Kirby Corp (KEX)

Kirby Corporation operates as the nation's largest domestic tank barge operator, transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, and coastwise along all three United States coasts. The United States inland waterway system extends approximately 26,000 miles, with 12,000 miles considered significant for domestic commerce through 38 states and 635 shallow draft ports. The inland tank barge industry consists of approximately 25 large integrated transportation companies and small operators, as well as captive fleets owned by refining and petrochemical companies. The number of industry tank barges has remained relatively constant from 2019 through the end of 2025, with an estimated 4,004 inland tank barges in the United States. The coastal tank barge industry in the 195,000 barrels or less category is composed of approximately 20 large integrated transportation companies and small operators, with approximately 260 coastal tank barges operating in that category. Based on cost, safety, and level of emissions, barge transportation is often the most efficient and safest means of surface transportation of bulk commodities when compared to railroads and trucks, with transport by rail and tractor-trailer tank trucks emitting approximately 40% and 800%, respectively, more CO2 per ton mile of cargo transported than by inland tank barge.

The tank barge industry is very competitive, with competition based on price and reliability, and customers emphasizing enhanced vetting requirements, an increased emphasis on safety, the environment, and high-quality service. The Company is the largest inland tank barge carrier, both in terms of number of barges and total fleet barrel capacity. The Company's 1,105 inland tank barges represent approximately 28% of the industry's approximately 4,004 inland tank barges. In the coastal markets, the Company operates 28 coastal tank barges, or approximately 11% of the approximately 260 coastal tank barges in the 195,000 barrels or less category. The Company's primary competitors are noncaptive inland tank barge operators and coastal operators, and it also competes with companies who operate refined product and petrochemical pipelines, railroad tank cars, and tractor-trailer tank trucks. The Company believes that both inland and coastal marine transportation of bulk liquid products enjoy a substantial cost advantage over railroad and truck transportation on a barrel per mile basis.

The Company generates revenue through two reportable business segments: marine transportation and distribution and services. Through KMT, the Company provides marine transportation services, operating tank barges and towing vessels transporting bulk liquid products, and in almost all cases does not assume ownership of the products it transports. Through KDS, the Company provides equipment, after-market parts and services for power generation systems, after-market and genuine replacement parts and services for engines, transmissions, reduction gears, electric motors, drives, and controls, specialized electrical distribution and controls systems, and related equipment used in power generation, marine, on-highway, oilfield services, and other industrial applications. The Company also rents equipment including generators, industrial compressors, high-capacity lift trucks, construction equipment and refrigeration trailers, and manufactures and remanufactures specialized equipment including pressure pumping units and electric fracturing systems, electric power generation equipment, and specialized electrical distribution and control equipment for data centers, oilfield service, railroad and other industrial customers. For 2025, 58% of the Company's revenues were generated by KMT and 42% by KDS.

KMT operates a fleet of 1,105 inland tank barges with 24.5 million barrels of capacity, and an average of 266 inland towboats during the fourth quarter of 2025, as well as 28 coastal tank barges with 2.9 million barrels of capacity, 24 coastal tugboats, four offshore dry-bulk cargo barges, three offshore tugboats and one docking tugboat. The inland tank barge fleet consists of 1,073 owned and 32 leased barges, and the 266 inland towboats range from 800 to 6,100 horsepower, with 200 owned and 66 chartered. The coastal fleet consists of 28 owned tank barges and 24 coastal tugboats ranging from 3,000 to 11,000 horsepower, of which 23 are owned and one is chartered. The Company also owns a two-thirds interest in Osprey Line, L.L.C., a transporter of project cargoes and cargo containers by barge on the United States inland waterway system. During 2025, the Company's inland marine transportation operation moved over 55 million tons of liquid cargo on the United States inland waterway system. The transportation of petrochemical products represented 48% of the segment's 2025 revenues, black oil represented 26%, refined petroleum products represented 23%, and agricultural chemicals represented 3%.

KDS serves three markets: commercial and industrial, power generation, and oil and gas, through a network of 62 branch locations across 16 states and Colombia, South America. For 2025, KDS generated 42% of the Company's revenues, of which 83% was generated from service and parts and 17% from manufacturing. The commercial and industrial operations represented approximately 46% of the segment's 2025 revenues, the power generation operations represented approximately 43%, and the oil and gas operations represented approximately 11%. Products made up approximately 20% of KDS's revenues in 2025. The Company is the largest on-highway distributor for Allison Transmission and Detroit Diesel/Daimler Truck North America, providing parts, service and warranty on engines, transmissions and related equipment in Arkansas, Colorado, Florida, Louisiana, New Mexico, New York, Oklahoma, Texas, Wyoming, and the country of Colombia. The Company is also the exclusive worldwide distributor of EMD products to the nuclear industry, the worldwide distributor for Woodward, Inc. products to the nuclear industry, the worldwide distributor of Cooper Machinery Services products to the nuclear industry and owns the assets and technology necessary to support the Nordberg medium-speed diesel engines used in nuclear applications.

On October 14, 2025, the Company purchased certain assets from an undisclosed seller in support of the KDS segment for $9.3 million ¹ in cash, consisting of inventory and an authorized distributorship for EMD Power Products for certain geographic regions including Mexico, Central America, the northern part of South America and the Caribbean islands. On August 7, 2025, the Company purchased two inland tank barges and one towboat from an undisclosed seller for $9.2 million ² in cash. On March 27, 2025, the Company purchased 14 inland tank barges with a total capacity of 364,000 barrels, including four specialty barges, and four high horsepower towboats from an undisclosed seller for $97.3 million ³ in cash. During 2025, the Company purchased 3.7 million shares of its common stock for $354.2 million ⁴, at an average price of $96.27 per share. On September 8, 2025, the Board approved an eight million share increase in the Company's purchase authorization. Subsequent to December 31, 2025 and through February 13, 2026, the Company purchased an additional 0.2 million shares of its common stock for $28.5 million ⁵, at an average price of $120.22 per share.

Total revenues for 2025 were $3,364,050,000 ⁶ compared to $3,265,876,000 ⁷ in 2024 and $3,091,640,000 ⁸ in 2023. Net earnings attributable to Kirby for 2025 were $354,569,000 ⁹ compared to $286,707,000 ¹⁰ in 2024 and $222,935,000 ¹¹ in 2023. Diluted earnings per share attributable to Kirby common stockholders for 2025 were $6.33 ¹² compared to $4.91 ¹³ in 2024 and $3.72 ¹⁴ in 2023. Net cash provided by operating activities for 2025 was $670,204,000 ¹⁵ compared to $756,494,000 ¹⁶ in 2024 and $540,228,000 ¹⁷ in 2023. Capital expenditures for 2025 were $264,473,000 ¹⁸ compared to $342,660,000 ¹⁹ in 2024 and $401,730,000 ²⁰ in 2023. The 2024 fourth quarter included a $56.3 million ²¹ before taxes, $43.0 million ²² after taxes, or $0.74 ²³ per share non-cash impairment charge in the KDS segment primarily associated with conventional diesel fracturing equipment inventory. The Company's debt-to-capitalization ratio increased to 21.4% ²⁴ at December 31, 2025 from 20.7% ²⁵ at December 31, 2024.

The Company projects net cash flow from operations in 2026 of between $575 million ²⁶ and $675 million ²⁷ and expects capital expenditures to range between $220 million ²⁸ and $260 million ²⁹.

In KMT, the inland marine transportation market is expected to experience positive market dynamics due to limited new barge construction, with barge utilization rates expected to remain steady for the year with continued improvement in pricing as the year progresses. The coastal marine transportation market is also expected to see very favorable market conditions in 2026, with steady customer demand keeping barge utilization at high levels with improving rates as the availability of equipment remains limited across the industry, and there are no coastal barges currently under construction. The Company does expect more shipyard days in the coastal marine transportation market as compared to 2025.

In KDS, the Company expects stable growth in 2026 as near-term volatility from supply issues, customers deferring maintenance, and lower overall levels of activity in the oil and gas market are offset by increased orders in the power generation market. In power generation, the Company anticipates continued strong growth in orders as data center demand and the need for backup power continues to be strong. In oil and gas, the Company expects revenues to be down as the transition from conventional diesel hydraulic fracturing to electric hydraulic fracturing continues to take place. In commercial and industrial, the demand outlook in marine repair remains steady while on-highway service and repair remains soft but has shown some recent modest improvement.

The Company continues to see inflationary pressures and there remains an acute mariner shortage in the industry which continues to drive up labor costs. These pressures, along with the increasing cost of equipment, should continue to put upward pressure on spot and term contract prices. The Company anticipates extended lead times and supply delays for certain original equipment manufacturer products to continue throughout 2026.

The Company expects to make additional pension contributions of $1.2 million ³⁰ in 2026.

The Company projects net cash flow from operations in 2026 of between $575 million ³¹ and $675 million ³² and expects capital expenditures to range between $220 million ³³ and $260 million ³⁴.

The Company remains mindful of the ever-changing economic landscape related to the possible impact of high interest rates, tariffs, and possible recessionary headwinds as it moves through 2026.

The Company expects that its shipyard vendors, including San Jac, should be able to similarly manage their operations if an event of a similar impact were to occur in the future, but there is no guarantee that the vendors would be able to do so.

Management's overall tone is cautiously optimistic, expecting to deliver improved financial results in 2026. The Company projects net cash flow from operations in 2026 of between $575 million ³⁵ and $675 million ³⁶ and expects capital expenditures to range between $220 million ³⁷ and $260 million ³⁸. Key strategic priorities emphasized for the period ahead include: in KMT, capitalizing on positive market dynamics from limited new barge construction and steady customer demand to improve pricing and utilization; in KDS, driving stable growth by offsetting softness in oil and gas markets and the continuing trucking recession with growth in the power generation market from data center demand and backup power needs; and maintaining a disciplined capital allocation approach with a focus on managing inflationary pressures, the acute mariner shortage, and the potential impacts of high interest rates, tariffs, and recessionary headwinds.

Total revenues for 2025 were $3,364,050,000 ³⁹ compared to $3,265,876,000 ⁴⁰ in 2024. Net earnings attributable to Kirby for 2025 were $354,569,000 ⁴¹ compared to $286,707,000 ⁴² in 2024. Diluted earnings per share attributable to Kirby common stockholders for 2025 were $6.33 ⁴³ compared to $4.91 ⁴⁴ in 2024. Operating income for 2025 was $496,284,000 ⁴⁵ compared to $399,097,000 ⁴⁶ in 2024. Net cash provided by operating activities for 2025 was $670,204,000 ⁴⁷ compared to $756,494,000 ⁴⁸ in 2024. Capital expenditures for 2025 were $264,473,000 ⁴⁹ compared to $342,660,000 ⁵⁰ in 2024. The Company's debt-to-capitalization ratio increased to 21.4% ⁵¹ at December 31, 2025 from 20.7% ⁵² at December 31, 2024. The 2024 fourth quarter included a $56.3 million ⁵³ before taxes, $43.0 million ⁵⁴ after taxes, or $0.74 ⁵⁵ per share non-cash impairment charge in the KDS segment primarily associated with conventional diesel fracturing equipment inventory, and a $10.9 million ⁵⁶ one-time deferred tax credit related to a change in Louisiana tax law. KMT operating income for 2025 was $374,458,000 ⁵⁷ compared to $363,376,000 ⁵⁸ in 2024, with operating margins of 19.3% ⁵⁹ compared to 19.0% ⁶⁰ in 2024. KDS operating income for 2025 was $130,752,000 ⁶¹ compared to $108,602,000 ⁶² in 2024, with operating margins of 9.2% ⁶³ compared to 8.0% ⁶⁴ in 2024.

The Company faces material risks from the aging United States inland waterway infrastructure, with more than half of the locks over 50 years old, which could result in increased costs and disruptions to KMT. A marine accident or spill event could close a portion of the inland waterway system or a coastal area for an extended period, and the Company may not be fully insured for such events. KMT is dependent on its ability to adequately crew its towing vessels, with approximately 2,337 vessel crew members and an acute mariner shortage in the industry creating competitive labor pressure. The Company is subject to the Jones Act, and the loss of Jones Act status could have a significant negative effect, while waivers of the Jones Act could result in increased competition from foreign tank vessel operators. For 2025, 48% of KMT's revenues were from the movement of petrochemicals, and the Company is subject to the volatility of natural gas and crude oil prices, which can impact production volumes and demand for tank barge transportation services. The Company estimates that at the end of 2025, approximately 170 to 180 inland tank barges were transporting crude and natural gas condensate, down from approximately 550 at the beginning of 2015.