Kirby CEO says ‘off to a solid start’ in 2024

Commenting on the outlook for the remainder of 2024, Mr. Grzebinski said, “We are off to a solid start in 2024 and have a favorable outlook for the remainder of the year. Our balance sheet is strong, and we expect to generate significant free cash flow despite high levels of capex this year and expect to use the majority of free cash flow for share repurchases. We see favorable markets continuing and expect our businesses will produce improving financial results as we move through this year.” In inland marine, our 2024 outlook anticipates positive market dynamics with steady customer demand and limited new barge construction in the industry. In addition to this, many industry units are scheduled for maintenance. With these favorable market conditions, we expect our barge utilization rates to be in the low to mid-90% range throughout the year. To support our ability to meet customer demand, we have recently entered into an agreement to acquire 13 barges, including three specialty barges, and two high horsepower boats from an undisclosed seller. Overall, inland revenues are expected to grow in the mid to high single digit range on a full year basis. However, a potential recession with a drop in demand could impact expected growth. The Company expects operating margins to gradually improve during the year and average around 20% for the full year. In coastal marine, strong customer demand is expected throughout the year with barge utilization in the low to mid-90% range. With major shipyards and ballast water treatment installations concluding in the first half of the year, revenues for the full year are expected to increase in the high single to low double digits range compared to 2023. Coastal operating margins are expected to be in the high single to low double-digit range on a full year basis. In the distribution and services segment, despite the uncertainty from volatile commodity prices, we expect incremental demand for products, parts, and services in the segment. In commercial and industrial, the demand outlook in marine repair is strong while on highway is somewhat weak with the exception of refrigeration products and services. In power generation we anticipate continued strong growth as data center demand and the need for backup power is very strong. In oil and gas, activity levels are lower but seem to be bottoming. Our manufacturing backlog does provide stable levels of activity through most of 2024. We do anticipate extended lead times for certain OEM products to continue contributing to a volatile delivery schedule of new products in 2024 and into 2025. Overall, the Company expects segment revenues to be flat to slightly down on a full year basis with operating margins in the mid to high-single digits but slightly lower year-over-year due to mix. Kirby expects to generate net cash provided from operating activities of $600 million to $700 million in 2024 and capital spending is expected to range between $290 million to $330 million. Approximately $190 million to $240 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment, including the remaining ballast water treatment systems on some coastal vessels, and facility improvements. Approximately $90 million is associated with growth capital spending in both our businesses.