressure pumping equipment and power generation equipment for electric fracturing.
+Added: For the 2023 second quarter and first six months, the oil and gas market contributed 48% and 46%, respectively, of KDS revenues.
Distribution and Services Costs and Expenses
−Removed: Costs and expenses for the 2023 first quarter increased 29% compared with the 2022 first quarter.
−Removed: Costs of sales and operating expenses for the 2023 first quarter increased 32% compared with the 2022 first quarter, reflecting higher demand in the marine and on-highway businesses in commercial and industrial markets as well as increased demand in the oil and gas market as a result of higher oilfield activity levels.
−Removed: Selling, general and administrative expenses for the 2023 first quarter increased 17% compared to the 2022 first quarter, primarily due to continued inflationary cost pressures, higher business activity and annual compensation increases.
+Added: Costs and expenses for the 2023 second quarter and first six months increased 16% and 22%, respectively, compared with the 2022 second quarter and first six months.
+Added: Costs of sales and operating expenses for the 2023 second quarter and first six months increased 17% and 24%, respectively, compared with the 2022 second quarter and first six months, reflecting higher demand in the marine and on-highway businesses in commercial and industrial markets as well as increased demand in the oil and gas market as a result of higher oilfield activity levels.
+Added: Selling, general and administrative expenses for the 2023 second quarter and first six months increased 12% and 15%, respectively, compared to the 2022 second quarter and first six months, primarily due to continued inflationary cost pressures, higher business activity and annual compensation increases which went into effect July 1, 2022.
Distribution and Services Operating Income and Operating Margin
−Removed: KDS operating income for the 2023 first quarter increased 108% compared with the 2022 first quarter.
−Removed: The 2023 first quarter operating margin was 6.7% compared to 4.3% for the 2022 first quarter.
+Added: KDS operating income for the 2023 second quarter and first six months increased 78% and 90%, respectively, compared with the 2022 second quarter and first six months.
+Added: The 2023 second quarter operating margin was 8.5% compared to 5.7% for the 2022 second quarter.
+Added: The 2023 first six months operating margin was 7.6% compared to 5.1% for the 2022 first six months.
The results reflect increased business levels in both the commercial and industrial and oil and gas markets.
+Added: General Corporate Expenses
+Added: General corporate expenses for the 2023 second quarter and first six months increased compared to the 2022 second quarter and first six months primarily due to higher legal and insurance costs.
+Added: The 2023 first quarter also included costs related to strategic review and shareholder engagement.
Gain on Disposition of Assets
−Removed: The Company reported a net gain on disposition of assets of $2.2 million for the 2023 first quarter and $4.8 million for the 2022 first quarter.
+Added: The Company reported a net gain on disposition of assets of $0.5 million for the 2023 second quarter and $2.7 million for the 2022 second quarter.
+Added: The Company reported a net gain on disposition of assets of $2.7 million for the 2023 first six months and $7.6 million for the 2022 first six months.
The net gains were primarily from sales of marine transportation equipment.
Other Income and Expenses
−Removed: The following table sets forth impairments, other income, noncontrolling interests, and interest expense (dollars in thousands):
−Removed: Three Months Ended March 31,
+Added: The following table sets forth other income, noncontrolling interests, and interest expense (dollars in thousands):
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Noncontrolling interests
Interest expense
−Removed: Other income for the 2023 and 2022 first quarters include income of $1.2 million and $3.4 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans.
+Added: Other income for the 2023 and 2022 second quarters include income of $1.2 million and $3.5 million, respectively, and the 2023 and 2022 first six months includes income of $2.4 million and $6.9 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans.
The 2023 first quarter also includes interest income associated with the IRS refund.
1 unchanged sentence
The following table sets forth average debt and average interest rate (dollars in thousands):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Average interest rate
−Removed: Interest expense for the 2023 first quarter increased 30% compared with the 2022 first quarter, primarily due to a higher average interest rate and slightly higher average debt outstanding.
−Removed: There was no capitalized interest excluded from interest expense during the 2023 or 2022 first quarter.
+Added: Interest expense for the 2023 second quarter and first six months increased 15% and 22%, respectively, compared with the 2022 second quarter and first six months, primarily due to a higher average interest rate.
+Added: There was no capitalized interest excluded from interest expense during the 2023 or 2022 first six months.
Financial Condition, Capital Resources and Liquidity
13 unchanged sentences
Other long-term liabilities
−Removed: Current assets as of March 31, 2023 decreased 1% compared with December 31, 2022.
+Added: Current assets as of June 30, 2023 decreased 4% compared with December 31, 2022.
Trade accounts receivable increased 8%, primarily due to increased business activity levels in both KMT and KDS.
−Removed: Inventories increased by 3% due to higher activity and the impact of supply chain delays in KDS resulting in buildup for projects that will be delivered later in 2023.
+Added: Other receivables decreased 65% as the Company received its tax refund of $70.4 million plus accrued interest in April 2023.
+Added: Inventories increased by 9% due to higher activity and the impact of ongoing supply chain delays in KDS resulting in buildup for projects that will be delivered later in 2023 and into 2024.
Prepaid expenses and other current assets decreased 5% primarily due to amortization of insurance premiums and the sale of assets held for sale.
−Removed: Property and equipment, net of accumulated depreciation, at March 31, 2023 increased 1% compared with December 31, 2022.
+Added: Property and equipment, net of accumulated depreciation, at June 30, 2023 increased 2% compared with December 31, 2022.
The increase reflected $176.3 million of capital additions (including an increase in accrued capital expenditures of $5.1 million), partially offset by $99.1 million of depreciation expense and $12.8 million of property disposals more fully described under Cash Flows and Capital Expenditures below.
−Removed: Operating lease right-of-use assets as of March 31, 2023 increased 1% compared to December 31, 2022, primarily due to new leases acquired during the 2023 first quarter, partially offset by lease amortization expense.
−Removed: Other intangibles, net, as of March 31, 2023 decreased 4% compared with December 31, 2022, primarily due to amortization during the 2023 first quarter.
−Removed: Other assets as of March 31, 2023 increased 1% compared with December 31, 2022, primarily due to additional deferred major maintenance drydock expenditures incurred during the 2023 first quarter partially offset by amortization of drydock expenditures.
−Removed: Current liabilities as of March 31, 2023 decreased 4% compared with December 31, 2022.
−Removed: Accrued liabilities decreased 15% primarily due to the payment of employee incentive compensation bonuses, property taxes, and interest.
+Added: Other intangibles, net, as of June 30, 2023 decreased 8% compared with December 31, 2022, primarily due to amortization during the 2023 first six months.
+Added: Other assets as of June 30, 2023 increased 7% compared with December 31, 2022, primarily due to additional deferred major maintenance drydock expenditures incurred during the 2023 first six months partially offset by amortization of drydock expenditures.
+Added: Current liabilities as of June 30, 2023 increased 2% compared with December 31, 2022.
Deferred revenue increased 10% primarily due to deposits on equipment expected to be shipped later in 2023 in KDS.
Long-term debt, net –
−Removed: less current portion, as of March 31, 2023 was flat compared with December 31, 2022, primarily reflecting the maturity of the 3.29% senior notes due February 27, 2023, offset by borrowings under the 3.46% and 3.51% senior notes due January 19, 2033 and the 2027 Revolving Credit Facility.
−Removed: Deferred income taxes as of March 31, 2023 increased 2% compared with December 31, 2022, primarily reflecting the deferred tax provision of $12.6 million.
−Removed: Operating lease liabilities –
−Removed: less current portion, as of March 31, 2023 increased 3% compared to December 31, 2022, primarily due to new leases acquired and liability accretion during the 2023 first quarter.
−Removed: Other long-term liabilities as of March 31, 2023 decreased 38% compared with December 31, 2022, primarily due to a decrease in pension liabilities and amortization of intangible liabilities.
−Removed: Total equity as of March 31, 2023 increased 1% compared with December 31, 2022.
+Added: less current portion, as of June 30, 2023 decreased 8% compared with December 31, 2022, primarily reflecting the maturity of the 3.29% senior notes due February 27, 2023, offset by borrowings under the 3.46% and 3.51% senior notes due January 19, 2033 and the 2027 Revolving Credit Facility.
+Added: Deferred income taxes as of June 30, 2023 increased 5% compared with December 31, 2022, primarily reflecting the deferred tax provision of $30.2 million.
+Added: Other long-term liabilities as of June 30, 2023 decreased 33% compared with December 31, 2022, primarily due to a decrease in pension liabilities as a result of pension contributions of $7.7 million during the 2023 first six months and amortization of intangible liabilities.
+Added: Total equity as of June 30, 2023 increased 2% compared with December 31, 2022.
The increase was primarily due to the net earnings attributable to Kirby of $98.1 million, amortization of share-based compensation of $8.9 million, and stock option exercises of $0.1 million, partially offset by treasury stock purchases of $37.6 million and tax withholdings of $3.6 million on RSU vestings.
11 unchanged sentences
Unamortized debt discounts and issuance costs (b)
−Removed: (a) Variable interest rate of 6.3% at March 31, 2023.
+Added: (a) Variable interest rate of 6.6% at June 30, 2023.
(b) Excludes $1.8 million attributable to the 2027 Revolving Credit Facility included in other assets at December 31, 2022.
2 unchanged sentences
The 2024 Term Loan was prepayable, in whole or in part, without penalty.
−Removed: On July 29, 2022, the Company entered into a new credit agreement (the “2027 Credit Agreement”) with a group of commercial banks, with JPMorgan Chase Bank, N.A.
−Removed: as the administrative agent bank that allows for a $500 million unsecured revolving credit facility (the “2027 Revolving Credit Facility”) and a $250 million unsecured term loan (the “2027 Term Loan”) with a maturity date of July 29, 2027.
+Added: On July 29, 2022, the Company entered into the 2027 Credit Agreement with a group of commercial banks, with JPMorgan Chase Bank, N.A.
+Added: as the administrative agent bank that allows for a $500 million 2027 Revolving Credit Facility and a $250 million 2027 Term Loan with a maturity date of July 29, 2027.
The 2027 Credit Agreement replaced the 2024 Credit Agreement.
2 unchanged sentences
As a result, no repayments are required until June 30, 2025.
−Removed: Outstanding letters of credit under the 2027 Revolving Credit Facility were $5.1 million and available borrowing capacity was $382.9 million as of March 31, 2023.
+Added: Outstanding letters of credit under the 2027 Revolving Credit Facility were $0.1 million and available borrowing capacity was $472.9 million as of June 30, 2023.
The 2027 Term Loan is repayable in quarterly installments, with no repayments until June 30, 2025, in increasing percentages of the original principal amount of the loan, with the remaining unpaid balance of approximately $43.8 million payable upon maturity, assuming no prepayment.
The 2027 Term Loan is prepayable, in whole or in part, without penalty.
−Removed: The 2027 Credit Agreement provides for a variable interest rate based on the Secured Overnight Financing Rate (“SOFR”) or a base rate calculated with reference to the prime rate quoted by The Wall Street Journal, the Federal Reserve Bank of New York Rate plus 0.5%, or the adjusted SOFR rate for a one month interest period plus 1.0%, among other factors (the “Alternate Base Rate”).
+Added: The 2027 Credit Agreement provides for a variable interest rate based on the SOFR or a base rate calculated with reference to the prime rate quoted by The Wall Street Journal, the Federal Reserve Bank of New York Rate plus 0.5%, or the Alternate Base Rate.
The interest rate varies with the Company’s credit rating and is currently 137.5 basis points over SOFR or 37.5 basis points over the Alternate Base Rate.
4 unchanged sentences
The 2027 Revolving Credit Facility includes a $25 million commitment which may be used for standby letters of credit.
−Removed: On February 3, 2022, the Company entered into a note purchase agreement for the issuance of $300 million of unsecured senior notes with a group of institutional investors, consisting of $60 million of 3.46% series A notes (“Series A Notes”) and $240 million of 3.51% series B notes (“Series B Notes”), each due January 19, 2033 (collectively, the “2033 Notes”).
+Added: On February 3, 2022, the Company entered into a note purchase agreement for the 2033 Notes with a group of institutional investors, consisting of $60 million Series A Notes and $240 million Series B Notes, each due January 19, 2033.
The Series A Notes were issued on October 20, 2022, and the Series B Notes were issued on January 19, 2023.
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The 2033 Notes also specify certain events of default, upon the occurrence of which the maturity of the notes may be accelerated, including failure to pay principal and interest, violation of covenants or default on other indebtedness, among others.
−Removed: The 3.29% unsecured senior notes due February 27, 2023 (the “2023 Notes”) were repaid using a combination of the proceeds from the issuance of the 2033 Notes and availability under the 2027 Revolving Credit Facility.
−Removed: The Company has a $10 million line of credit (“Credit Line”) with Bank of America, N.A.
−Removed: (“Bank of America”) for short-term liquidity needs and letters of credit, with a maturity date of June 30, 2024.
−Removed: Outstanding letters of credit under the $10 million credit line were $0.6 million and available borrowing capacity was $9.4 million as of March 31, 2023.
−Removed: As of March 31, 2023, the Company was in compliance with all covenants under its debt instruments.
+Added: The 2023 Notes were repaid using a combination of the proceeds from the issuance of the 2033 Notes and availability under the 2027 Revolving Credit Facility.
+Added: The Company has a $10 million Credit Line with Bank of America for short-term liquidity needs and letters of credit, with a maturity date of June 30, 2024.
+Added: Outstanding letters of credit under the $10 million credit line were $3.6 million and available borrowing capacity was $6.4 million as of June 30, 2023.
+Added: As of June 30, 2023, the Company was in compliance with all covenants under its debt instruments.
For additional information about the Company’s debt instruments, see Note 5, Long-Term Debt, of the Notes to Condensed Financial Statements (Unaudited) as well as Note 5, Long-Term Debt, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Cash Flow and Capital Expenditures
−Removed: The Company generated positive operating cash flows during the 2023 first quarter with net cash provided by operating activities of $16.5 million compared with $32.2 million for the 2022 first quarter, a 49% decrease.
−Removed: Higher revenues and operating income in KMT and KDS during the 2023 first quarter were more than offset by an increase in trade accounts receivable, primarily due to higher revenues and timing of collections, and increased inventory levels in KDS due to higher activity and managing supply chain challenges during the 2023 first quarter.
−Removed: Increases in KMT revenues and operating income were driven by higher term and spot contract pricing and increased barge utilization in the inland and coastal markets during the 2023 first quarter.
−Removed: During the 2023 and 2022 first quarters, the Company generated cash of $8.0 million and $14.3 million, respectively, from proceeds from the disposition of assets, and $0.1 million and $2.3 million, respectively, from proceeds from the exercise of stock options.
−Removed: For the 2023 first quarter, cash generated was used for capital expenditures of $73.2 million, including $4.4 million for inland specialized equipment construction and $68.8 million primarily for upgrading existing marine equipment and KMT and KDS facilities.
+Added: The Company generated positive operating cash flows during the 2023 first six months with net cash provided by operating activities of $227.9 million compared with $95.6 million for the 2022 first six months, a 138% increase.
+Added: Higher revenues and operating income in KMT and KDS during the 2023 first six months and the receipt of the IRS refund of $70.4 million plus accrued interest in April 2023 more than offset an increase in trade accounts receivable, primarily due to higher revenues and timing of collections, and increased inventory levels in KDS due to higher activity and managing supply chain challenges during the 2023 first six months.
+Added: Increases in KMT revenues and operating income were driven by higher term and spot contract pricing and increased barge utilization in the inland and coastal markets during the 2023 first six months.
+Added: During the 2023 and 2022 second quarters and first six months, the Company generated cash of $20.5 million and $23.3 million, respectively, from proceeds from the disposition of assets, and $0.1 million and $3.9 million, respectively, from proceeds from the exercise of stock options.
+Added: For the 2023 first six months, cash generated was used for capital expenditures of $171.2 million, including $23.2 million for specialized inland equipment construction and $148.0 million primarily for upgrading existing marine equipment and KMT and KDS facilities.
Treasury Stock Purchases
−Removed: During the 2023 first quarter, the Company purchased 46,850 shares of its common stock for $3.2 million, at an average price of $67.97 per share.
−Removed: As of May 5, 2023, the Company had approximately 6.0 million shares available under its existing repurchase authorization.
−Removed: Historically, treasury stock purchases have been financed through operating cash flows and borrowings under the Company’s then current revolving credit facility.
+Added: During the 2023 first six months, the Company purchased 521,625 shares of its common stock for $37.6 million, at an average price of $72.08 per share.
+Added: Subsequent to June 30, 2023 and through August 4, 2023, the Company purchased an additional 60,326 shares of its common stock for $4.6 million, at an average price of $76.03 per share.
+Added: As of August 4, 2023, the Company had approximately 5.4 million shares available under its existing repurchase authorization.
+Added: Historically, treasury stock purchases have been financed through operating cash flows and borrowings under the Company’s revolving credit facility.
The Company is authorized to purchase its common stock on the New York Stock Exchange and in privately negotiated transactions.
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Funds generated from operations are available for acquisitions, capital expenditure projects, common stock repurchases, repayments of borrowings, and for other corporate and operating requirements.
−Removed: In addition to net cash flows provided by operating activities, as of May 5, 2023 the Company also had cash equivalents of $45.8 million, availability of $442.9 million under its 2027 Revolving Credit Facility, and $6.9 million available under its credit line.
+Added: In addition to net cash flows provided by operating activities, as of August 4, 2023 the Company also had cash and cash equivalents of $28.4 million, availability of $405.9 million under its 2027 Revolving Credit Facility, and $2.6 million available under its credit line.
Neither the Company, nor any of its subsidiaries, is obligated on any debt instrument, swap agreement, or any other financial instrument or commercial contract which has a rating trigger, except for the pricing grid on its 2027 Credit Agreement.
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The 4.2% senior unsecured notes do not mature until March 1, 2028 and require no prepayments.
−Removed: The 2033 Notes do not mature until January 19, 2033
−Removed: and require no prepayments.
+Added: The 2033 Notes do not mature until January 19, 2033 and require no prepayments.
The 2027 Term Loan in the amount of $250 million is subject to quarterly installments, beginning June 30, 2025, in increasing percentages of the original principal amount of the loan, with the remaining unpaid balance of approximately $43.8 million payable on July 29, 2027, assuming no prepayments.
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Risk Factors and Note 14, Contingencies and Commitments, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
−Removed: Amounts available under the Company’s existing financial arrangements are subject to the Company continuing to meet the covenants of the credit facilities as described in Note 5, Long-Term Debt, of the Notes to Condensed Financial Statements (Unaudited) as well as Note 5, Long-Term Debt, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: Amounts available under the Company’s existing financial arrangements are subject to the Company continuing to meet the covenants of the credit facilities as described in Note 5, Long-Term Debt, of the Notes
+Added: to Condensed Financial Statements (Unaudited) as well as Note 5, Long-Term Debt, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The Company has issued guaranties or obtained standby letters of credit and performance bonds supporting performance by the Company and its subsidiaries of contractual or contingent legal obligations of the Company and its subsidiaries incurred in the ordinary course of business.
−Removed: The aggregate notional value of these instruments is $18.1 million at March 31, 2023, including $11.3 million in letters of credit and $6.8 million in performance bonds.
+Added: The aggregate notional value of these instruments is $24.0 million at June 30, 2023, including $9.4 million in letters of credit and $14.6 million in performance bonds.
All of these instruments have an expiration date within two years.
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The Company’s spot contract rates generally reflect current fuel prices at the time the contract is signed but do not have escalators for fuel.
−Removed: While inflationary pressures have increased, the Company has certain mechanisms designed to help mitigate the impacts of rising costs.
+Added: The Company has certain mechanisms designed to help mitigate the impacts of rising costs.
For example, KMT has long-term contracts which generally contain cost escalation clauses whereby certain costs, including fuel as noted above, can be largely passed through to its customers.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.