KEX Kirby

Eric Holcomb VP, IR
David Grzebinski President, CEO & Director
William Harvey EVP & CFO
Jack Atkins Stephens Inc.
Kenneth Hoexter Bank of America Merrill Lynch
Jonathan Chappell Evercore ISI
Randall Giveans Jefferies
Benjamin Nolan Stifel, Nicolaus & Company
Gregory Lewis BTIG
William Baldwin Baldwin Anthony Securities
Call transcript
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Thank you for standing by, and welcome to the Kirby Corporation 2021 Second Quarter Earnings Conference Call. [Operator Instructions]. Today's program maybe recorded. I would now like to introduce your host for today's program, Eric Holcomb, Vice President of Investor Relations. Please go ahead, sir.

Eric Holcomb

you us. thank and morning, for joining Good With Chief Kirby's Executive are David Executive President and Grzebinski, Kirby's Officer; Officer. President Chief me and today Vice Financial and Bill Harvey, as slide well was A earlier be website can on today today's for conference issued as earnings release, presentation the which our at found call

in the financial of the included non-GAAP this we refer earnings may measures Reconciliations During our comparable to certain financial measures Relations and measures. available to most under release conference call, non-GAAP directly GAAP or in Financials. are adjusted our on press financial section the are also Investor website

As forward-looking to a with are statements. call These conference statements future events. reasonable contained reminder, respect in reflect this with future respect to the management's statements judgment

and and the list risks the and for actual conditions business. of related found December year Kirby's over from of involve differ Form David. now materially the a uncertainties, to pandemic of anticipated can including governments various factors call XX, regional be ended global factors, statements turn and COVID-XX could the these and those the the results as I XX-K risk will result on response on of our impact market company's XXXX. Forward-looking A

David Grzebinski

marine a material revenues and to economy increase of distribution refining services, and results a oilfield total improvement complex Eric, in were U.S. activity across Gulf morning, spending $X.XX increased you, ramped improved and XXXX recovered the good and and we quarter. in the up. earnings and today, activity both continued our and to levels in XX% earnings. quarter's The Uri Thank led Storm Overall, segments Coast significantly which per sequential everyone. from the announced Winter net transportation Earlier second share for rebound, both petrochemical as

up February quarter started segments, to a softness utilization with barge improvement The at down the mid-XX% struggled petrochemical demand winter increasing the May, was for plants products low into the XXs however, production storm, transportation, Coast the in to experienced resumed the market utilization to as for strong and U.S. which many refinery the period reopen. marine inland as with range. Looking our by shut following of early in But in demand petrochemical high overall was some steadily XX% of restart of complex production, the firmly time. had Gulf most a increasing economy refined

a Pipeline mid-May result, our barge inland near the ramp As moved a transportation days, shut in and storage. Colonial XX%. to In off up increased utilization The activity barge barges matter when of and to bottom. the down, many started and in our for further tightened barge pricing the turned of markets nicely to market customers

favorable While business the a this event temporary, overall June, experienced in in activity dynamics. inland market moderated was levels and shift

recovered ton result, XX% improved margins Overall, spot a few also is year, utilization more compared sequentially the In and increased last sequentially market for increased barge single coastal, term even than first for a inland in still spot to As to and although first - year, pricing when the market miles quarter. down time the continued relative requirements. largely inland with were fundamentals pressure and operating quarter and the into contract revenues moderated. unchanged pricing high low XX% digits. second Average

incremental favorably customers year-on-year businesses, operating came orders significant our and levels. equipment XXXX. pressure improved oil services, higher sequential new experienced the increases contributed experienced and we pumping increases However, and quarter's generation revenues and in margin demand In activity U.S. overall of moved as increased levels frac seen deliveries our not power spending most the frac-related third results. increased manufacturing, quarter. distribution equipment and strong rig and gas during environmentally-friendly positive which The and pricing from remained activity counts levels, their to stable In and the quarter with continued since second of momentum

increase quarter for a parts were during the repair turning our Marine down was partially related large In also our resulted improved for the from the Kirby continued with sequential point in offset the commercial and service also power businesses. commercial both and to quarter. demand business financial Thermo also segments of on-highway strong oilfield These the new and experienced power economic experienced performance. by sequentially sales In lower was and quarter. better in activity transmissions, modestly gains installations. industrial, generation major revenues recovery and activity customers. We summary, in timing King gas demand increased in during backup second our improved levels distribution a in Product oil

segment in second turn expect But balance results few the outlook in continue to second Bill of I'll see a to the our quarter this discuss call to sheet. And year. remainder the more the the minutes, about XXXX. half before do, our and I'll momentum for talk I over of We

William Harvey

operating primarily good marine In morning, revenues XXXX and transportation or second income marine Compared David, $XX.X an income declined you, revenues an quarter, The increased $XX.X in or Compared X.X%. of million declined marine $XX barge increased fuel utilization revenues increased quarter, million the everyone. diesel million. the to reduced increases utilization, pricing. primarily due with barge operating quarter, million partially margin second income $XXX.X $XX.X pricing and were spot a and to due to offset million. Thank of of and the prices. XX%, $XX.X and rebuilds These reductions first lower XXXX market XX% operating to inland are are and operating higher coastal and result by increased inland XXXX improved inland, significantly million

margins quarter up costs to ops our impacted we were second maintenance operating as and by continue ramp expected, somewhat increased As operations.

effects plant lessened refinery Gulf pandemic XX% of in to May. the benefited Overall, of first increase from second with transportation approximately to Storm the term chemical market During or marine XX% XX% to in as and also range improving quarter, the XX% average the volumes year contracts contributed business low in of or mid-XX% improve into mid-XX% range Inland ton Average XXXX barge the inland spot affreightment. revenue with from Colonial improved Winter the in contributed as time factors of first activity demand increase charters contributed compared the barge significant X compared revenue. approximately to approximately COVID-XX those sequentially. miles rates Uri. XX% XX% the Coast longer to Barge contracts quarter. the contributed contracts inland The as a in from economy barge Long-term quarter and the of and sequentially the U.S. Pipeline outage quarter. the from recovered continued segment to increased utilization activity these

higher. to the term quarter digits. However, It to average will down improve in XXXX the and down remain pricing Only going XX% right to rates conditions renew mid spot as were the spot contracts And will high approximately average second second rates quarter. term contract we remained prices need for to single XX% contracts to when few the above renewed during term direction. in take a prices term contract see time market to get compared

be weak digits. term operating refined by second business Overall, renew in operating high inland to In margins. improvements single our coastal, in the margin demand continued in As will and see products for challenged was business higher, the quarter, black during the the contracts we oil.

renewals spot where Coast in due to rates pandemic. have revenues pricing, was and utilization, coastal increased slightly, low quarter, average recovery slower barge sequentially dynamics utilization were coastal to market from to range, experienced Hawaii, both the to and market primarily the mid-XX% weak the year-on-year the respect Despite During in West spot fuel contracts a stable. reduced of With improved due economies and barge rebuilds. term

well of are respect quarter quarter, margin XX% time as in barge reconciliation in in During a the for remainder posted XX%, to the call the the Coastal's our second operating mid-single With coastal earnings percentage our included contracts tank revenue approximately presentation under second second of the quarter the was which of negative changes charters. projections digits. of our website. XXXX approximately were in the term on fleet, as was

services activity and but in generation, higher industrial, to demand sequential the were our of the U.S. major year-on-year an XXXX $XX.X for in and million business improved demand $XX.X for $X.X Moving XX% in commercial U.S. installations on-highway overhauls. to improvements Revenues and distribution power also X.X%. or parts million operating Thermal Revenues $XX.X and resulted to year-on-year million These income operating sequentially quarter, backup first were the significant to business. and oil a which was improved due XXXX the down economic increased down the the million. increased In and products revenues second timing industrial is equipment, improved income increased and distribution parts increase due increased Compared $XXX.X Northeast. well XXXX to our due condition increased In quarter, sequentially the of and markets. in to power following the for operating equipment as and commercial installations demand XX% King $X.X and revenue and revenues of across an and across are income the Compared million. activity million and year-on-year as gas raising and for Marine primarily due second margin services economic were in to pandemic, operating with reduced quarter or services. in services our higher. the sales service

and had to industrial and quarter, and oilfield an businesses In activity and margin mid-single in represented the second in revenue approximately operating digits. and revenues XX% increased the operating improving increases significant income. During sequential and year-on-year segment commercial in oil of the market dynamics gas, the contributed

increases seismic in related equipment power Our for pressure deliveries international markets. steady pumping and manufacturing new as for of demand substantial experienced as businesses generation well units frac

new with gas and oilfield service customers. and sequentially oil distribution and transmissions, also demand business parts increased improved for major from year-on-year Our

operating the For single XX% second businesses quarter, oil in represented the revenue digits. related approximately gas negative a of margin and and the had segment low

the sheet. balance to Turning

X, a million June XX, we $XXX million. debt of Savage billion cash have debt reduced $X.XX $XX had with by we of total debt-to-cap April acquisition and of XX.X%. of on Since the XXXX, As

expenditure $XX net million, of the $XX At million. quarter, we strong total the quarter, flow During the of generated we end had $XXX of cash from free was liquidity $XX million. cash of of operations million, available capital

debt $XXX was this and week, billion, of total $X.X liquidity net was million. our As

which to represents continued full reduction for the a approximately For to year, our and nearly requirements XX% $XXX be of composed compared maintenance to million, expect is marine XXXX $XXX to primarily capital million we fleet. spending

the free to for expect generate cash flow million to $XXX $XXX also of million full year. We

and Lastly, from perspective, I'll an third of over rate XX% now approximately we the to quarters. call David. in fourth turn back the expect a tax tax effective

David Grzebinski

been last performance. Thank financial XX Bill. declining and conditions weak challenging The operating months have poor with you, markets,

in demand reopen and experienced economies second improved we conditions. the As overall quarter, in increase greatly welcome market a

to continuing products of and see the increasing, demand and this economies international half we reopen second into With for momentum and and the year. services U.S. positive oilfield continuing equipment refined the

earnings improvement As a see Kirby and expect we in result, for segments. of both to revenues

very about the are, the already now. recovery, just are of COVID-XX the these rising and resulting There around and While in lockdowns recovery, refined are refinery a that we of encouraged world watching some however, we spikes, the is products new U.S. risk locations, which could number cases impact the in demand. parts utilization in cautiously adversely

do we could will of the we the continue expect believe to Although build. pace that this momentum slow recovery,

anticipated deliveries of are supply delayed chains. the market, some supply lead that possible many the In and It half industrial is inland chain delays year. our know, other across remains could of or in manufactured labor times product equipment we outlook the second in Additionally, positive. our you the see of constraints manufacturing sales as creating

in year market higher is driven progresses. the year. construction of retirements mid-XX% utilization our refining we the into pricing. the spot petrochemical today, the to range, occurring, support in step will utilization complex. to XX% continue increasing increased of result revenues year will plants in the including high believe coming as and Overall, COVID, half our improve online. demand increase in new still products by strong with of With quarter, levels barge further change spot of This we a last expect petrochemical expect increase barge As should should sequentially pricing X in activity, of Barring the improvement second consumption improving activity a and during the third and we new barge and the range barges minimal XX% market refined this activity significant as demand, quarters during barge refinery

operating Although we have some modest in to expect labor third the margins starting increase. we inflation quarter,

As quarter. in a result, you inland will we digits, expect third the XX-ish, double the margins will, during be operating if low

some modestly could results refined demand revenue In weeks, with recover activity market year. tempered increased of will seasonal the demand be margins in remainder in has quarter weather barge higher activity fourth coastal, improvement during with the for expect further improved expect slower We for and the by but we improvement and recent products. the disruptions. spot the economic In normal

our As a in barge months, overall West slower demand has third we second in the range be the higher revenues slightly pandemic. increased from barge the recover quarter where to yield the coming the utilization coastal Coast fourth levels slightly, mid-XX% and result, will which quarter. particularly have on Overall, utilization should been than expect

coastal mid-single-digit second but of in range. still low half breakeven expect will the year, We operating remain the the in to margins improve negative below

operating continued oilfield and and parts revenue margins. new anticipate will recovery repair increased that and online summer distribution in seasonality improvement further with we revenue improved services, commercial in in from In bus growth sequential platform. sales our at Looking we expect activity with growth, result in on-highway industrial, improvements economic and the

product peak we season will we gas, In to expect reduction with markets. sequential a and current prices increases see some in during expect increased contribute primarily season. the seasonal power we And increased during and utilization as also progresses. We increases Thermo equipment incremental count and oil in demand should In installations. cargo summer XXXX generation, In harvest due in dry sales our the activity revenues, completions we hurricane season. the fleet, backup repair, rental in marine to continued power King sales service the rig well the expect oil believe in

of As to fuel result, in footprints on focus generate the to manufacturing, engines of efforts see generation services parts expect eFrac. friendly to highly increased higher power environmentally carbon for dual equipment, demand new and and units the remainder efficient In Distribution their gas pressure electric reduce and and new segment oilfield we a for equipment including transmissions, orders XXXX. pumping portfolio inquiries sustainability companies and a of Kirby's natural continues for for and

also remanufacture existing experiencing increased orders We are pumping to equipment. pressure

we in products a As half remanufactured the and deliveries increased anticipate manufactured XXXX. back result, of of

of industrial for and representing supply expectations and delivery our to However, equipment have the Overall, oil XXXX. potentially the could representing result for D&S. previously, year, shifting quarters as XX%. of revenues XX% and full revenue anticipate of mentioned delays and XX% approximately XX% some not into significant We chain commercial between growth in year-on-year changed gas materially with balance

to result D&S quarter fourth margins mid-single the be margins. will will quarter, full normal year expect some the operating operating the for digits low We with in the likely sequential reduction being third in in the highest. In seasonality

Before briefly we other want to comment wrap matters. X up, on I

missed. of success certainly to guide be inland marine year. X we be Kirby's us early will today, been Stewart Bill for through significant, integral that several Bill acquisitions CFO integration an and part announced to helped and contributions Stevenson. has of has as and will Kirby last the the retiring First, Harvey next years large and financial the strength have Bill's Kirby's our team been he &

we well week, XXXX full released Additionally, milestone envisions company This in and another - governance. as on our Report. for training report journey safety, new disclosures new released employee Sustainability with ESG the enhanced represents earlier our this disclosures as

You our report new section the website. can our access in on Sustainability

outlook. Now remain on COVID-XX things there impact we is optimistic very some about recovery, and up, its although the Kirby's to around uncertainty wrap

benefited increased market in year, important from Most the experienced in demand, and a major operating turning an inland perspective was a from first rising segments. that company quarter for second a earnings we favorable a The point financial the disruption. over with for positive importantly, both conditions time

provided along how is and the path can well its that highlighted down recovery utilization temporary the barge a Colonial business, to market it pipeline boost on how inland and the The and outage spot quickly rapidly With open. of is to shut While Europe and fully still move. prices tighten can India, much economy in disarray. Mexico America not South world still essentially

any demand range, for In will coastal, returns. although rebound inland from recovers are earnings XX% levels way keep pandemic the businesses distribution pricing, for improved remain retirements world, finally, it normalizes economy a bringing capacity a have steady we utilization the world And with in regain challenging, our pre-pandemic financial of market new lack around and will services, confident fully fully in continued allow in the performance. in in of and As we once liquid the industry recovers. a long check capacity conditions the solid U.S. the construction and come and economy last with year, and improvements

Our yet improvement our into distribution additional translating the highly pumping pressure and forward. last lower efficient, the not favorable solutions, substantial for markets. improved demand we second equipment friendly very power new more and capturing product go growth year and and We customers cost our oilfield our room attention for offering have of year in and half as in fully into is carbon the our environmentally in there fundamentals With and our recovered, businesses increased financial made we of the generation and Overall, structure, is provide will orders new expanded realigned XXXX. that difficult D&S during flexibility. have further progress

Our beginning and to marine improve. have markets stabilized are

us returns for has take future to our earnings this growth concludes advantage stage will All allow opportunities. prepared of this remarks. set Operator, and the of improved and

ready to are take now We questions.


[Operator Instructions].

from question Stephens. Our the comes first from of line Atkins Jack

Jack Atkins

I to on just Bill, want congratulations your say retirement.

William Harvey

it, appreciate I Jack.

Jack Atkins

my So are just question within I first things here regard is guess to how trending with maybe inland.

at rate. XX% about You utilization currently mentioned running you're

to we how customers be would of I you or I the move third at back through are you are levels where curious as there, rates giving rates? Are of activity spot could we that's just year? spot how over And rates they're that helpful. Just you quarter? David, above talk about to could with kind rates? think would update as for relative be to be know, you the think do sort balance contract your impact indication And any trend if curious And contract just their to utilization going of well, the expecting

David Grzebinski

continue quarter, utility. at quarter were Yes, the we improve. up the in down look, XXs mid-XXs ramped into XX%. - Pipeline Colonial second first trends We've to But got inland us beginning and Colonial of started to weather the of low the the to better Sure. of in the to to We Jack, time. kind started the in mid-XXs up to spike, it back got had less then a came help and XX%, little transit then and XXs in high essentially terms off taper than as outage little

did end of the the spot improved we important So contract in a But kind pricing was still thing pricing quarter bit. Contract pricing mid-XXs. year-over-year. and down is the

go to in You back quarter XXXX. second the all the way

kind quarter. prices Those we So of lapped then. back higher were that

So us that portfolio single to contract to kind went need kind high for what higher. start We'll X it's And low digits. renew that's that digits And need a kind to start mid- range, put digits, customers or first spot contract but mid-single the prices up to We was was are while. they improved. be another lap mean, quarter. can are right right then margins the bit. data well, quarter contract of Chemical world in high the of Coast that, double-digit may and seems we all X-year in say are the improved We from a Leading - your But of activity higher. inland XX%. of in to customers I going you sales has way or in storage is kind next crude down up. trends look, need. and now. hard historical the quarter demand barometers trends. pricing we be the Gulf is checkpoint quarter kind contracts. stay before in that to about be single But below above renewing That contracts about stay in above on refineries pricing spot to around And question, to the think believe it's of now, digits to the when pricing We take X-year Retail last quarter Crude range. It's so. the what's actually going indicators the in within now in third going to impact because double are up. XX% up. back. now. throughput are just direction. TSA to weather XX% the back in quarter average Fourth shows

orders up. manufacturing are New

the like coming feels So back. economy it's

about a within now. we're cases I all seeing hearing COVID think We're little again Kirby and right spotty some some pop about nervous up lockdowns.

think that up. to I things of economic It's last when used So move But data to word are reemerging you're - at in that be the that looking here. shows XX. use COVID open all I past, quarter, continuing to and hard

the XX% our not think export they And customers, They're lower think sense. you kind we us is that international makes than that they're what to still volumes about I telling when when talked and of were probably pre-COVID. are there.

various down. shutdown. You've still Europe got locked reacting up. South in of Latin of Mexico, India America, and America essentially stages essentially hasn't kind is opened really

So a lot export down. of those are volumes

quite back things are global are pretty customers. not it's improving, domestically, what we're hearing the our that from positive. said, So that's economies and All but

Jack Atkins

Well, little understand a cautious the sense out need rise seeing be COVID given the bit a of makes in that lot maybe we're that to and there.

inland you an side? next go would capacity on think for need for do for to trend? maybe about be would are increase And in support less as replacement think curious building want would rates to how we prices and over my for from thinking to where guess now, XXXX? where prices, follow-up if I much about around we or just expect steel couple expansion on of the David, think out industry net to you right years, building to the magnitude the commodity your you I your retirements What's of rise thoughts to So expectation question, get given

David Grzebinski

this think been question, the Jack. XX between we - have count about the About year. delivery - have XX we - barges We're I don't of them look, book order thanks is delivered. that Sure. Yes, actual is for think half we're that XX, maybe XX for barges,

all ordered pricing But really they were pre-pandemic, an half at barge and just delivering. started is new all-time high. first The

If XXXX Clean the now a of a changes you year. Clean are it driving it look XX% than XX, kind is Clean build was million. higher almost Steel $X.X X last XXXX, XX from to just is big X.X; around for XXXX, price in prices a that. Clean to now XXXX, about was a XX. XX probably part reference it to of that, In price was

So steel barges lesser have are a is more to But right lot palatable. look, are up prices retirements that driven a labor and extent. retirements building little now of up, a prices nobody so up. are Scrap steel

really it's kind So now. terms Colonial makes fact, constructive see net new pretty pretty saw the us right in about don't with And of overhang. feel We a barges. we unutilized add of what good in

us market, a industry go of the there's overhang equipment lot of is. new it And in. in to have think have competitors, of shows - that of the For of number on lot little XX weeks a not that's and see occurred be because equipment kind out a space the I some still in coming X the our you how fair, bank. to sold Clean retirements to of to really there And us, including

good So it standpoint, demand feels right and now. from supply pretty a


next Hoexter of Bank Our comes the from from of question line Ken America.

Kenneth Hoexter

phase of you out enter Great Bill, career. and as the on congrats, round next your the details,

William Harvey

Thanks, Ken.

Kenneth Hoexter

Is there point single be you those into market? Dave, wrap digits, to in What's utilization there. the at But the just Jack's to you parties the And questions positive? one rates high it rates the normal that to up of flipping mid for are still XXs? quick utilization need get are rates XX%. pressuring a mid-XXs do that on down noted

David Grzebinski

to up It's little. that's XX. Yes. maybe a XX, the been it's got mid-XXs, in moved historically Maybe be

psychological a I believe it's to we've key piece too and this. to got stay customers there. The think there's seen going

pricing to And it's a as going and the and this the or the improves that so really the in now that view stay that economy hits get while utilization for mid-XXs even helps I customer perhaps way tighter, think dynamic. mid-XXs it's

was dynamic. how the pricing the And there I contract, move. time. tight right that had Spot it encouraged. let we're Colonial. above and at is can that what now just a short And by period we know It So we're very a think did nice of we is customers in get helped

Kenneth Hoexter

you was thought coastal respect to supply/demand. terms stands I of supply-demand that where a market in pricing that the Can and provide your thoughts rundown the great on same dynamic? with

David Grzebinski

pretty in some no mean, balance West much better barge of. - balance, markets utilized market Again, less Coast The but now. Atlantic there the than mid-XXs say in still there's I say, utility, I'd we're Coast. I is get of the kind In think or is could being that take built. new and But aware are utilized than, Yes. No are new new takes to barges market, X coastal construction we're is tug to coastal years long unit. it up a a time. It longer others.

assets Bushard the said, out are there. that Now

they were court. of the sold that You have bankruptcy seen out may

have to that some of in to money to of equipment sink moving. going Somebody's lot back get a

the it utility market. So chemicals, heard of is refined the that's pricing market about market kind remarks, on is as the a slight held a side. more little overhang chemical as But coastal coastal products heavy. is is than know, in more flat, you its in you our inland the prepared inland than Look, less whereas but

So again, over will Bushard soak the think we of the equipment need refined continue just and caveat I see to expand, the come may capacity period with a to time. up market that back

think back any I come that takes to for manner. years in it equipment meaningful several

that need will maintenance done equipment. on to much be how knowing Just

Kenneth Hoexter

quick. real one, last Just

training water it are How know the water guys on your in labor tightness. the long-term prices? this is to employees, - Is this or mentioned You the your you've it tough - get now? had on teammates I how labor your but getting environment? the what's is this in

David Grzebinski

crew is Yes. classes to able deckhand running just our get for running up We're not getting adding at labor. our sure. we're employees. still still all, pretty add and good classes commercial We we're not Similarly and been started and them. tighter continue industrial our school it hiring. ever in both manufacturing to KDS, It's We're technicians - to getting marine right easy employees. It's to been do traction But we're I in able it's it. We're wouldn't since to able D&S, easy. in short in working, in our new January. opened we're now, in been but everything the and We've say then, mechanics. but business but find able at we've training business, hiring


question Chappell line the of Jon next Evercore. The from comes from

Jonathan Chappell

said lapping your pricing. away you're one responses you probably contract quarter two Jack's question, to from of David, in a or

XQ, in starting the higher still left you the you to back improvement. assume quarter year, of look the I course of delay the starting term your throughout And clearly, contract of It's comes think, with you resetting if to a only to the of mean, a bit term those I go third renewed contracts the few a half - of this fourth of to important, this going kind term a quarter next a like in year? said I kind understand you're renewals that had half the second of ask the resetting year. of in more as into that as I mean little contracts? if still timing impact So year-over-year opposed have to upward year-over-year few percentage momentum the lower because then What everything year, financial then puts this the and does lower. maybe

David Grzebinski

renewal the fourth be quarter portfolio quarter, quarter is will third the second the say, but similar would heavier. about I Yes. to

heavier. is always Our a fourth quarter little

other quarters are X The similar. pretty

of renewals. lot fourth You get quarter a

into heavier And renewals the fourth we're sometimes, fourth the generally bit quarter. a little and But those end up quarter. little extended get closing a in quarter first

Jonathan Chappell

term was market on but given bit or a where based pretty at you time at which kind back to X, fourth close. kind out, And you XQ but cautiously the in said that utilization to And not pointed get quite last on not quarter, optimistic the this the we the are getting if year's depths, higher least I breakeven, Okay. a that trends be of know the of pricing? we'll quarter you by year,

David Grzebinski

caveat macro a to situation. of the you as that statistics. seems heard I in those rattle some would with off be say, headed COVID that's Yes, fair. Everything But direction me

that that headed And so it's feels like we sure way right. for feel and

Jonathan Chappell

closing trimming you in which at means from to D&S, a speak bit working of a because that in-house term with Maybe to the before aggressive to been mentioned COVID. maybe recovery think once you've for some time in more is pace Can you you something cost acquisitions, see base finally the margin start sight? that structure cost cost power obviously the of the on pandemic. fixed what realigning you And the of some And even your inland? comments, structure

David Grzebinski

support overhead. bought had basically - out, Cenac to came some were we those taken And Savage, where Higman, of and shoreside No, through 'XX, quite would overhead. Yes. a taken of you bit We the pre basically heads and - back 'XX we've we've SG&A which But out downturn, downturns. imagine, out then SG&A down some then took back as shoreside kind that and were 'XX, you'll remember we've acquisitions. we're we all

some push improve mean, So we things should to have you leverage when to but pretty move, about feel our upside fleet higher that and to should SG&A. given pretty I think leverage good more I always help good. feels our it want is do margins larger margins. it, the start

William Harvey

X%. And also down you about SG&A all you'll second quarter second quarter to company quarter and look notice just - across is can

So incorporate activity that's year on but really lot focus there's marine, last to that. of a

Jonathan Chappell

Do I the level? of kind at did you Bill, quarter to notice is to that, sticky, stay it expect that so speak? second

William Harvey

the the especially level new but but first points, company. of has quarter, the around around, quarter, some of excluding jumping first bounces the really SG&A SG&A Yes, it's which


line question comes the of Jefferies. next from Giveans from Randy Our

Randall Giveans

from me. questions Two

mentioned First, drilling operating the you parts despite transmission sales margin improved activity, the new market, has of the negative and increased the still the gas and obviously, oil services.

So I is set up much that just better? delays guess, was and timing be due as 'XX that XQ to a result, to

David Grzebinski


about it. talk Let's

low and D&S gas little good good business, Oil to you and got of there in digits, is the of had - digits know, you As oil we've in inbound. and a business. and profitable still kind industrial we've was commercial commercial mid-single industrial mid-single news if margins. was in terms kind our will, gas then negative. of The The

pretty up meaningfully. is backlog Our

and we've equipment if think seeing lot about got products. the a electric Really, the of new One of electric build-outs, you and we're we've frac things microgrids supporting electric some is frac new are of there's the that and set goes new there's of generation the And a on. first and that engineering kind generation margins them, really products, products. testing of got in thin lot

and So deliver of for generation long more to the next build. in that and of saying, equipment support eFrac will way that's a quarter more continues Backlog into certainly eFrac. and yes, we improve as believe we power business the XXXX margins

which our but some We eFrac. fuel blending, all very It's right say continue new the to There orders of orders. is have eFrac eFrac pumping we've would bulk the pretty in take focused means now, receiving generation and I work, start-up some pressure ESG on margins. exciting. been new of lower customers are that generally dynamic basically been has dual the gas more

in the profitable solidly eFrac be quarters we'll think products. these new around coming I

Randall Giveans

updates speaking your Okay. Jones ESG And And of on comments, or yours an comments. tugboat. of from then competitor oil right, a is all-electric good a and LNG electric, equipment? Any with vessels then segue building gas your wind Act,

So Kirby is get as well? interest any from there into to that

David Grzebinski

the profiles. answer the here the a assist the to to load barges Well, We, all-electric electric build it yes in last. moving try talking the towboat which has ship for area, different hybrid barges, we're in is vessel constantly starting about are than market. a industry. we'll towboat diesel Houston in rather is you're Houston That frankly, And short pushing more

we some different, got We're so to little of they move wind, on is to and under wind couple a than the a we'll do whole NDAs, careful. lot a So be of just more Act we around. Jones whole build optimistic to can't although build-out, ships a equipment a ships say But a but can't we're lot, support that lot we get say the chance Randy. that,

Randall Giveans

obviously We'll Bill, hey, see enjoy be go, you retirement. to waiting. right. sad your But but All

William Harvey

Well, thanks so Randy. much,

David Grzebinski


bit to of It's part the Bill little until a first be around help. the game not Let's needs be longer. is clear. going for 'XX, but golf his

Randall Giveans

true. is That

Sounds good.


Our of Nolan the line from question Ben from next Stifel. comes

Benjamin Nolan

think do of to normal? than to Where those would earlier. the mid-cycle you then up Do mentioned the now say as is I have function higher is levels a inflation on, that all contract perhaps little you on new point, of levels? think that And it something a was to wage we the sort And wanted touched think question Jack's and sort and moved at mid-cycle are idea pricing. right the old that you normal I I effectively on you initially. of steel think Jack's back inflation term relative get you'd to

David Grzebinski

Yes. on that, a Well, $X.X let brand-new kind double-digit part get on XX,XXX-barrel for $X,XXX clean $X.X barge to me that take a barge With last first. being got materially X your to question return higher. to in to to be order million, We're IRR. pricing capital - a of the north day barge that's of of talking million get for

So is, yes. the short answer

inflation. we with it's crew hotels as members on the way, to costs we're on. With up and seeing new whether price cost renting crew or up, top equipment When costs seeing coming of we put hotel of of are by food have do crew and they the before those we come that, flying, some in of course, transport, labor cars inflation are

all equal, of higher, inflation. So inflation mid-cycle the higher and And should as being cost we seeing pricing. you things stated, equipment cost - some drive labor the inflation are the that for and need

to you talked tugboats, you've Tier frankly The on packages, towboats are much into X got expensive look engine thing ESG the much at other get more to about and start haven't moving which expensive engine to and and we more but is, operate. packages this, as

kind yes, you all recover together, put higher mid-cycle need to the throughout any of we're when to So industry going that pricing capital.

Benjamin Nolan

X,XXX at about mentioned, should of the I And the think you sort maybe how we are where mean, moment? that going we back relative to

David Grzebinski

not directly talk is where pricing market rather now. I'd Yes, about

If talk you the couple OTR, start can about pricing if call. my that looked kick I me a and of think, there's think other pricing, out attorney at, market direct there talking I people I on about would

Benjamin Nolan

All is, right. And mentioned second it. question Fair you had my enough. then

out chain haven't a could respect it or I flesh a that or Is that? with talked really a about little substantially? just is are the on specific bottlenecks but hoping side. We I bit? you big some the margin that how maybe headwind is to lot supply there D&S it of areas mean, was any it,

David Grzebinski

chips us? It's yet, something delay. a seen in it's closely. control it It's not imagine, and you watching with as very Yes. mechanisms has closely. the electric something Has frac there's of little fair we're with might watching Obviously, Anything stuff, margin. acute with that, a gotten minor. with that on but anything or it's and No, electronics anything we're component

backup parts. other I little all now. right The on would say thing seeing on is We're But a and forged cast it's margin the that.


from next BTIG. Our Greg from question comes of the line Lewis

Gregory Lewis

you to to type at is David, of has bit on how the frac talk I up of up side. about seen that in of where done thinking lot the I starting more service the Or touching more as along mean, the least is there to could what we're D&S, we've you opportunity - was be stuff of, kind moved is it's what clearly, fleet, - on? hey, sidelines, have going for equipment like lines an is little status are towards you've cycles? in? of Could a hoping you previous things which like do and eFrac, a in pressure going about talk are done Is utilization on is rebuilds to a line the the there oilfield been what's - it shift

David Grzebinski

left remanufactured bit that still functional, Yes, a former. and there latter have the look, quite out of a to equipment installed it's can closer there's - lot it. is would said, say probably We're That would are than eFrac. maintenance that now. of for come good. it in still new capital life say, maintenance the new be But look, definite back is economics seeing on little the capital any of trend a still I and the I bit capital,

these been just fleets, it a If period to remanufacture seeing the honest. of got not them. new most We're makes to traditional related. fleets, sense orders be in still ESG have lot you've Essentially, of it, diesel-driven

remanufacturing. more blowing we'll we Will dynamic see opinion, in so, going and my XXXX? get tighter, As be saw change, this don't like kind and think will, in that I of Greg. we

feels, rightly discipline. wrongly, it or lot I think capital more a

the of there's many capital much in available. not think companies, private as I particular,

lenders the there So of to is want flip an kind ESG - see and if forward. capital,

days So all as than still It's pretty now. We're we'll in more thin see sense, but been of go I and my makes forward. that it's said, opinion. area, that more in see just of we it, still less reman early to reman kind think starting

Gregory Lewis


you be there on think And for And that refining over Great. one kind couple then about way that to XX to XX the really of mean, help a utilization like dropped XX%. any to way it below we to need months. me. how refining I that any the in there Is of right? for market coastal track tighten coastal it of last utilization plus to improving? more try of market, Is been think in few there months. from long back kind about seemed 'XX, touched Okay. kind back It's just is and

David Grzebinski

years, that, refining think was the in down shut capacity tell X% the or thing at. of little the I be refinery last you on right about a that's either utilization, careful to idled. X.X in would look just I

X So base. little million idle. and plus bit XX%, above capacity that's been on that's was or lower of a barrels but shut refining back It yes, about a X up million down we're roughly, barrels minus

of as in recently, Now was back shut to down need came utilization, the complex to you've think refinery and about factor coming But that that's you the restarted. back. some of so we've online, refinery seen that health we some X% good and total issue signs be of got

Midwest restarting is are renewable moves it than those you soybean which biodiesel as diesel. - make oil make particularly likely take and they the thing most of renewable and barge more kind diesel, seeing that's going interesting rather into the coming other to we're Now if be diesel, that, out of

coastal actually that. all diesel? watching coastal we're So move and help that we've some Maybe, diesel. the Does go the had renewable renewable market, unit

utilization. that back I been at we it. to those of make again, back refineries market think to export come of idle coastal we're need we're And lower the the really some dent come But still and have a watching So levels. some in to

Gregory Lewis

catch Bill, Great. up with you October. in to hoping early Okay.

William Harvey

Thanks. good. Very

Eric Holcomb

Operator, one caller. we're going take to more



Your then the of from Anthony Securities. final for Baldwin question Bill Baldwin line from comes today

William Baldwin

far for insight color the bit broadening and go-to-market I'm oil mean, about you your you expanding that? to of bit better definitely and gas your focused markets, talk there, power out as Good the as little a particularly industrial and what's the really can you can hear new sounds a on In markets. gas focus you outlook. generation, and now as once us in - on the utilize industrial equipment, comments think, that are I markets. your there? you there? nice quite shed I eFrac user like to And interested talked business What generation as base interest markets strategy and regarding the more natural is equipment on you about power And concerned. just

David Grzebinski

start power storage its there having take energy on offline peak element When so little eFrac is that I of pad. Sure. before eFrac megawatts. you go generation XXXX, Stewart of generation. first the microgrid generation kind develop rather market, generation, them you a big power. that MTU with, natural around Yes. turbine engine of gas at XX which backup making Stevenson efficiency all run in I'll newer its micro there equipment the natural that generates more than gas, generation say, excited to a is What driving is we've more power is engines using gas the everybody from and power it's And all commercial on was the In commercial at industrial gas an more about drive. electric look electric packages the generation can or Well, natural and on back basically And correctly. to bit a huge one-off well a CAT seen grid power on lot & eFrac, backup standby numbers into tell started and

from rental lot we hurricane We have frankly, business a our that, of a power get generation fleet backup.

big-box During on case hurricanes, there's us outage. put the lights will in of standby an stores the

at Bill, a backup distributor, with to seen and in the took think for market you've capture to you the a Texas of are. relationship really which and you out using we the of And how with for grid that we're of We're think And more grid, the looking with and power. essentially, that as And of as general, market of we go we're are number I to taking the backup engine electric parts a that I electric some of good think more part challenges then people. trying power. OEMs businesses, grid, more in represent, California the manufacturers. our know, that's EVs as storm,

financial have important backup institutions, power battery market - hospital that up i.e., the car be and to We market for we're lesser and interesting we've pretty to other more good what the demands both that it passenger of nursing more home, and been kind would electrification energy working and couple will will future trying the backup for system. take tell with the to to be going in gets be. in backup markets, will see more Florida some a our into you type extent system, and across as occurs our We're I get utilized Northeast, the it. presence position power if storage becomes power in more of backup power. a for electricity grid healthcare, big to to It the and

have charge solar couple a commercial that to and Maybe not power. where rooftops need power there's you on drive So battery always there's - certain a of of backup in terms coupling backup the much and diesel situation as can with you'll buildings.

working new kind Bill. yet model that and standpoint, that to what we're in an at that's put nothing ESG the from So for pursuing all looking we're that's of But areas what we're market. There's on.

Eric Holcomb

we'll out the today your interest Bill, everyone, note. and Kirby ahead and All you, it Well, close then right. and in Thanks, thank call. go on for in that participating

questions XXX-XXX-XXXX. me have have you directly or day. any and you at everyone, If comments, great can reach Thanks, a


conference. ladies program. conclude the gentlemen, does for participation Thank today's and you, in your This

disconnect. now day. may Good You