Kirby(KEX) - 2022 Q1 - Quarterly Report

Financial Performance - Total revenues for Q1 2022 were $610.8 million, a 23% increase from $496.9 million in Q1 2021[54] - Net earnings attributable to Kirby for Q1 2022 were $17.4 million, compared to a net loss of $3.4 million in Q1 2021, resulting in diluted earnings per share of $0.29[54] - KMT generated 58% of total revenues in Q1 2022, with revenues increasing by 18% and operating income rising by 773% compared to Q1 2021[61] - KDS accounted for 42% of total revenues in Q1 2022, with revenues increasing by 30% and operating income increasing by 277% compared to Q1 2021[69] - Operating income for Q1 2022 surged 773% to $16.9 million, with an operating margin of 4.8%, up from 0.6% in Q1 2021[94] - Distribution and services revenues for Q1 2022 rose 30% to $255.2 million compared to $195.9 million in Q1 2021[95] - KDS operating income for Q1 2022 increased 277% to $11.0 million, with an operating margin of 4.3%, up from 1.5% in Q1 2021[102] - Other income for Q1 2022 was $4.3 million, a 14% increase from $3.8 million in Q1 2021[104] - The company reported a net gain on disposition of assets of $4.8 million for Q1 2022, up from $2.1 million in Q1 2021[103] Operational Metrics - Inland tank barge utilization averaged in the mid-80% range in Q1 2022, up from the mid-70% range in Q1 2021[62] - Coastal tank barge utilization levels averaged in the low 90% range in Q1 2022, up from mid-70% in Q1 2021, due to retirement of underutilized barges[80] - Marine transportation revenues for Q1 2022 increased by 18% to $355.5 million compared to $301.0 million in Q1 2021[77] - The inland operations consumed 11.5 million gallons of diesel fuel in Q1 2022, with an average price of $2.50 per gallon, compared to $1.65 per gallon in Q1 2021[91] - The agricultural chemical market contributed 4% of KMT revenues for Q1 2022, reflecting improved demand due to better economic conditions[84] Capital Expenditures and Debt - Capital expenditures for 2022 are projected to be between $170 million and $190 million, with $145 million to $155 million allocated for maintenance and improvements[55] - Capital expenditures for Q1 2022 totaled $35.1 million, including $33.8 million for upgrading existing marine equipment[120] - The company had $844.9 million available under its Revolving Credit Facility as of March 31, 2022[125] - The Company entered into a note purchase agreement for $300 million of 2033 Notes, with no principal payments required until maturity[117] - Average debt as of March 31, 2022, was $1.42 billion, up from $1.18 billion in the previous year, with an average interest rate of 3.5% compared to 3.1%[106] - Long-term debt decreased by 1% to $1.15 billion, reflecting repayments of $10 million under the Term Loan[113] - Current liabilities decreased by 6% to $513.8 million, with accounts payable increasing by 10% due to higher activity levels[112] - Current assets increased by 1% to $1.02 billion as of March 31, 2022, while inventories rose by 9% due to supply chain delays[108] - Total equity increased by 1% to $2.91 billion, driven by net earnings of $17.4 million and stock option exercises of $2.3 million[115] Cost and Inflation Management - Costs of sales and operating expenses for Q1 2022 increased by 19% to $254.4 million, driven by improved business activity and higher fuel costs[89] - KMT's term contracts typically include fuel escalation clauses, allowing the company to recover changes in fuel costs over the long term[128] - Inflationary pressures have increased, but KMT has mechanisms to mitigate rising costs, including long-term contracts with cost escalation clauses[130] - Fuel price volatility and specific contract terms can affect the short-term effectiveness of fuel escalation clauses[128] - A 1% increase in variable interest rates would impact the 2022 interest expense by $3.2 million based on outstanding balances as of December 31, 2021[131] - The fair value of the company's debt would change by approximately 3% with a 1% increase in interest rates[131] - Spot contract rates reflect current fuel prices but do not include escalators for fuel, exposing the company to market volatility[130] - KDS secures the cost of major components for large manufacturing orders at the time of customer order finalization, limiting inflation exposure[130] - The repair portion of KDS is based on prevailing current market rates, which may fluctuate[130] - KMT's contracts generally have a 30 to 90 day delay before adjustments are made based on fuel price changes[128]