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Good day, and thank you for standing by. Welcome to the Kirby Corporation 2025 First Quarter Earnings Conference Call. At this time, all participants will be in a listen-only mode. After today's presentation, there will be a question-and-answer session. [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, Kurt Niemietz, Vice President of Investor Relations and Treasurer. Please go ahead.

Good morning, and thank you for joining the Kirby Corporation 2025 first quarter earnings call. With me today are David Grzebinski, Kirby's Chief Executive Officer; Raj Kumar, Kirby's Executive Vice President and Chief Financial Officer; Christian O'Neil, Kirby's President and Chief Operating Officer. A slide presentation for today's conference call as well as the earnings release, which was released earlier today can be found on our website. During this conference call, we may refer to certain non-GAAP or adjusted financial measures. Reconciliations 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 risk factors can be found in Kirby's latest Form 10-K filing 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. Earlier today, we announced first quarter earnings per share of $1.33 which compares to 2024 first quarter earnings of $1.19 per share. Our first quarter results reflected improved market fundamentals in marine transportation and continued strong demand for power generation and distribution and services. These positive trends were partially offset by weather and navigational challenges in marine and continued supply delays in distribution and services. Overall, our combined businesses performed well during the quarter. In Inland Marine Transportation, our first quarter results were considerably impacted by delay days. Throughout the quarter, our operations were challenged by winter storms, high winds and fog across the Gulf Coast, as well as lock delays throughout the system. These weather and navigational issues slowed transit times and impacted the financial performance of our contracts of affreightment. Overall, delay days increased 50% compared to the fourth quarter of 2024 and 15% from a year ago period. Despite these increases in delays, market conditions improved from the fourth quarter due to better customer demand and limited barge availability, which contributed to favorable price improvements. From a demand standpoint, customer activity was strong in the quarter with barge utilization rates running in the low to mid-90% range throughout the quarter. Spot prices were up in the low single digits sequentially and in the high single digits year-over-year. Term contract prices also renewed up higher with mid-single digit increases versus a year ago. Overall, margins for Inland Marine were right around 20% despite the poor operating conditions. In coastal marine, market fundamentals remain steady with our barge utilization levels running in the mid to high 90% range. During the quarter, we saw continued strength in customer demand and limited availability of large capacity vessels, which resulted in mid-20% range price increases on term contract renewals. Our planned shipyard maintenance on several large vessels that we mentioned last quarter continues to wind down, but was a headwind to coastal revenue and margins during the quarter. Overall, first quarter coastal revenues decreased 6% year-over-year and operating margins were in the high single to low double-digit range. Turning to distribution and services, demand was mixed across our end markets with growth in some areas offset by softness or delays in other areas. In Power Generation, revenues were down 23% year-over-year as supply delays pushed some projects out of the quarter. However, the pace of inbound orders was strong, adding to our backlog with continued project wins from backup power and other industrial customers as the need for power remains critical. In oil and gas, even though a very soft conventional oil and gas business pushed revenues down 18% year-over-year, operating income was up 123% year-over-year, driven by e-frac and cost management initiatives. In our commercial and industrial market, revenues grew 6% sequentially and 12% year-over-year, driven by growth in marine repair activity, while operating income was up 23% year-over-year due to favorable product mix and ongoing cost control initiatives. In summary, our first quarter results reflected continued strength in market fundamentals for both segments, despite meaningful weather impacts and supply delays. The inland market is strong and market conditions continue to support higher rates. In coastal, industry wide supply and demand dynamics remain favorable. Our barge utilization is good and we are realizing real rate increases. In distribution and services, strong demand for power gen is mostly offsetting weakness in oil and gas and in other areas. I'll talk more about our outlook later, but first, I'll turn the call over to Raj to discuss the first quarter segment results and the balance sheet.

Thank you, David, and good morning, everyone. In the first quarter of 2025, Marine Transportation segment revenues were $476 million and operating income was $87 million with an operating margin of 18.2%. Total marine revenues, inland and coastal together, were steady as compared to the first quarter of 2024, and operating income increased $3.6 million or 4%. Compared to the fourth quarter of 2024, total marine revenues increased 2% and operating income increased 1%. As David mentioned, fog and high winds along the Gulf Coast produced a 50% sequential increase in delay days that impacted operations and efficiency in inland, while planned shipyard activity impacted the coastal marine business. This was 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 82% of segment revenue. Average barge utilization was in the low to mid-ninety percent range for the quarter, which was better than the utilization seen in the fourth quarter of 2024. Long-term inland marine transportation contracts, although contracts with a term of one year or longer, contributed approximately 70% of revenue with 61% from time charters and 39% from contracts of affreightment. Improved market conditions contributed to spot market rates increasing sequentially in the low-single digits and in the high-single digit range year-over-year. Term contracts that renewed during the first quarter were up on average in the mid-single digits compared to the prior year. Compared to the first quarter of 2024, inland revenues increased 2%, primarily due to higher utilization and pricing, offsetting the negative impacts of higher delay days. Inland revenues increased 3% compared to the fourth quarter of 2024 despite unfavorable weather-related conditions. Even with the difficult weather conditions, inland operating margins improved year-over-year driven by the impact of higher pricing and continued cost management, which helped stave off lingering inflationary pressures. Now I'll move on to the Coastal business. Coastal revenues decreased 6% year-over-year due to the higher number of shipyards in the quarter. The impact from these higher shipyards was felt throughout the quarter, but is beginning to wind down in the second quarter. Overall, coastal had an operating margin right around 10% as shipyards were partially offset by higher pricing and cost leverage. The coastal business represented 18% of revenues for the marine transportation segment. Average coastal barge utilization was in the mid to high 90% range, which is in line with the first quarter of 2024. During the quarter, the percentage of coastal revenue under term contracts was approximately 100%, of which approximately 100% were time charters. Renewal of term contracts were on average approximately 25% higher year-over-year, and we also noted that average spot market rates were up in the mid-single digit sequentially and around 20% 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 first quarter as well as projections for 2025. This is included in our earnings call presentation posted on our website. At the end of the first quarter, the inland fleet had just over 1,100 barges, representing 24.6 million barrels of capacity and includes the newly acquired barges we announced today. We expect to end 2025 with a total of 1,117 inland barges, representing 24.8 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. Revenues for the first quarter of 2025 were $310 million with operating income of $23 million and an operating margin of 7.3%. Compared to the first quarter of 2024, the Distribution and Services segment saw revenue decreased by 7%, while operating income increased by approximately 3%. When compared to the fourth quarter of 2024, revenue decreased by $26 million and operating income decreased by $4 million. In Power Generation, revenues decreased 23% year-over-year as supply delays pushed some projects out of the quarter. Despite power generation revenues being down, we saw continued orders from data centers and other industrial customers for power generation and backup power installations. This contributed to a very healthy backlog of power generation projects. Power Generation operating income was down 39% year-over-year given the supply delays and had an operating margin in the mid to high single digits. Power Generation represented 34% of total segment revenues. On the Commercial and Industrial side, growth in Marine Repair offset lower activity levels in our on-highway and Thermo King business, driven by the ongoing trucking recession. As a result, commercial and industrial revenues were up 12% year-over-year and operating income increased 23% year-over-year driven by favorable product mix and ongoing cost savings initiatives. Commercial and industrial made up 52% of segment revenues with operating margins in the high single digits. Compared to the fourth quarter of 2024, commercial and industrial revenues increased 6% as increased activity in marine repair was partially offset by softness in trucking in the trucking related businesses. Operating income was up 13% over the same period, driven by favorable product mix. In the oil and gas market, we continue to see softness in conventional frac related equipment as lower rig counts and tempered demand for new engines, transmissions and parts throughout the quarter. This softness is being partially offset by execution on backlog for orders of e-frac equipment. This dynamic caused revenue to drop 17% sequentially and 18% year-over-year. However, despite the drop in revenues, operating income was up 7% sequentially and 123% year-over-year, driven by our e-frac business and cost management initiatives. Oil and gas represented 14% of segment revenue in the first quarter and had operating margins in the high-single digits. Now I'll move on to the balance sheet. As of March 31, we had $51 million of cash with total debt of around $1.1 billion and our net debt to EBITDA was just under 1.5x. During the quarter, we had net cash flow from operating activities of $36.5 million. First quarter cash flow from operations was impacted by a working capital build of approximately $122 million driven by the underlying growth in the business in advance of projects especially in the power generation space. We expect to unwind some of this working capital as the year progresses. We use cash flow and cash on hand to fund $79 million of capital expenditures or CapEx, primarily related to maintenance of equipment. Additionally, as announced, we used $97.3 million to acquire some equipment from an undisclosed seller that comprised 14 barges, including four specialty barges and four high horsepower riverboats. During the quarter, we also used $101.5 million to repurchase stock at an average price just over $101. Our repurchases have continued in the second quarter with another $23 million at an average price of $91.18 as of April 30. As of March 31, we had total available liquidity of approximately $334 million. We are on track to generate cash flow from operations of $620 million to $720 million dollars on higher revenues and EBITDA for 2025. We still see some supply constraints, posing some headwinds to managing working capital in the near term. Having said that, we expect to unwind this working capital as orders ship in 2025 and beyond. With respect to CapEx, we continue to expect capital spending to range between $280 million and $320 million for the year. Approximately $180 million to $220 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment and facility improvements. Approximately $100 million is associated with growth capital spending in both of our businesses and could be deferred depending on economic conditions. As always, we are committed to a balanced capital allocation approach and will use this cash flow to opportunistically return capital to shareholders and continue to pursue long-term value creating investment and acquisition opportunities. I will now turn the call back over to David to discuss the remainder of our outlook for 2025.

Thank you, Raj. We're off to a solid start in 2025. While recent macro events have created some near-term uncertainty in places, we continue to see favorable fundamentals as the year progresses. Our current outlook in the marine market remains strong for the full year. Refinery activity is at high levels. Our barge utilization is strong in both inland and coastal and rates continue to increase. In distribution and services, we are seeing strong demand for our power generation products and services and we continue to receive new orders in manufacturing, both of which are helping to soften the decline in our oil and gas markets. Overall, we expect our businesses to deliver improving financial results as we move through the remainder of 2025. In Inland Marine, we anticipate positive market dynamics due to limited new barge construction in the industry combined with steady customer demand. With these strong market conditions, we expect our barge utilization rates to be in the low to mid-90% range throughout the year. Overall, inland revenues are expected to grow in the mid-to-high single digit range on a full year basis. However, I need to give the normal cautionary points. A potential tariff induced recession or unforeseen changes in trade flows could cause a drop in demand, which would impact expected growth. That said, for now, we see revenues growing as planned and expect operating margins will gradually improve during the year from the first quarter's levels and average around 200 to 300 basis points higher on a full year basis. In coastal, market conditions remain solid and the supply of vessels is favorable across the industry. Strong customer demand is expected throughout the remainder of the year with our barge utilization in the mid-90% range. With the number of shipyard days declining and essentially 100% of the coastal fleet on term contracts, we expect a significant step up in revenues and margins through the remainder of the year. For all of 2025, we expect revenues to increase in the high single to low double-digit range compared to 2024. Coastal operating margins are expected to improve to the mid-teens range on a full year basis. In the Distribution and Services segment, we still see mix results as near-term volatility driven by supply issues, customers deferring maintenance and lower overall levels of activity in oil and gas, partially being offset by orders for power gen. In Commercial and Industrial, the demand outlook in Marine repair remains steady, while On Highway service and repair remains weak. In Oil and Gas, we expect revenues to be down in the high single to low double-digit range as the shift away from conventional frac to e-frac continues to take place and customers continue to maintain considerable capital discipline. In power generation, we anticipate continued strong growth in orders as data center demand and the need for backup power is very strong. We expect extended lead times for certain OEM products to continue and it will contribute to volatility in the delivery schedule of new products throughout 2025. Overall, we expect total segment revenues to be flat to slightly down on a full year basis with operating margins in the high single digits, but very slightly lower than they were a year ago. To conclude, we are off to a solid start in 2025 and have a favorable outlook for the remainder of the year. Our balance sheet is strong and we expect to generate significant free cash flow despite high levels of CapEx this year. Absent acquisitions, we would expect to use the majority of free cash flow for share repurchases. We see favorable markets continuing and expect our businesses will produce improving financial results as we move through the year. And 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. We are now ready to take questions.

Thank you. [Operator Instructions] Our first question comes from Jonathan Chappell from Evercore ISI. Please go ahead.

Thank you. Good morning.

Hey, good morning.

David, I want to ask about not so much the acquisition that you announced this morning, but more the path forward. It seems like we're in this interesting spot in inland where you're well off the bottom. The outlook is still pretty bright, but there's a lot of uncertainty kind of in the broader market and the macro. I imagine input costs and maintenance costs continue to go up. Are you seeing more opportunities kind of being tickled from the tree now, where your balance sheet can provide you with a little bit more optionality on the M&A front?

Yes. The short answer is yes. I would say the environment is more constructive in terms of acquisition opportunities. But as you know, John, it's really hard to predict those. But the environment is better than we've seen in the last three or four years for sure. And obviously, from a capital deployment standpoint, and again that's our first priority. We'd love to do a consolidating marine acquisition. And as you would expect, we're always on the looking out for those type of opportunities. That said, as you've seen, absent that, we're going to deploy our free cash and buyback stock. That's it's pretty easy for us to buy the barge company we know the most about. But that said, our first priority would be trying to get a consolidating acquisition, if possible. And the environment feels a lot better for that right now.

Okay. That's clear. Just for my follow-up, pivot to D&S, and then kind of a two parter here. You mentioned the cost controls and your margins were better than we expected, I think, than probably you expected in the first quarter yet the full year guide's about the same. So one, is there some stickiness to those cost controls that can maybe even in a protracted soft oil and gas market help fulfill your margin? And secondly, it just it feels like there's always building backlog, building backlog, building backlog and delays. Are we getting close to the point where this backlog really starts to translate into some revenue acceleration across any of the different segments within that category?

Got it. Yes. Thank you. Thanks, David. Thanks, Christian.

Take care, John.

Thank you. One moment for our next question. Our next question comes from Daniel Imbro from Stephens. Please go ahead.

David, maybe on the inland side, if we start there, it's good to see barge utilization and spot pricing continue to pick up. I guess, can you talk about maybe where we exited 1Q on both utilization and spot? And then related, contract pricing was up mid singles. How did that exit the first quarter? And how should we expect that to trend just given the strength we've seen in all the pricing and utilization?

Dan, that's all really helpful color. I appreciate the detail. And maybe just then from a follow-up related to that. On the inland margin, if I put all those pieces together, it sounds supportive. I think 1Q out margins were actually flat from 4Q despite the big increase in delay days. So if utilization and pricing are improving, hopefully delay days don't get sequentially worse. How should we expect inland margins to progress off this 20% level in 1Q as you move through the year to get to that full year guide of 200 to 300 basis points?

Thank you. Our next question comes from Scott Group from Wolfe Research. Please go ahead.

Hey, thanks. I just want to follow-up with that last comment you made about spot being above term. I know it sounds like there's not a lot of repricing activity in Q1, but why only a 3% to 5% increase in contract rate given sort of everything that you're talking about?

Yes. It's just a small set of contracts that renewed and every customer has a little different angle. But look, we're very positive with where we're at right now. And we would always like higher contract pricing, but we do have sophisticated customers and they do tend to play us off each other. But we're very constructive about continued pricing improvements.

Okay. And then you mentioned trade flows and tariffs. I'm just curious how you see this playing out and where you see the risks. Are there any opportunities? And then just more broadly on everything going on, like the administration seems to be trying to incentivize U.S. shipbuilding. I don't know how you think about that impacting you.

Appreciate it, guys. Thank you.

Thank you. Our next question comes from Ken Hoexter from Bank of America. Please go ahead.

Hey, good morning.

Good morning.

So you did not kind of directly, I guess, address your EPS growth target in 25% in the release that you set in the fourth quarter. Just wondering if there was any reason for that. Are you pulling it? Are you changing it to 15% to 25% growth target? And then secondly, I guess on rates, I understand the delay days and it absorbs capacity. So when that capacity gets freed up and you don't have the delay days, will we see additional pressure on yields? Is that something that you see as the capacity gets freed up? Maybe just I guess, stress that and then I'll follow-up.

Yes. The question would be, do the competitors get more aggressive? Look, Christian and his ops team are the preferred supplier out there, and people generally want to work with us reputationally and because we do a lot to save our customers money. So there could be a small competitive impact, but I think having more barge days to sell right now in our outlook, we're not worried at all, Ken.

Yes. And then can you relay that, I guess, to the number of shipyard days at Coastwise and what we could see as in the acceleration into the second quarter and beyond?

Yes. I mean, we're we had a very heavy first quarter. We're starting to get that equipment back in. You will see the coastal margins progress up each quarter going forward. I don't want to give you specific margin guidance, but our coastal business is about to really start to generate margins. Christian and I kind of joke with our team that we got to get coastal margins above inland margins. So there's a little healthy competition internally here. But once we get these big shipyards done, you can imagine having a big ATB unit that's earning $40,000, $50,000 dollars a day in a 120-day shipyard. That's a lot of revenue that's not there, but the cost is still there. So that's about to reverse. And second quarter will be a lot better than first quarter, third quarter will be even better than second quarter. So the progression is there, Ken.

Yes. And Ken, just to add on that, I mean, it is a much more constructive environment for acquisitions right now. But yes, predicting one is a tough thing to do.

Our next question comes from Sherif Elmaghrabi from BTIG. Please go ahead.

Hey, good morning. Thanks for taking my questions. First quick follow-up on Scott's question. I believe it was Scott. I believe that in the past Q4, it's historically been a big quarter for inland fleet re-pricings. Can you just give us an update on is that the case this year or should we expect a different cadence?

No. I mean, our as you might imagine, most companies' contract portfolios are kind of year end calendar. And for us, the fourth quarter is always a big quarter for term contract renewals. Sometimes they slip. Somebody will say, hey, give us another month and we need to go get some more approvals. But no, it hasn't changed, Sherif. You should expect our fourth quarter renewal portfolio to that's the largest renewal. It's probably 40% of the contract renewals occur in that fourth quarter. The first quarter is usually one of the lighter ones.

That's great. Thanks for taking my questions.

Thank you. One moment for our next question. Our next question comes from Greg Wasikowski from Webber Research and Advisory. Please go ahead.

Hey. Good morning, guys. How are you doing?

Hey. Good morning, Greg.

Yeah. I wanted to follow-up on, Ken and John's questions from earlier on the M&A environment. David, what exactly has made it a more construction and or more constructive environment now versus the past few years? I would have thought that given that there hasn't been a ton of struggle in the past few years relative to the past down cycles and prices seem to have gone nowhere but up. I just would have thought it'd be harder to find the right opportunity at the right price. So maybe can you just tell me how I'm wrong there?

No, no. It's so -- willing sellers, they don't want to sell at the bottom. Right? And right now they're thinking, “hey look things are things are better. If I do sell, I'm not selling at the bottom. I may be selling kind of mid cycle and that's okay”. They know, look, that with the financing market and whatnot, just life is more difficult. So they might think that now is a better time to sell. But the conversations are up for sure, but there's still a bit off for spread. There's always a bit off for spread and we just need it to narrow, but at least the conversations are happening. I think post COVID, everybody wanted to kind of get their feet back on the ground that maybe pay down some debt. And now it just feels like the conversations are just a little more constructive. But again, it's so hard to predict the acquisitions. It's a price discovery type process and a lot of people have a lifestyle too that they're thinking about whether they want to give it up or cash out. So you just never know. I'm not trying to be cagey or avoid the question. It's everybody's got a little different angle on what they're looking for and why they might look for it.

Okay. That makes sense. Is it fair to kind of characterize that market as being maybe two ends of the spectrum, one being distressed sellers, which is, I guess, probably what we're more familiar with your more impactful acquisitions of the past, versus the other end of the spectrum, which would be more like opportunistic exits. And the past few years has maybe been somewhere in the middle, where it's been a little bit more muddy and now it's getting more towards that more positive end of opportunistic exits. Is that fair to think about it that way?

It could be. Yes. I don't think that's an unfair characterization at all.

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

Thank you, operator, and thanks again for everyone for joining us today. As always, feel free to reach out to me throughout the day and next week if there's any follow-up questions.