Kirby Corporation

Good day and thank you for standing by. Welcome to Kirby Corporation 2026 first quarter earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Matt Caron. Please go ahead.

Good morning, and thank you for joining the Kirby Corporation 2026 First Quarter Earnings Call. With me today are David Grzybinski, Kirby's Chief Executive Officer, Christian O'Neill, 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. 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 in 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 are actual results to 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, Matt, and good morning, everyone. Earlier today, we announced first quarter earnings per share of $1.50, a 13% year-over-year increase compared to 2025's first quarter earnings per share of $1.33. Our first quarter results reflected improving market fundamentals in marine transportation with utilization and pricing strengthening as the quarter progressed, alongside continued strength underlying demand for power generation in distribution and services. While results were partially impacted by weather-related disruptions in navigational delays in our inland marine transportation operations, and ongoing OEM-related supply constraints in distribution and services, underlying demand conditions remain strong across both segments. Overall, our combined businesses executed well and generated positive momentum entering into the second quarter. In inland marine market, fundamentals improved throughout the quarter as customer demand strengthened Refinery utilization increased and barge availability remained limited. As expected, operations were impacted by typical seasonal weather, lock delays, and other navigational disruptions. However, market conditions became increasingly constructive with barge utilization strengthening as the quarter progressed and averaged in the low 90% range for the full quarter. Spot pricing improved in the low single digits sequentially, term contract renewals were flat to slightly up year over year, and pricing momentum continued to build during the quarter. Overall, the inland business delivered strong operating margins in the high teens range for the quarter, driven by improved pricing and disciplined execution. Entering the second quarter, demand visibility has continued to improve, supported by strong refinery utilization and improving conditions across petrochemical markets, contributing to strong utilization and improved pricing. Coastal marine transportation fundamentals remained strong throughout the first quarter, with barge utilization averaging in the mid to high 90% range, which was supported by steady customer demand and limited supply of large capacity vessels. This favorable supply-demand dynamic continued to drive pricing gains with term contract renewal rates rising in the 20% range year over year. Our team delivered strong operational execution and maintained a disciplined focus on cost and efficiency, and this resulted in operating margins in the high teens range. Turning to distribution and services, segment results reflected mixed conditions across our end markets, with power generation remaining a key growth driver. Segment revenues increased 12% year-over-year, but declined sequentially due to OEM engine availability and continued softness in conventional oil and gas activity. Operating income increased modestly year-over-year, though declined sequentially as margin performance varied across our businesses. In power generation, revenues grew 45% year-over-year from solid backlog execution and significant behind the meter power solutions. However, revenues declined sequentially as OEM engine deliveries were lower in the quarter. Operating income increased year over year, with margins remaining in the mid-single-digit range. In commercial and industrial, revenues increased 8% sequentially, and operating margins were in the high single-digit range, supported by strong marine repair activity and disciplined execution. In oil and gas, revenues improved 13% sequentially, though results continued to be pressured by softness in conventional oil and gas markets and resulted in margins in the mid-single-digit range. Overall, the segment remains well positioned with steady execution across a diverse portfolio of end markets. In summary, Kirby continues to operate from a position of strength. Marine transportation fundamentals remain constructive with high utilization and improved pricing across both inland and coastal markets. In distribution and services, strong activity in power generation and commercial and industrial markets continue to offset softness in our conventional oil and gas business. With this backdrop, combined with solid execution and ongoing cost discipline, We announced in this morning's press release that we are increasing our EPS guidance range for the year up 5% to up 15%, which is up from flat to up 12% previously. I will discuss our outlook in more detail in the call, but first I will turn it over to Raj to discuss the first quarter segment results balance sheet and capital allocation in more detail.