Kirby Corporation reported net earnings for the first quarter ended March 31, 2002 of $8,808,000, or $.36 per share, compared with $6,755,000, or $.28 per share, for the 2001 first quarter. The 2001 first quarter included $1,565,000, or $.07 per share, of goodwill amortization expense. In 2002, Kirby ceased the amortization of goodwill under SFAS No. 142. Revenues for the 2002 first quarter decreased to $131,437,000 from $133,128,000 in the first quarter of 2001. EBITDA per share for the 2002 first quarter was $1.19, the same as the 2001 first quarter.
Joe Pyne, Kirby's President and CEO, said, "Kirby achieved record first quarter results despite
a sluggish economy and weak petrochemical volumes. Approximately 60% of what Kirby transports are petrochemicals. We have seen petrochemical volumes decline 10 to 12% since their highs in the second quarter of 2000. Our Midwest refined products volumes began the quarter strong but declined during the quarter and remain soft. A new pipeline from the Gulf Coast to the Midwest also began to negatively impact refined products volumes. Liquid fertilizer volumes were lower than normal, primarily the result of high Midwest fertilizer inventory levels."
The marine transportation segment reported an operating margin of 14.6% for the 2002 first quarter. This compares with the 2001 first quarter reported operating margin of 14.1%, or 15.3% when adjusted for goodwill amortization expense. The low margins for both comparable quarters reflect the continued softness of Kirby's core petrochemical market, diminished refined product volumes, as well as the negative impact of winter weather and water conditions.
The diesel engine services segment reported an operating margin of 10.6% for the 2002 first quarter compared with 10.5% reported for the first quarter last
year. Adjusted for goodwill amortization expense, the 2001 first quarter's operating margin was 11.1%. The segment reported a strong nuclear market and East Coast marine market. The nuclear component of the diesel business repairs and sells parts for diesel engines used as auxiliary power units in nuclear power plants
. A July 2001 agreement to distribute replacement parts for locomotive engines used by U.S. transit and Class II railroads also positively impacted the 2002 first quarter. The segment's Gulf Coast division was impacted by softness in the oil service market.
In March 2002, Kirby acquired 21 inland tank barges from Cargo Carriers, a division of Cargill
, and resold five of the barges to a third party for a net purchase price of $2.4 million in cash.
Mr. Pyne further commented, "In January 2002, we announced a guidance range for the 2002 year of $1.92 to $2.02 per share, compared with net earnings per share of $1.63 for 2001, which included $.26 per share of goodwill amortization expense. We currently have little visibility concerning the second half of the year. We do know that inventories of petrochemicals are very low. We do not know when the much anticipated replenishment of such inventories will begin. We continue to receive mixed views from industry analysts regarding the recovery of the petrochemical industry and the U.S. economy. For Kirby to meet its 2002 earnings guidance, petrochemical volumes will need to improve."