Fitch Affirms Kirby Corp.'s Senior Unsecured Debt Rating

Business Wire,  August 1, 2001  

Tags: Fitch

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Business Editors

CHICAGO--(BUSINESS WIRE)--Aug. 1, 2001

Fitch has affirmed the senior unsecured debt rating for Kirby Corporation (NYSE:KEX) at 'BBB'.

The Rating Outlook remains Stable. The rating reflects Kirby Corporation's (Kirby) leading position in the inland tank barge transportation industry, long-standing relationships with a diverse set of customers, and proven ability to generate strong free cash flow.

The 1999 acquisition of Hollywood Marine supported Kirby's market position with the addition of 270 tank barges. Growth has continued in 2001 with the addition of 94 barges that were leased in February from Union Carbide. Economic fundamentals in the industry remain strong, with long-term demand growth exceeding barge capacity growth. Continuing consolidation in the industry has reduced the risk of price volatility and improved returns on invested capital. While the Hollywood Marine acquisition boosted leverage ratios to levels that were high for this rating category, Kirby has shown an ability to quickly pay down debt. With limited capital spending requirements and strong operating cash flow generation, Kirby appears well-positioned to keep debt-to-capital ratios at or below 50%.

In spite of the general economic slowdown in 2001, Kirby's financial performance remains solid. Strong volumes for refined products and black oil have kept marine transportation operating margins high (17% in the second quarter of 2001 versus 19% in the second quarter of 2000). The company paid down a total of $29 million in debt in the first half of 2001, providing further evidence of its commitment to reduce leverage.

Kirby Corporation operates a fleet of 871 tank barges, transporting chemicals, petrochemicals, black oil, refined products and agricultural chemicals on the U.S. inland waterway system. The marine transportation business accounts for 86% of total revenues. Kirby also offers after-market servicing of large, medium-speed diesel engines used in marine, power generation and rail applications. The diesel engine services unit contributes 14% of total revenues.

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