Kirby (KEX) 1 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Kirby Corporation 2024 Second Quarter Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Kurt Niemietz, Kirby's Vice President of Investor Relations and Treasurer. ahead. go Please

and President thank Second Executive and David joining our Kirby Kirby's as slide today call Chief the Financial Kirby's as and Good Earnings you can issued Call. website. earlier the earnings be Raj presentation Vice XXXX President O'Neil, Officer. today's Christian on for Quarter Executive are Operating Kumar, With Corporation and Officer; Kirby's Chief morning, was found Officer; conference for Chief well me Grzebinski, A release, today which

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

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

and actual now can in be the of filings Kirby's uncertainties, list the call other factors various these Forward-looking result time with statements Form David. time. from XX-K of to latest and to SEC factors. a made differ involve results materially found will those as our our risks A anticipated from I and could over in turn

and Thank you, morning, good everyone. Kurt,

during and during customers as exceptional our were were and many them impacted they want week Hurricane meet But and [ needs a to support by this Before and we Their resilience of and without begin, efforts team were to I actually I'd like several to days. disrupted as recognize recently two. to their Texas-based focused members thank business Barrel our challenge. on employees, well power for especially event. that this up continue or remain our each other lives the for ]. left

earnings. which quarter compares of $X.XX announced share to Today, share. Now second earnings per earnings turning we per second XXXX to quarter the of $X.XX,

navigation fundamentals market mostly supply and in in even and experienced steady and services reflected offset we results quarter for were though distribution distribution These good and execution. by transportation continued both second headwinds Our challenges marine marine weather services. modest and challenges some

XX% the demand distribution utilization to modest activity conditions marine Solid and continued quarter a Spot performance. due low increased the results led rates the inland versus continued navigational to financial increases strong running revenues margins ago. Term in steady quarter. transportation, prices From during range and standpoint, up higher marine pricing low inland and in customer momentum mid-teens increased In weather our in second Overall, and in year a the mid-single and also core the digits the quarter sequentially contract were demand a low mid-single-digit with throughout services and year-over-year impact with year-over-year. in second both to to mid-XX% barge lock delays. reflected prices from renewed XX% quarter was range range. with

utilization XX% In fundamentals the our coastal, with high in remain to mid- barge levels range. market running steady

high quarter ballast teens market and and mid-XX% helped During in margin Average XX% range and customer term had These the from in water continued increases coastal which in and large with of operating inflationary increases increased pressures, teens helped year-over-year. an particularly in the expense systems. year-over-year the revenues treatment digits percentage softened single of vessels, low shipyards addition demand capital the the availability the partially second quarter, year-over-year. range. spot offset capacity strong Overall, resulted on increased we high renewals contract sequentially limited saw rates

other more generation, but wins operating and growth as revenue the with pace our was X% several our by industrial with in become In Turning project to across our business. deliveries. power and Power of power up year-on-year, services. total, growth in year-over-year, end different income. distribution some X% were markets by orders revenue stable and sequential and continues driven commercial large Thermo sequentially, and grew was coming the In businesses. strong driven our customers oil XX% critical. In across demand to from sequentially, demand down growth up with revenues revenues King e-frac year-over-year were XX% steady In and gas, and product industrial market, from backup

In ongoing In is summary, inland our strong, second both segments. and in pricing for supply-demand The we remain market continued very dynamics market favorable. quarter momentum. strength results coastal, reflected industry-wide see fundamentals

Our Raj gas our softness to outlook are rate the call offsetting and realizing quarter talk second real balance to discuss first, distribution later, power services detail. over and oil Increased and barge utilization is we I'll and and I'll the sheet but areas. is segment in in results generation mostly strong increases. demand about for more more turn

margin revenues David, you, quarter were with the was around second to revenues Compared quarter revenues, segment Transportation and morning, $XXX income XXXX, XXXX, Marine operating income Marine quarter Thank coastal the or XXXX, Marine and XX%. X% and total and everyone. operating increased of $XX million, Compared total million In good XX%. first inland second and and income of of increased the million operating $XX an $XX increased increased million XX%. to and XX% operating or combined

River in major briefly rains impacted underlying by demand, Lower the customer locks increase the execution. Channel and heavy year-over-year, these mentioned, modestly XX% the and closed closed headwinds to Repair. and in delay As offset two David most weather days were Houston area solid pricing operations This but a were improved led Mississippi on for lock as delays importantly, Ship

XXXX of business or was quarter the and of for charters the detail. mid-XX% utilization to of a revenue, XX% affreightment. range contributed those and XX% of to from or the approximately transportation contracts from term second contributed inland longer more Long-term with XXXX. of year low in in with marine of quarter, similar X inland business contracts contracts is which XX% first the barge quarter inland the XX% approximately Average at segment revenue. Looking The time

increasing to digits were mid-single low average prior the the the sequentially market in market in digits to improved mentioned, year. the the David compared during to on and that contracts term range As mid-single up year-over-year. conditions in contributed mid-teens second spot rates renewed quarter

Compared the higher and digits inland pressures. XX%, pricing term to to pricing. revenues impact helps driven which XXXX, to save around mid-single year-over-year, inflationary first of contract off to improved cost Inland XXX compared second lingering quarter quarter of and spot revenues operating increased the low The management, by basis primarily of points the continued by increased margins due higher XXXX. Inland

in and Coastal high the had is reverse The of quarter. for from quarter pricing with quarter. one second planned XX% teens had represented resulting margin shipyard the range the an which Now to timings, the in in fourth service Overall, business. contract the revenues revenues moving the increased fewer coastal large reenter XXXX. coastal shipyards. the Marine Transportation operating during year-over-year range, pricing Coastal and and of We conclude segment. mid- which was to XX% its shipyard of higher the utilization due higher temporarily XX% low business in box to first average will quarter coastal and line XXXX vessel

inland presentation This a up which the call the included posted on respect changes charters. capacity. barges, was for range revenue XX.X businesses, Average provided At Coastal year-over-year. XX.X of under spot projections fleet of million rates in of in single quarter, total higher tank had remain in teens for Marine were our to the the expect of have fleet website. of representing second mid-XX% and XXX%, quarter both approximately earnings quarter, and contracts contracts barrels of the basis, term barrels XXXX of badges a XXXX. percentage sequentially net a the XX% to the time is high digits for we in is as the approximately barge unchanged capacity. X,XXX During year. coastal expected inland were were end term we with well market year-over-year. in high X,XXX second as million our the range Renewals our of coastal With On reconciliation the on average the inland representing to end the

Services for and X.X%. and to second to $X of XX%. second million by million, & operating operating Services operating on segment. $XX of move Revenues quarter an by the $XXX I'll income decreased of flat performance Compared were million and to the $XX with revenues review the X%, X% When of income segment revenue while quarter XXXX, the of year-over-year. or income Distribution million increased Distribution margin compared million the XXXX, or Now was increased or segment XXXX first $X the operating quarter of by

and backup to and sequentially customers our revenues tied driven up availability. were we and power by industrial as demand from XX% backup and see XX% generation generation, power to markets for power significant equipment orders other gas centers end strong In year-over-year continue data power non-oil

year-over-year power of down total as revenues and generation generation while margins was X% gas to to up revenues were operating tied the generation operating year-over-year, space and power in product revenues. represented with digits. continued oil delays XX% low to Power income contribute were Our segment up year-over-year the XX% lumpiness. Altogether, double sequentially

in repair service. and growth On the on-highway in commercial marine sales Thermo product King truck side, particularly industrial activity offset and steady areas, activity other in lower

up up As revenues in revenues ongoing operating favorable cost high digits. margins by industrial XX% and driven initiatives. segment single income C&I year-over-year. mix were of commercial XX% product made X% year-over-year, a savings Operating and result, with increased the

operating and as in partially engines, and XX% softness gas orders execution over softness rig second the and result solid XX% Commercial income offset first In gas low oil e-frac quarter and the market, up quarter. stable new see to demand revenues of a equipment. XX% areas the favorable most XX% by equipment of same Thermo Revenues in demand period, revenues gas and in is being by and was we lower tempered increased throughout for of were and oil increased driven but demand in continue low to Oil digits. quarter frac-related fracking product new This by higher and to and conventional parts on Compared XX% mid-single King represented the as The the counts in mix. down the backlog shipments. margins Operating of Industrial sequentially. product segment year-over-year transmissions

Now to balance the sheet. I'll turn

had of with was XX, we XX.X%. June $XX and our $X.XX As billion ratio debt-to-cap of around of cash total a million debt

$XXX During the from quarter, operating activities million. to net had of we flow close cash

reduction capital operations quarter of working a approximately cash saw from flow million. $XX Second

related more XXXX. We continue marine capital cash capital and the primarily million fund into year on expenditures equipment. $XX We of hand as of working to flow and used cash unwinding maintenance target to progresses to

average During the at of an price $XX.X used also $XXX. stock million to quarter, repurchase we

available of June As we liquidity XX, million. $XXX had of approximately total

near range $XX million existing and associated $XXX approximately improvements. improvements The $XXX capital million and the from in generate associated For $XXX marine year. supply to businesses. the Having is Approximately operations both said driven XXXX that, this working We track Approximately capital capital chain and million, million between cash provide capital are free million million remain $XXX of for CapEx, of and capital posing to see working with net by our higher managing growth revenues XXXX, $XXX for we orders million term. shipped in spending of $XXX and is to to respect facility and we million as maintenance some to to cash the marine to some on in EBITDA. equipment year. flow $XXX with $XXX flow unwind we million constraints headwinds to spending result to targeting With inland beyond. expect coastal still should

we always, turn return to discuss capital to David this opportunities. approach, remainder I will a long-term to to the call acquisition flow and to value-creating the cash now outlook. and capital pursue and committed to back use of continue As XXXX shareholders we'll investment our allocation balanced are

quarter operations the marine we impacted some Well, Hurricane [ in and shut D&S hurricane the Barrel beginning was exited the with ]. to outages. our challenged down temporarily businesses, power third quarter of momentum our The continued by of due locations our

strong. steady. despite the favorable and Our the pricing XX% continues year, normal growth conditions. end and marine in expect we With the to improve challenges, of D&S operating environment, year-over-year XX% market and returned at quickly our original be teams to the to demand businesses fundamentals our high worked challenging these growth. have continued of guidance to to the to Despite second earnings half hold of in hard is we're pleased

high For marine, some the the in our remains and part and improving for of remainder more continued of utilization. plant driven limited large year, outlook strong by on availability activity detail equipment refinery chemical

demand in positive new construction. strong due marine, Specifically we inland market anticipate dynamics to and customer limited barge

throughout be market, supply to dynamics in market drive mid-XX% and of approximately expected which further currently With barge these represents the These in low strong our improvements favorable range we to inland remainder the of revenues. fundamentals, spot XX% in utilization to year. are demand expect inland the rates the

double-digit expected the to headwind should on during as expect an by We a mariner XX% average as said, quarter, are full basis. driving occur for shortage That expect costs. grow maintenance also to to and improvement margins, quarter year. in continue the year inflationary an acute low renewals the offset the necessary the in range we high we and increase activity year. from a remainder this labor there required Overall, expect are second single the contract the over pricing Also the increases year throughout to gains. for improve margins be in continued in although of will regulatory up term be operating pressures pricing full remainder to revenues gradually is industry, the the we see levels inland third just These of

year water and compared very and barge the industry Strong range. installations XXXX. In us, for coastal, across low the double to supply in full customer mid-XX% the with and increase ballast fleet. digit to utilization is to year Market in behind low expected conditions treatment range year throughout are remain strong, the With our favorable is major demand mid-teens expected the shipyards full to revenues demand

continue year. in planned we in a to distribution oil our We new services, gas quarter, volatility and in and for expect to range in stable uptick fourth third and margins we in the number inherent see continue power together products low the coastal markets. services and to quarter are full the In helping of operating the margins with both orders in double-digit of to average have for soften demand generation the our adding receive an manufacturing, shipyards which to

volatile for for the XXXX contribute despite prices, will exception and and We trucking certain downturn we marine side, products the activity do for in strong, anticipate is incremental with margins and levels and flat into lead the the large uncertainty single while In expect the are backup Overall, services. and segment delivery maybe be is repair by lower demand of parts, for growth compared lower, other basis to we refrigeration demand commodity schedule data segment. and products commercial In center to volatile company to expects when slightly services the very industrial, is the continued new in oil as On revenues and extended from to anticipate high year XXXX. demand but demand continue, bottoming. seem mid- OEM that times in impacted on-highway operating products generation, the strong. power year-over-year weak and mix. due somewhat In need to power products gas, be slightly to down be in on a XXXX to full to to digits a outlook

of half the us. growth and year. a the have the outlook favorable our market of for a your that remarks. And value to are intend I creation. solid as favorable remainder in at concludes strong, to to confident questions. long-term of remainder now take higher range. our Raj year capitalizing see financial and We as conclude, expect the of in conditions see we Christian, this markets first final our term, through and move our generate year. results our core ready these and flow strong end coming we shareholder will will overall, fundamentals businesses execution and strong We this led we as produce free To previously our continue look we businesses on drive Raj cash and long prepared strategy. of we're balance mentioned, sheet to strength the We significant And guided year. favorable with expect continuing for Operator, and is the

At Instructions]. you. time, question-and-answer [Operator this session. the we conduct Thank will

. Our first the Lewis Greg question from comes is BTIG. yours. line The of line at

and really inland happening by in multiyear you what's being Coastal. really could equipment. demand. if I been coming. increasing this just mean, see it about has you think is think of we are, a is in economics more feels time about that much really some in are new can coming also that that, you how coastal, could you was as this as if bit always It And talk bit kind that sense? new long like driven from of we a of of far Yes. you long builds And no appreciate, cycle that? as a know How a talk out extended about I around little strength Yes. ordering been market, down about hoping a is terms a those make I in really I economics one of talk are little about new it coastal away little rationalization. where bit Or build and has we fleet where you that

it's Yes, be. from strong. really first. a to tight take where standpoint demand to demand The supply sure. up demand it Look, the It's is and on used

part I more the think gasoline, of you're is back demand out products seeing just moving of around coming up. COVID, refined U.S. jet that is fuel diesel,

helping up. at of look can all the ecosystem standpoint. now that's international flights have demand from picked some You the And

diesel of are little So a bit renewable emerging refined products. we're a around of moves well. moving There's lot that as

So demand is good.

been it's There's rationalization. where really a lot of that's side, supply the On helpful. been

participants As balance. It got at equipment market good. treatment we very and right a which cost, looked water the balance tight and is of now. putting was lot it's there that into in the And actually, capital other brought ballast industry a retired, back

-- existing supply. the just on that's So

if X today barge building you back ATB gone million tug-in a to $XXX a even ago we that -- years now $XX would when really considerably. be unit To nobody point, somebody most of I a XXX,XXX-barrel think a $XX reference maybe. million, up building to cost unit, would $XXX give I the think built has encouraging to is thing just it is contemplating is was which [indiscernible] build unit the

So high. the are equipment very required rates new build to

XX%. higher another at So where now, even XX% than we're above maybe probably right

So quarter, going rates the up. good are up. was I saw a thing. pricing in comms term That's you mean

Spot the up was mid-XXs in in Our pricing teens. pricing coastal the year-over-year. high offshore up was

good. it's So

industry, the water of that an of to as ballast we, treatment. is cost all recover went the Part capital that have into

inflation about inland there's offshore. both it out of talked an Mariner So acute it. is and We're that's And there, costs. seeing shortage. we've as There part crew

So a the labor is X is costs getting rate in coastal. will going contemplating very to up that like are and it demand real at building line least But we're now. nobody looks anything lot. bottom go right tight, another supply increases X years because and for And is

And building Greg, the least X in a from new at sitting going space, are it's right to take coastal where now. years box we

definitely Coastal ahead it's see. about the doubt, No hearing may of is did of maybe term. even tightening long now. runway. more way the like There's questions guess Clearly, It the Yes. of gas market expectations the -- the inland around be the really question in we're good company a bit now I that expected, one I has natural a here little out of just kind to medium side. have some looks market of talk one playing that

Or that great kind is of As has out is curious, by drive? the everywhere, it how refined I I'm but been to petchems great. What's pricing more products parcel real of the of way driving? inland think driven strength just seeing Yes, versus ]? it has about of [ what's kind pricing Any we're much kind side, been

like bit, the about out. and have Big demand. flat that's good, is pretty products that Yes, pretty has it's it's I'll been refineries much a are team Their narrowed been coming tag little here. running spreads a been strong. COVID but crack of weak. that picture, little refined chemicals and Christian, out really

Christian, every demand. to over the trenches with product it our turn me Let day in he's

Sure. Thanks.

with refineries. our supplying, South refined you strength to the of the Gulf really side, post patterns infrastructure. the U.S. and products in seen bit And Europe, the Latin in evolve are I a see COVID conflict world-class Coast trade We've the more got think Gulf on America. refiners products where little Ukraine fine markets you've refining America,

here. they've so a strong run had nice And

steady upside Our into some chemical half here maybe back are very the the customers of with year. going

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

operator. Good Appreciate you, Thank it. quarter.

So two we had questions.

hard relates David, it now little thought a how to Or The cause to or pricing bit better side, Has get to double in said going you of power enabling the are quarter, and But what's for you you you generation you push that there. efficient? be thinking a be to Or talked to or uplift about that margins first power changed? one, margins the remember I side it was really found the the little digits. the to bottlenecks more bit margins? kind low last you're

of Part lean what But of team focused It it's power look, Christian gen. mix. on segment manufacturing. kind doing we're Yes. on depends terms the got in of has

little the gen a strong. will So market run-through power depending big But end bit. we're on But vary a is is getting little picture that. it the on

are good any That's business, to growth You we pretty And Hopefully, year-over-year -- XX/X is acute rental fleet hurricanes. this just your answers of our backup and pretty But of power was gen quarter-to-quarter. rental. and prepared line gas power on well it X%. weak. And out power in When the Obviously, And kind said in question, that down that's saw have that's based power. in where when our will lot remarks, the the deliveries Ben. some the oil to we A our do bottom in seems it revenue bit facilities. was power necessary. higher-margin a is manufacturing for the of vacillate of that quarter. comes But needed the in of becomes pieces. it's like little need part backup it only margins during and gen actually

you in availability to about be that guys is where much simply not business are among or it it at bottleneck is that. But to must not it are to that you And guess my as then simply second Or appreciate talking that's inflationary? able one, a mariners wage issues labor thought be creating we inflation. I could nice Yes, just you don't -- I level? people has of you you're are that have helpful. sort and maybe the for there because deliver as do

Christian would frankly, be tag very get We've had this there's not doing situation more difficult to and mean got Yes. mariners to supply I about horsepower will if community the team really because And I talk we've But pieces story. to move enough the it's of and tight. lots it. we is and them one tight. Look, boat really demand. Christian talked because just barge we're barges, the fine. in we about it

doubt. own good, deserved mariners, own tight but well or really and there. our have inland. Go and the it's mariners, is we I'll acute we've obviously, more entire which ecosystem, is some no our whether ahead some We market. our give just it's it's to Christian add produce increases, Chris. But coastal nice it by add But across type and school color, had some let an

the pretty around Yes. some Thanks, pain against a marine to back whole, jobs challenge industry. We're recruit the and crewing industry to of David. kind good There's that competing as across people are a offshore. significant short-side inland pressure some

industry. think and But challenge. it that's our is kind with been I our of the leverage successful one versus training a we've center, points of

just do and success, healthy and merit July. But the mariners it's no increases Mariners challenge some a through cycle that. occurs gave people it's industry. the in to marine We And life again. Kirby that the sort it's nature went challenge, a for happen of doubt but just having of we're Our to attracting for to the our

But we it's we that where can't not XYZ not point quite do you're business, like, it's man, at yet level. whatever the just --

it some And day, people level, quite we graduations. But moving is around levers earn can dance different fully got everything every a it everything holidays, pull like in We've not and keep keep that a crewed a of bit that to we They will is premium keep moving. challenges trip to it No, trip. that sometimes going. to to over. there's but

down to have operation. We we've instance had where not major any shut seen an

Add lot tours care but ride that the customer of industry so of we watches -- people is of to to base, duty, asked a having longer and the we're taking speak. longer

comes Imbro question of next line Stephens. from Our the Daniel with

Enderlin Joe for This ] is on Daniel. [

Just on spot in inland on continue side, And to maybe this industry. expectations how move think spot math side changes the the capacity? or about inland if have given any side, And pricing builds? this will are the change your the how do higher you you prices new for in on competitors then do the thinking the increase change does thinking shipbuilding around shipbuilding for adding

is new-builds very Yes, sure. of cost the Yes, high. still

X years XX,XXX-barrel probably twice what XX I was barge ago. was think the new build new build is twice it it what [ X -- ] is

is the now. justify new is needed a in build pricing XX% above where still a lot are cost up the So to we

So new the a we're think year, -- for I barges. there's that not lot of building, XX-ish said, new around hearing

gets I new delivered -- which bubble, it still justify around year-to-date. don't builds. dealing big That's rates with talk capacity. think shipyard to But could are. Christian are about a XX -- we maintenance People been have

is So company's that's as turning tight. the And pretty up been free through things we've talking bubble. about, of side then of a flow mariners lot the cash to maintenance just

So together all color that? really build. some and Chris, you to to is go that to put add do want you anxious nobody

Yes.

an cost arch David at we're where all-time has of That created steel. tight outlined certainly high, So seeing the plate highs. stubbornly remains plate being construction environment steel the numbers.

a tell inland it today? you you XX the it's what's workforces during out. And market down new reduced you if barges if was COVID. think don't about I I think flat year build I delivered And until shipyards A looked full lot to right get I also "Hey, can their shipyard XXXX. of would running capacity unofficial probably and think constrained. said, capacity the now parts by a construction barge a about tank count, you're tank of seeing at my the

around context some new builds you seeing. what gives of we're kind that So and

That's helpful.

I throw a follow-up, your marine you as factors for are operationally then guess, what maybe biggest steps guidance? take against whether revenue navigational can transportation, as factors? as course delays of the those can what far Just maybe off And that within to execute any you

So that's an two example. X.X-day flood Houston some had are tend Texas basic of the out and more Houston we tends caused watershed And to I'll the haven't And maintenance we the be goes weather queue I XX it as There then a Ship record Texas, XX, something a flooding you Channel, [ the could we area really broadest which ] were broadest down water due that's the coming Again, are quarter. to something years. something seen. in be toes where to XX lock we -- mix floodgates. River river any in delays. the that and in impactful as really give significant. pretty [indiscernible] bar things can trying get the get experience delays the We're that given haven't quarter seen outages a is gates closure in to in through with,

three see the you about. that obviously, getting we've La hurricanes have we're year storms. it But part to Niña worry weather we'll So had what And looks is a into effect, like. of already where with significant factor, the named

the So there's the River, which of and action low well we a you Lower helps other water But locks the been high then period short the context. phase maintenance went really on water a And do but repairs weather part, year, can for some fortunate obviously, impact the that this then Mississippi it's where our plays outages, this and you been bridge lock we've navigation water lock and behaved pretty issues and delays, most high water big role. the itself on if give rivers the weather Mississippi events, bridges year, see into high River. the

Our comes from Research The question Webber next the is line Wasikowski Advisory. and of from Gregory yours. line

costs is one customers. just your higher First than around

escalators in prices the your curious, little last things pushback across there's Just like ago. less a maybe just contracts? an industry of overall, bit or think And now time you around nowadays there's cost X do years understanding year this higher and even more versus

think we of with same up these do fully they the of ballast leverage like inflation it. regulatory understand understand very They're are they're some inflation our some piece that's the that. -- world. sure. good understand treatment, around things most thing. cost. do a capital being Look, steel the customer well a in I water aware for evolve we deal They gone labor companies aware Yes. driven, prices are up, biggest, -- have have sophisticated of understand they that which costs they price They the They're of base. Obviously, the sophisticated

And any So they're when -- less little business business is company, hypersensitive other they sensitive is about when it. good, they're price. get about a like bad,

is volumes. What businesses about though volume or the can They their still have good been pricing. care of amount same good. have Fortunately, have their pricing, we pretty bad but

the acknowledge is Now earnings them obviously, base. they it. we're your all in strong answer the viable, our cost doing It's and they understand of really healthy, customer question, do to well. in Greg, favor good structure have to But short

Got it.

before, Okay. again spec to new to making used Understood. XX, excuse for to talking talking XX a And absolute probably back maybe for is and the return, needs unit And to less tow can me. make make to David, up on inland. to this builds is XX. we headline what we rates. or spot be it down -- like to XX economic and economic about more start feel like barrel inching I were just less about sense. want then number that rate then sense we've building I for two or And if in number XX,XXX that rates like talked try about And to boil go And be it to people

high I've as heard think nowadays. XX as I

risk to that, could Where off number to worry, it orders continues rise then do slide estimate a you trickle to just might but that capacity, to given And rates. continue based watch start rate in see of the higher where boils you you costs down that there's If not to purely a economics? that just now? you would cause for headline where there'd any be as of think some where that with industry put

gone we XX% like capital. capital a on It on up. Well, get a you're $XX,XXX now. it it's rate, XX day. return keeps That double-digit -- of up. call not on. it's sliding Yes, a close -- capital to return spot probably just breakeven, it's to even breakeven It's

If build million, that the the $XX it's a you you at barge horsepower of probably look cost on two capital towboat to, depending for it.

So you well, that talked little as do compliance the all But things to But an up operating impact. cost the about labor going rise. continues costs regulatory expect gone that have just have cost We've up. keeps costs.

we're and flights. of there's is around, If X,XXX go and of but to that every it, day. lot down, up. That's moving mariners costs those airline in there's coming lot -- of it's still a cars. inflation sure a think our continue cost about a -- It's There's you mariners rental lot just call

So in, construction. new to up when factor cost it's all breakeven you that it been creeping build

start Now worry the when point we people about. that's building. is always something larger And do

in on I'd comments spec earlier of is bubble. new back there's are necessary. that not lot build made There's maintenance shipyards to to Some tight. out a some a the I that advance both think people of and things try build and do one, But there what Christian go capacity they and

the quarter ours. tuned industry, lot that's that's cash us up bubble people's third mean, hit everybody is flow going industry of that. experiencing So a the in got I and maintenance we've a in to including here big

changed considerably. just the has money So borrowing then of you cost in roll

we're just build that for all from away -- capital it if discipline, see still in it you new the keeping is price. we'll check. it's together But later ways rates just this Now year. reduces and And Fed put -- -- building we're

Yes.

are the discipline, being of not and seeing part. I the construction that. well. there's and now. little right I think described would capital what some David seeing most you're for price speculative much on out replacement going tell And built COVID There's of coming of money, I in that there's is And very building, just industry you capacity very the you, think,

Got it.

color, number I there. guys. David, the appreciate really That's actual And helpful. I Okay. appreciate you swinging in an

is Our of Hoexter the line yours. of question The Ken from next BofA. comes line

And little extreme. because where Just number, that is that the on there of you then Is business? seemed miles a shifting that Or about trending fund Christian, shutdowns that. breakeven down about? were It is gave you're within now? the talking a -- I follow-up rates lock are the something know X%. but

Exactly.

think were I we that were what quarter miles those two you can bought lock as and of and saw referenced was in repairs days weather heavily and explained by events impacted locks in make I some definitely the the delay some you whether factors. ton the

we the at Given -- the just the wrap of of XQ? hurricane into should the just that given the the at expect flow start start up, kind of through quarter, let me hurricane

]. us that mean Barrel a was in I [ Yes. for event QX

there well in the it So few weathered in will it Barrel both companies. did for an down have closed [ a impact but some We from July. in of month ]. be impact pretty days whole a as Houston

crude condensate Midwest, just of also of moving a out I'd Ken, used voyages. do We too. add upper long some about are ton miles the and like are the to those and trips of length lot

looking a So ebbs it miles, you and little careful flows. at because be to ton got

is in things. got look mile thing per you you revenue factor I ton as to a also at think

current of our I that's current a And on shoot where your General you probably call. gave would So in if me rate rates question about our good. a Counsel terms

get some So and it's channel it. checks -- you can do

be probably So not more specific, wish we we could but I advising.

I of All decline I we guess, talk go sequentially? they continued presume increase let's that can to Can right. magnitude guess Understood sequentially? -- that. I about on

client sequentially? The

Question talk about [ miles you XX ]

XX not decline [ will they'll Yes, miles They sequentially. go up. ]?

said they've increased I Increase? Yes, we presume yes. sequentially? can

picture decline. quarters than year winter quarterly and said up margins. gave to that's you than of more said basis color. early the Chris Big give really lower this, last or around are can margins full let Ken, increase I the margin seasonality summer to we they some and We're year sequentially. know No, the get, type gets XXXX, points. picture, guidance -- so at I be we XXX we and look that would because early -- XXXX margin this quarters why year, then back will talk heard I'll it talk you big

XXX we're think or to on I be track better.

I bit. both Christian progression unforeseen, something picture, see talk a think And we'll a recession from see big rate real And let basically something we'll or I'll increase year. nominal. about . level that the of comes barring margins and next in that similar increases, quarterly

the We'll opportunity We're portfolio. seeing strong Yes. to still reset momentum. pricing an have to continue

one seeing you're But on, outpace is goes the of larger spot XX% to our to turn rates still QX XX%. by portfolio. year opportunities the As reset

pretty room to things got feel So still and Ken. we go good,

just it I some follow-up D&S about have might Greg was I a And missed before, of the segment. Great. And asking think then Great. on but I that. know

fell maybe impact? Your from margins I that revenues see mean XX% power seasonal XX%. generation to from of XX%. Is to went I about a X% up

So maybe margin, little through that a in gain you bit more. talk just could a

like what more it's shipments. generation it's we -- gets -- nothing that. almost more timing packaging when It's shipped, it's Again, power talked of just Yes. with than than certain nothing margins. really about

is our the of now. And out the based look not good see manufacturing shrinking that -- year-over-year right The you'll larger demand facilities. move You news got of we're at full year. is shipments, around growing, to particularly on number kind even revenue

from Wolfe comes question the of line yours. The next with Research. Scott Our Instructions] [Operator Group is line

sort QX in pricing points then opportunity, should is should we want So hear next expect sequentially I you're year? right QX I another uptick could basis I'm QX? sounds QX. another that did in sure that margin maybe improve improve just a of And to with inland opportunity, hearing the And saying XXX heavier to it margin make then right, inland pricing like

but get be end expect we of -- would of to That I think million, the up would like higher be the to get will of guess, and quarter be versus Scott to, maybe next kind what don't higher margin quarter. a Fourth fourth $XXX starts would we in of the the was sequential, dicey But year. It we quarter high, million. $XXX in guide third personal yes, in or terms second fog of in impact, just I basically to in actually, quarter. terms when quarter. of It's than to down have that worse not terms weeks fog. we our we it being in can moves moving around, that's our can Scott. stop move able the we just fog. just can a get starts, equipment -- of it And shut And believe hurricane, Fog weather -- not is fourth

down quarter usually anything very third fourth we're little I bit a versus don't dipped Christian, know, margins quarter. cautious about they So you?

No, I think you that well. covered

margin there's points can there. of the pricing then momentum we're to to there? get It pricing low Coastal, And maybe the double-digit go like this some there's discussion X,XXX good that margin sounds right? same assuming continued basis around where improvement do Like really like does we Obviously, year. going

Yes.

that ballast of driven treatment through of we treatment. through in pencil in haven't a be come first were A bouncing I got last the We by water but were We we point, around had XXXX well, -- think it We've second lot 'XX quarter, finished quarter. in that. to was to it the your we ballast of We water put won't -- paper, lot in shipyards breakeven. out our

more a And so margins we've had uptime popped. the lot have

points, picture got year. will but X just on big fourth to XXX basis X,XXX You XX%, to, not or because the see basis into we've giving could big but points But It shipyards it guidance of really in we're alluded Christian next pickup. XX% to probably XXX -- yet, as year-over-year some going bigger quarter. units. be margin be X you and should nice won't see cut half get the the in we've

need haven't nice We to price pencil should put in next in paper, see and rises given coastal very a the year. we getting but you margins we're uptick

environment very really Yes. about executing We're operating The rate a high level. good Coastal. and feeling at

and as in as our as demand customers. fleet's . it's good [indiscernible] uptime great it's with been shape, and high ever in Our

either all that clock, have. coastal like though, just you last thing, got color just like to about you or just hear have know quickly, don't the the orders to activity. Do you then I questions pick totally but And up, inland Are build any I I've guys start visibility? the visibility, but like starting

you're of last I about barges just barges XXXX. the the XXXX, built talking context ] built in think [ XX-some-odd in X years, in XX-some-odd

year decades Year-over-year, this this XXXX. XX lowest so at tell it I those construction and will business. in And you, But in represent is X years the increase. an

even a at even So the or XX barges to still you're going not retirements. XX outpace year, barges

XXX-some-odd have for XX XX are that still to and barges You their retirement. candidates old years

what you now is construction replace the that being see some think is I of barges done out of to are retiring. replaced necessity So

every so tank measure, decades. I we've contextually, back And amount to by in think represent these of inland X least the back years construction barge seen

if earlier, is Yes. unit offshore I now right said offshore an acute, offshore or build right? even you more As say you would just in Raj ATP. wanted that Christian said if to

You it wouldn't now. is right see building contemplating even the until But end of 'XX.

you off, cut I ahead. go Scott. . So

see No, or could you I I next orders more know so up, that -- totally become I'm see this whatever orders. get could like can be year like it. if wondering just or -- like do XX don't year, I you picking $XXX so the

labor it's mean the that the I themselves, is don't Yes. shipyards in actually clear of reduction themselves. with in and space available constrained the some historically the yards pre-COVID, they're order by but exact the facing of market we existence that the the issues book, into capacity were compounded that every that to shipyards have are sell visibility

diminished. build of the that barges actual don't have you the exact to as -- so not And but tell confidence today, visibility I with into we some can order we book, may ability level of is

to session. Mr. concludes the closing back now like This Niemietz to I it remarks. turn question-and-answer for Kurt would

to thank you, for please and call me. reach feel free out today. there's Gerald, joining If everyone, any you, our to follow-up, Thank

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

disconnect. now may You