Tank barge giant Kirby Corporation (NYSE: KEX) today reported results for the quarter ended September 30, 2021, that included a net loss of $264.7 million, or $4.41 per share, compared with earnings of $27.5 million or $0.46 per share for the 2020 third quarter.
David Grzebinski, Kirby’s president and CEO, commented, “Kirby’s third quarter results were impacted by a one-time noncash impairment charge related to our exit from Hawaii and the restructuring of our coastal marine business. Our adjusted earnings were similar to the second quarter but were improved when excluding the significant impact of Hurricane Ida. Looking forward, we continue to see underlying market improvement in all our core businesses and remain very optimistic about the outlook for Kirby.”
Kirby’s decision to get out of Hawaii was signaled in a WARN notice filed with the Hawaii Department of Labor and Industrial Relations on October 8 in which the company said it would be closing the Kirby Offshore Marine LLC operations in Hawaii and that employees were receiving 60 days notice of the closing with 72 being laid off.
Today, Grzebinski said “during the quarter, we decided to exit Hawaii and the coastal wire tank barge market, incurring a one-time non-cash impairment charge. This decision focuses our coastal business on attractive markets, eliminates significant future capital outlays, and removes our exposure to marketing coastal wire assets with poor market acceptance. Through these actions, we expect our coastal business will improve its performance in 2022 and is now positioned for long-term success”
Kirby reported that it completed the sale of its Hawaii marine transportation assets including four coastal tank barges and seven coastal tugboats for cash proceeds of $17.2 million. In addition, the company retired 12 coastal wire tank barges and four coastal tugboats which had limited customer acceptance in today’s market. These events resulted in a non-cash impairment charge of $121.7 million.
Commenting on the 2021 fourth quarter outlook, Grzebinski said, “Overall, we expect our fourth quarter earnings to sequentially improve. In marine transportation, with some major refinery and chemical customers only recently resuming operations post-Hurricane Ida, and portions of the Gulf Intracoastal Waterway still closed, some of the impacts from the storm have carried into the fourth quarter. Despite these headwinds, we have seen steady improvement in volumes and inland barge utilization during October which we expect will contribute to improved marine transportation revenue and operating income in the fourth quarter.”