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Good morning, and welcome to the Kirby Corporation 2024 Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Kurt Niemietz, Kirby’s VP of Investor Relations and Treasurer.

Good morning, and thank you for joining the Kirby Corporation 2024 third quarter earnings call. With me today are David Grzebinski, Kirby’s Chief Executive Officer; Christian O’Neil, Kirby’s President and Chief Operating Officer; and Raj Kumar, Kirby’s Executive Vice President and Chief Financial Officer. A slide presentation for today’s conference call as well as the earnings release which was issued earlier today can be found on our website. During this conference call, we may refer to certain non-GAAP or adjusted financial measures. Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings press release and are also available on our website in the Investor Relations section under financials. As a reminder, statements contained in this conference call with respect to the future are forward-looking statements. These statements reflect management’s reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertainties and our actual results could differ materially from those anticipated as a result of various factors. A list of these factors can be found in Kirby’s latest Form 10-K and in our other filings made with the SEC from time to time. I will now turn the call over to David.

Thank you, Kurt, and good morning, everyone. Before we begin, I would like to recognize our employees, especially our Florida-based team members that were recently impacted by Hurricane Milton. The fast-moving storm left considerable damage across Florida, disrupting the lives of our employees in the area and many were left without power for several days. During the storm and the immediate recovery thereafter, they remained focused on safety and continued to meet the needs of our customers and our businesses, as well as support each other during the event. I want to thank them for their exceptional efforts and resilience during this challenge. Now, turning to earnings. Today, we announced third quarter earnings per share of $1.55 compared to 2023 third quarter earnings per share of $1.05. Our third quarter results reflected steady market fundamentals in both Marine Transportation, and Distribution and Services, even though we experienced some modest weather and navigational challenges for marine and continued supply challenges in Distribution and Services. These headwinds were offset by good execution in both Marine and Distribution and Services during the quarter that led to strong financial performance, with total revenues up 9% and earnings per share up 48% year-over-year. We also generated over $130 million of free cash flow in the quarter, which we used to further strengthen our balance sheet by paying down $70 million in debt and to buy back $56 million in stock. In inland marine transportation, our third quarter results reflected further gains in pricing offset somewhat by the modest impact from poor navigational conditions due to weather and lock delays. From a demand standpoint, customer activity was steady with barge utilization rates running in the 90% range throughout the quarter. Spot prices increased in the low- to mid-single-digits sequentially and in the low-double-digit range year-over-year. Term contract prices also renewed up higher with high-single-digit increases versus a year ago. Overall, third quarter inland revenues increased 11% year-over-year and margins were in the low-20% range. In coastal, market fundamentals remained steady with our barge utilization levels running in the mid- to high-90% range. During the quarter, strong customer demand and limited availability of large capacity vessels continued which resulted in high-20% increases on term contract renewals year-over-year and average spot market rates that increased in the low-double-digit range year-over-year. Overall, third quarter coastal revenues increased 23% year-over-year and the operating margin was in the mid-teens. Turning to Distribution and Services, demand was mixed across our end markets with growth in some areas offset by slowness or delays in other areas. In power generation, revenue grew 4% sequentially, but was down 6% year-over-year driven by supply delays. The pace of orders was strong, adding to our backlog with several large project wins from backup power and other industrial customers as the need for power becomes more critical. In oil and gas, revenues were up 19% year-over-year and up 8% sequentially driven by some growth in our e-frac business that was partially offset by a very soft conventional oil and gas business. In our commercial and industrial market revenues were up 4% year-over-year, driven by steady demand and marine engine repair partially offset by softness in on-highway truck service and repair. In summary, our third quarter results reflected ongoing strength and market fundamentals for both segments. The inland market is solid and we saw continued upward pricing. In coastal and industry-wide supply demand dynamics remain very favorable, our barge utilization is strong, and we are realizing real rate increases. Increased demand for power generation and distribution and services is mostly offsetting softness in oil and gas and other areas. I’ll talk more about our outlook later, but first, I’ll turn the call over to Raj to discuss the third quarter segment results and balance sheet in detail.

Thank you, David, and good morning, everyone. In the third quarter of 2024, Marine Transportation segment revenues were $486 million and operating income was $99 million with an operating margin around 21%. Compared to the third quarter of 2023, total marine revenues, inland and coastal combined, increased $56 million or 13%, and operating income increased $36 million or 57%. Total marine revenues were flat compared to the second quarter of 2024, while operating income increased 5%. Weather and lock delays modestly impacted operations as we experienced three hurricanes during the quarter. Although the hurricanes had limited direct impact on our operations, they did briefly slow customer activity during the quarter. Overall, we experienced a 33% year-over-year increase in delay days. These headwinds were offset by solid underlying customer demand, improved pricing, and most importantly, execution. Looking at the inland business in more detail. The inland business contributed approximately 81% of segment revenue. Average barge utilization was in the 90% range for the quarter, which was an improvement over the third quarter of 2023, but slightly lower than the second quarter of 2024. Long-term inland marine transportation contracts or those contracts with a term of 1-year or longer, contributed approximately 65% of revenue, with 62% from time charters and 38% from contracts of affreightment. As David mentioned, improved market conditions contributed to spot market rates increasing sequentially in the low- to mid-single-digits and in the low-double-digit range year-over-year. Term contracts that renewed during the third quarter were up on average in the high-single-digits compared to the prior year. Compared to the third quarter of 2023, inland revenues increased 11%, primarily due to higher term and spot contract pricing. Inland revenues were flat compared to the second quarter of 2024. Inland operating margins improved by around 350 basis points year-over-year and by 75 basis points sequentially driven by the impact of higher pricing and ongoing cost management, which helped blunt lingering inflationary pressures. Now, moving to the coastal business. Coastal revenues increased 23% year-over-year due to high contract pricing and fewer shipyards. Overall, coastal had an operating margin in the mid-teens range resulting from higher pricing and shipyard timing. This will temporarily reverse in the fourth quarter given the higher number of shipyards we have on schedule. The coastal business represented 19% of revenues for the marine transportation segment. Average coastal barge utilization was in the mid- to high-90% range, which is in line with both the third quarter of 2023 and the second quarter of 2024. During the quarter, the percentage of coastal revenue under term contracts was approximately 99% of which approximately 99% were time charters. Average spot market rates were up in the low-double-digit range year-over-year. Renewals of term contract prices were higher in the high-20% range on average year-over-year. With respect to our tank barge fleet for both the inland and coastal businesses, we have provided a reconciliation of the changes in the third quarter, as well as projections for 2024. This is included in our earnings call presentation posted on our website. At the end of the third quarter, the inland fleet had 1,095 barges, representing 24.2 million barrels of capacity. On a net basis, we expect to end 2024 with a total of 1,093 inland barges, representing 24.2 million barrels of capacity. Coastal marine is expected to remain unchanged for the year. Now, I’ll review the performance of the Distribution and Services segment. Total segment revenues for the third quarter of 2024 were $345 million, with an operating income of $30 million and an operating margin of 8.8%. Compared to the third quarter of 2023, the Distribution and Services segment revenue increased by $10 million or 3%, while operating income decreased by $3 million or 8% due to mix. When compared to the second quarter of 2024, segment revenues increased by $6 million or 2%, and operating income increased by $1 million or 3%. Moving to the segments in more detail. In power generation, our revenues tied to industrial end markets were up 16% sequentially and 61% year-over-year. We continue to see significant power generation orders resulting in higher backlog from backup power, data centers, and other industrial applications. Our power generation revenues tied to the oil and gas space were down sequentially and year-over-year as product delays continued to contribute to lumpiness. Altogether, with the decline in oil and gas related to power generation, revenues were down 6% year-over-year, and operating income was down 26% year-over-year with operating margins around 10%. Power generation represented 32% of total segment revenues. On the commercial and industrial side, steady activity in marine repair offset lower activity in other areas, particularly on-highway truck service. As a result, commercial and industrial revenues were up 4% year-over-year. Operating income increased 15% year-over-year driven by favorable product mix and ongoing cost savings initiatives. Commercial and industrial made up 47% of segment revenues and had operating margins in the high-single-digits. In the oil and gas market, we continue to see softness in conventional frac-related equipment, as low rig counts and lower fracking demand, tempered demand for new engines, transmissions, and parts throughout the quarter. This softness is being partially offset by solid execution and backlog, and new orders of e-frac related equipment. Revenues in oil and gas were up 19% year-over-year, and up 8% sequentially while operating income was down 14% year-over-year, but up 166% sequentially, as lower conventional work continues to get replaced by execution on e-frac backlog. Oil and gas represented 21% of segment revenue in the third quarter and had operating margins in the mid- to high-single-digits. Now, I’ll turn to the balance sheet. As of September 30, we had $67 million of cash, with total debt of around $979 million, and our debt to cap ratio improved to 22.9%. During the quarter, we had net cash flow from operating activities of around $207 million. Third quarter cash flow from operations benefited from a working capital reduction of approximately $30 million. We continued to target unwinding more working capital in the fourth quarter and into 2025. We used cash flow and cash on hand to fund $76 million of capital expenditures or CapEx, primarily related to maintenance of marine equipment. Free cash flow generation during the quarter was just over $130 million. And during the quarter, we used $56 million to repurchase stock at an average price of $115 and reduced our debt by around $70 million. As of September 30, we had total available liquidity of approximately $570 million. For 2024, we remain on track to generate cash flow from operations of $600 million to $700 million, driven by higher revenues and earnings. We still see some supply chain constraints, especially in the power generation space, holding some headwinds to managing working capital in the near-term. Having said that, we are targeting to unwind more working capital as orders ship in 2024 and into 2025. With respect to CapEx, we expect capital spending to range between $325 million to $355 million for the year. This represents a slight increase from our prior range as we plan to make additional investments in our power generation rental business. Approximately $200 million to $240 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment and facility improvements. Approximately $115 million is associated with growth capital spending in both of our businesses. We expect the net result should continue to provide approximately $300 million to $350 million of free cash flow for the year. As always, we are committed to a balanced capital allocation approach and will use this cash flow to return capital to shareholders and continue to pursue long-term value creating investment and acquisition opportunities. I will now turn the call back to David to discuss our fourth quarter outlook.

Thank you, Raj. While we ended the quarter in a strong position in our businesses, the beginning of the fourth quarter so far was challenged by Hurricane Milton. The hurricane impacted our marine operations and temporarily shut down some of our distribution and services locations. Our teams worked hard through the challenging environment, and we are pleased to have quickly returned to normal working conditions. For detail on the marine outlook, our overall outlook remains solid for the final quarter of the year, driven in large part by limited availability of equipment, what will be tempered by the onset of seasonal weather, a bit of softness in the refining market, and some higher maintenance levels. In inland, we continue to anticipate positive market dynamics due to limited new barge construction. Demand is solid, but we have seen a little softening in the refining sector early in the quarter. Nonetheless, with these solid market fundamentals, we expect our barge utilization rates to be around the 90% range throughout the remainder of the year. We also expect continued improvement in term contract pricing as renewals occur throughout the final quarter of the year. We continue to see inflationary pressures in some areas, and there is an acute mariner shortage in the industry driving up labor costs. These pressures along with the increasing cost of equipment should continue to put upward pressure on prices. That said, we expect inland revenues will be flat to slightly down in the fourth quarter due to normal seasonality, and consequently, operating margins are expected to be down as compared to the third quarter. In coastal, market conditions remain very favorable, and supply and demand are in balance across the industry fleet. Steady customer demand is expected in the fourth quarter with our barge utilization in the mid-90% range. We expect margins in the fourth quarter to be in the mid- to high-single-digits, given a number of planned shipyards in the fourth quarter. Coastal revenues are expected to be down in the mid-single-digits sequentially because of the shipyards. In the Distribution and Services segment, we see near-term uncertainty from supply issues, customers deferring maintenance, and lower overall levels of activity in the oil and gas sector. However, longer-term, we expect incremental demand for products, parts, and services in oil and gas as rates of investment improve from what feels like a close to the bottom market in oil and gas. In commercial and industrial, the demand outlook in marine repair remains steady, while on-highway service and repair is somewhat weak in the current environment. Similar to oil and gas, the on-highway market feels close to bottoming from the trucking recession that we’ve experienced recently. In power generation, we anticipate continued strong growth in orders as data center demand and the need for backup power is very strong. We do anticipate extended lead times for certain OEM products to continue contributing to volatile delivery schedule of new products in the fourth quarter and in 2025. Overall, the company expects the segment revenues to be down in the mid-single-digits sequentially with operating margins in the mid- to high-single-digits, but lower than the third quarter. To conclude, overall, solid execution and good market conditions led to a strong quarter for us, and we have a favorable outlook as we look into this quarter and next year. A lack of meaningful new build of equipment in marine has supply and check, and we continue to receive new orders for power generation equipment as we work through supply issues. Our balance sheet is strong, and we expect to generate significant cash flow this quarter and in 2025. We see favorable fundamentals continuing and expect our businesses will produce solid financial results as we move through the remainder of this year and into the next few years. As we look long-term, we are confident in the strength of our core businesses and our long-term strategy. We intend to continue capitalizing on strong market fundamentals and driving shareholder value creation. Operator, this concludes our prepared remarks. Christian, Raj, and I are now ready to take questions.

Thank you. At this time, we will conduct the question-and-answer session. [Operator Instructions] Our first question comes from Daniel Imbro at Stephens Inc. Your line is open.

Yeah. Hey. Good morning, guys. Thanks for taking our questions and congrats on the quarter.

Thanks, Daniel.

I want to start on the inland side. On pricing, it looks like contract rates increased up high-singles, that’s up from mid-singles in 2Q. In the slides, David, it looks like you took down your net fleet exercise at year-end expectations. Can you just provide, to be given that backdrop, an update on the spot price environment here at the 4Q? And from your vantage point, how do you feel about bid season and contract renewals coming into year-end and then maybe into 2025?

I really appreciate all that color. And then maybe to follow-up on it, David, in the past, you’ve talked about given just the inland backdrop, at least a few 100 basis points of margin improvement year-over-year, I think for this year and next year. You did that again in the third quarter. I guess as you look forward and given that supply-demand backdrop, where can margins get to during this cycle as you look forward? If shipbuilding remains lower, rates keep going higher. Do you just walk through the puts and takes and kind of where you see inland margin getting to in the coming years?

Sure, sure. Let me start by saying, we continue to fight inflation. But that said, we are getting real price increases, not just nominal price increases. When you look at 2023 to 2024 full year average, and we like looking at it on a full year average basis because of the seasonality, the weather that Christian just talked about, some of the demand seasonality from some of our end customers, we like to look at it year-over-year. And you heard in Raj’s prepared comments, sequentially, our margins were up 75 basis points, second quarter to third quarter in inland. For the full year, year-over-year, we were up about 350 basis points is what he said. So, we had said for 2024 versus 2023, we’d be up 300 to 400 basis points. We’re smack dab in the middle of that based on the number Raj gave. Looking into 2025, I would say we’ll be up 200 to 300 basis points in that range. There’s a lot going on that can affect that as you would expect. Inflation being one of them. Labor rates, we’ve been through pretty acute labor market in the marine sector, and there’s been shortages of mariners across the board, across the whole industry, both inland and coastal. So we’ve been fighting that. You heard the new bill prices for barges, just all the inputs are up. And, I know that you see the rhetoric in the political debates, but inflation is real. We’re still seeing it, even with steel prices coming down a little bit, all the other input prices are up. So, you put all that in there, we still think probably 200 to 300 basis points for inland next year. I think peak margins, to your base question, I’d be very disappointed if we don’t go above our last cycle peak, which was about, I think we hit one quarter, we were 27%-ish, maybe 27.5%. I’d be disappointed if we don’t go right through that this cycle. We’ve got several more years of this based on the supply and demand picture. So, we’re really constructive, Christian and I are pinching ourselves about how good this feels.

Great. Couple of more years [to help there] [ph]. I appreciate the color and best of luck, guys.

Our next question comes from Greg Lewis at BTIG.

Yeah. Hi. Thank you, and good morning, everybody, and thanks for taking my questions. I guess if we look back like 18, 24 months ago, David, you were very focused on, hey, we’re going to be, the market is going to be, the fleet on the inland side is going to be more spotty short-term [than mid-term] [ph]. As we look at where we are today in terms of the spot term mix, I imagine that’s been improved. I didn’t hear anything in the prepared remarks. But as we look out over the next couple of quarters, how are you thinking about the mix of spot term on the inland side?

Yeah. No, we – I’m surprised we didn’t give that number, but it’s about 65% term, 35% spot in the inland side. Yeah, we’re comfortable with it there, because we believe spot pricing and all pricing should continue to go up for the next couple of years, at least. And, again, that gets back to the supply demand picture. When you think about building new equipment and a 30,000-barrel barge at $4.5 million, we need prices up at least 30% from where they are. So we’re very constructive about it. Could you see term get up to 70% on the average next year? Maybe. We’ll see – we’re comfortable with where it is, because again, we have this view that supply and demand is going to stay really good for the next several years.

Okay. Great. And then I did want to ask about the oil price, clearly, it’s volatile realizing that fuels largely a pass-through for you. But, I guess what I’m wondering is, like, how should we be thinking about the impact on and whether it’s a little bit on the margin side or how should we be thinking about in an environment where I don’t know let’s frame it both ways if we look at where we are in the oil price today maybe if it’s up $15 up or $15 down. What type of impact do you think that maybe has on your ability or around pricing and really just on margins?

Yeah, I mean you hit it on the nail on the head, fuel is a pass-through for us, we work really hard with our customers. We don’t want to make money on fuel and we don’t want to lose money on fuel. Most of our customers are better able to handle that that fuel risk than we are anyway. So from a direct impact, it’s not much. I think the higher the price deck for oil usually is better for our chemical customers and our refiners. So on the margin, higher the oil price probably the better for our industry. The lower, it does stimulate some demand and what we really do care about is volumes. So by and large it’s a mix, but I would say it’s biased to the upward side that the higher it is usually the better for us. Look, you want your customers making money, they’re a lot nicer to deal with when they’re making good money so that not that they’re not nice to deal with any day, but you understand. Now that said, look, on the D&S side, the oil field even at this price deck of $70 for WTI and $73 for Brent. Our D&S oil and gas business, the conventional oil and gas business is minimal. It’s almost non-existent. For the first time in probably two decades, we will not deliver this year a conventional frac system. All of our orders are electric frac. And, I mean, you can see it from some of our customers announcing the impairments as they write-off some of their old conventional frac equipment. Our base oil and gas business is really low, very, very weak. Now, have we bottomed? I don’t know. We’re just very thankful that we have a great e-frac offering. And, that is making great gains, and everybody seems focused on e-frac just because of the inherent efficiency, and we’re happy to have that. So, to your base question, if oil and gas goes up or down, I still think e-frac will be good, until the bulk of the pressure pumping equipment out there is e-frac, I think, we’ll continue to grow e-frac, because it’s just that much more efficient for both our customers and the E&P customers themselves. So, that was a long-winded answer. I hope I got to wait on that.

That was great. Super helpful. Thanks, guys. Have a great day.

Our next question comes from Ben Nolan at Stifel.

Yeah. Thanks.

Hey, Ben.

Hey, guys. I wanted to hit on the electrification business a little bit. There’s obviously the supply chain issues that you talked about, but it sounds like you’re continuing to grow the backlog. First, could you maybe frame that in, like, I don’t know – maybe what is the backlog or how much did it grow or something like that in the third quarter? And is it possible for you to maybe frame in how you think about what the TAM or whatever, what you think is doable for that business in the next, I don’t know, 3, 5 years or something like that?

Yeah, Ben, we’re investing in that, you may have seen our CapEx ticked up a little here at the end of the year. And that’s we’re adding to our rental fleet, frankly, as we look at the demand for power, it continues to go up. And just to be clear, when we do backup power, we’re talking big industrial scale, we’re not talking the smaller residential 25 kW units, we’re talking 500 kW to 2 mega-type thing. So that business continues to grow, we’re going to continue to invest in it with our normal capital discipline.

Thanks, Ben.

Our next question comes from Greg Wasikowski at Webber Research & Advisory.

Hey, guys, good morning, how are you doing?

Hey, good morning, Greg.

You probably get this question a lot, but I just want to touch on the free cash flow, obviously, there’s a lot of it. Other than share buybacks, is there anywhere to deploy that cash within the business itself? Any specific direct growth opportunities out there in the inland, coastal or D&S?

Hey, good morning, Greg. Raj here. Hey, yeah, we’re going to see a lot of good free cash flow generation. I mean this year is going to be very strong, $300 million to $350 million of free cash flow. You’ve seen us buyback stock. I mean, year-to-date we’ve done about 53% of our free cash flow has been allocated to stock buyback. We’ve always balanced that with investments. David mentioned our investment into the power generation, rental business, very strong returns. We’re very disciplined when we look at ROIC. We’ve got a very good framework that allows us to direct our investment decisions. So you should see us continue to balance that. You’ve also seen in this quarter, we paid down some relatively higher cost debt that puts us in a very strong position from a balance sheet perspective. So as we’ve always said, we look at inland investments, we look at stuff that we want to do around power generation in the KDS side, the distribution and service side. You should see us do some tuck-in type investments that we’ve always talked about. So, overall, it’s hard to predict acquisitions, but we like our stock. We’ve been doing stock buybacks. I think you should see us continue to do that going forward.

Yeah, I would also add, Greg, just more from a longer-term standpoint. Our CapEx is elevated this year and a little bit last year and maybe a little bit next year because of the maintenance bubble that we’ve talked about both in the inland and offshore. As that tempers, you’ll see our free cash flow go up. We are always open to acquisitions, but as Raj said quite plainly, we have a very disciplined approach. It’s always about being able to earn our return on invested capital. We would love to do inland acquisition. That’s our bread and butter. We’re quite good at integrating those and adding customer service when we do it. So that’s always our preference, but given the inland market’s pretty good right now. We’re getting a meaningful transaction at a reasonable price is probably lower. You may see us do a little more in power generation, but it’s not going to be company betting type stuff. It would be more a little vertical integration here or there with some bolt-ons. We’re always open to it. We’re always looking at it. We probably look at a dozen acquisitions a quarter, but you don’t see us doing a lot because we do keep that discipline. The good news is we’ve got the cash flow to do the right things. In the absence of good investments, we’ll buy the best barge company that we know of out there, which is Kirby stock.

Got it. Awesome. Thanks, guys. And then speaking of the maintenance cycle, David, I’m curious, where is the market right now in the barge maintenance cycle and assuming that it hasn’t reached peak yet and it’s presumably next year, what are you expecting in terms of market impact when you do this…

Our next question comes from Ken Hoexter at Bank of America.

Hey, great, good morning. And I agree, Dave, with your answer on a few more years of the 200 basis points. Hopefully that continues on the inland. Jumping over to coastal, given the move to the mid-teens margins, was that with the capacity pulled out? I know, Christian, you were just talking about the huge run up in the surveys. I think you were just talking about the inland side there, right? Because we’ve got a huge also pull out for coastal, right? And so given the move to mid-teens, where should we see that one run to, Dave or Christian?

Yeah, Christian was telling me earlier, if somebody wanted to order a new unit, you wouldn’t see it to what, 2028?

Yes, sir, 2028.

Yeah. So we’re really excited about coastal. As you know, Ken, you’ve followed us for a long time. It was pretty brutal on us for a number of years, and it’s good to start getting back and start earning that capital back that we deployed.

I’m just not used to seeing the double-digits going back to recent partners. But I’m sorry, what was the comment there about fourth quarter on margins of coastal? We do see the seasonal pullback, or?

Yeah, yeah, fairly heavy pullback. We were mid-teens in the third quarter. We’ll probably be mid- to high-single-digits in the fourth quarter, because some of these big units, they get – I can’t give you the dollar per day number, but it’s tens of twenties of thousands of dollars, and you get a few of those big units in. You still have all the costs of, we keep the crews, the crews help out in the maintenance process. We still have a bunch of supplies we do. We have some maintenance expense that gets expensed, not capitalized. So when you put all that together, that pulls down the margins, especially when you have some of these big units hit the shipyards. So, again, we focus on the full year average, and Ken, you’re going to see that continue to go up. It’s a very tight market right now. I think, any given day, we’re high-90s in terms of utility.

All right. So on inland contracts accelerated back to high-single-digit from mid-single-digit. I guess, thoughts heading into the 4Q mid-season, and I know you talked a little bit about this the state of refined demand. Do you terrace thinking about what goes on here, or given the move to maybe if we get the change of administration more drilling? Does that enhance lower net gas prices and maybe even boost production going forward?

Yeah, I think natural gas prices would boost chemical production, or certainly make it even better for our global chemical customers with big U.S. facilities. Natural gas is a key input, so the lower natural gas price is good. It’s also good for our e-frac business. But lower oil prices, as we talked a little bit earlier, the price deck, particularly with crack spreads and stuff, gets a little wonky the lower the oil price goes. So it’s hard to say, but natural gas is probably the largest input to the chemical space. So that could be a positive. It’s certainly a big input for our e-frac business. And, by the way, in PowerGen, we’re building a lot of gas, what we call prime power. So that’s people that will take our natural gas power equipment and make prime power to put in the grid. So we’re seeing that ground. We’ve picked up an order from somebody that’s doing that just this quarter. So it’s interesting. Lower natural gas prices help that whole model in terms of prime power and using our natural gas resift product to generate it.

And I’m sorry, your thoughts into the bid season?

High-single-digits, low-double-digits, 15%, 20%?

Yeah, we’re in favor of all that.

I appreciate it.

It’ll be good, Ken. It’ll be good.

Okay. Thank for you time, guys. I appreciate it.

Thank you. Thanks, Ken.

Our last question comes from Scott Group at Wolfe Research.

Hey, thanks. Good morning, guys.

So I get we’ve got weather delays and maintenance and all that. But when I look just like tonnages, inland tonnages down 15% versus 2 years ago, I think you’re talking about revenue down a little bit sequentially. How much of this, if any, would you say is a demand issue?

Okay. And then just lastly, if I can, you made a comment earlier, you’d be disappointed this cycle of inland didn’t get to a 27% margin, I think you said. What’s the answer you’d be disappointed if coastal didn’t get to a blank?

Yeah. I’d say it’s 20%. I think our prior peak was about 15%, 16%, which we’ve already bumped up against. So, we keep there was a little question earlier about the competition between inland and coastal and it does exist in the coastal guys are pushing hard. I think both Christian and I’d be disappointed if we don’t cross 20% in the coastal margins. It’s a good time for them. But you do know that there’s a little bit of a difference in the model. Coastal, the barge and the towboat, or the tugboat are a pair, whereas in inland, you can push multiple barges with a single towboat. So there’s a little advantage that inland has, but with that said, our coastal guys are out there pushing hard.

Thank you for the time, guys.

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

Thank you, Jacintha, and thank you everyone for joining us today. As always, if there’s any follow-up questions, reach out to me directly throughout the day.