Good morning, and welcome to the Kirby Corporation 2020 Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Eric Holcomb, Kirby's VP of Investor Relations. Please go ahead.

Good morning, and thank you for joining us. With me today are David Grzebinski, Kirby's President and Chief Executive Officer; and Bill Harvey, 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 Web site at kirbycorp.com. 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 Web site 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, including the impact of the COVID-19 pandemic, and the related response of governments on global and regional market conditions and the company's businesses. A list of these risk factors can be found in Kirby's Form 10-K for the year ended December 31, 2019, and in subsequent quarterly filings on Form 10-Q. I'll now turn the call over to David.

Thank you, Eric, and good morning everyone. Earlier today we announced 2020 fourth quarter earnings of $0.37 per share. The quarter's results were impacted by the COVID-19 pandemic, which reduced demand for Kirby's products and services, particularly in Marine Transportation, where we experienced low volumes and continued poor market dynamics and poor barge utilization. Across the company, we have tightly managed costs, which has helped maintain overall Marine Transportation margins near 10%, and distribution and service margins near breakeven. Our fourth quarter earnings also included a tax benefit as a result of the CARES Act, which Bill will discuss in a few minutes. Looking at our segments, in Marine Transportation, the inland and coastal markets experienced challenging market conditions, with low demand particularly for the transportation of refined products, crude oil, and black oil. Although the economy showed some modest signs of improvement during the quarter, increasing cases of COVID-19, high product inventories, and impacts from two Gulf Coast hurricanes contributed to a slight sequential decline in quarterly average refinery utilization. During the quarter, refinery utilization averaged 77%, compared to a previous five-year fourth quarter average of 90%, and it ended the quarter at 80%. Chemical plant utilization modestly improved 1% sequentially, but remained below 2019 levels. Overall, for our inland and coastal businesses there were minimal spot requirements, low barge utilization, and additional pricing pressures throughout the quarter. In Distribution and Services, fourth quarter revenues sequentially improved, benefiting from the continued economic recovery, higher product sales in commercial and industrial, and some pickup in activity in oil and gas distribution. In the commercial and industrial markets, we experienced increased demand for parts and service in the on-highway and power generation businesses, higher product sales in Thermo King, and increased deliveries of new marine engines. These gains were partially offset however by normal seasonality, including lower utilization in power generation rental fleet following the hurricane season, as well as reduced major overhauls in marine repair during the harvest in the dry cargo market. In the oil and gas market activity continued to recover as many E&Ps modestly increased spending during the fourth quarter, and well completion activity improved. Active frac crews, which bottomed around 50 in the second quarter, improved every month during the fourth quarter, and finished the year in excess of 150. This activity improvement contributed to higher demand for new transmissions, parts, and service in our distribution businesses. In manufacturing, remanufacturing activity was steady, and we received additional new order for environmental-friendly fracturing equipment. In a few moments I'll talk about our outlook for 2021, but before I do I'll turn the call over to Bill to discuss our fourth quarter segment results and the balance sheet.

Thank you, David, and good morning everyone. In the fourth quarter, Marine Transportation revenues were $299.4 million, with an operating income of $29.2 million and an operating margin of 9.7%. Compared to the 2020 third quarter, marine revenues declined $21.2 million or 7%, and operating income declined $3.2 million. The reductions are primarily due to significantly reduced pricing in inland, reductions in inland barge utilization, and increased delay days as a result of seasonal weather. Aggressive cost reductions helped to limit the impact on operating margin. During the quarter, the inland business contributed approximately 75% of segment revenue. Average barge utilization declined modestly into the high 60% range as a result of the second wave of COVID-19, continued weak refinery utilization in an extended hurricane season. Long-term inland marine transportation contracts are those contracts with a term of one year or longer, contributed approximately 70% of revenue, with 62% from time charters and 38% from contracts of affreightment. Term contracts that renewed during the fourth quarter were down in the low double digits on average. Spot market rates declined approximately 10% sequentially, and 25% year-on-year. During the fourth quarter, the operating margin in the inland business was in the low-to-mid teens. In coastal, the market continued to be challenged by significantly reduced demand for refined products and black oil. We experienced weak spot market dynamics, and some chartered equipment was returned as term contracts expired. During the quarter, coastal barge utilization was in the mid-70% range, unchanged sequentially but down from the mid-80% range in the 2019 fourth quarter. Average spot market rates were generally stable, but term contracts continued to renew lower in the mid-single digits. During the fourth quarter, the percentage of coastal revenues under term contracts was approximately 85%, of which approximately 85% were time charters. Coastal's…

Thank you, Bill. With 2021 in the rearview mirror, it goes without saying we are all hopeful for brighter days in the New Year. As we look at our businesses thus far in '21, we believe some green shoots are materializing. In Marine Transportation, refinery utilization has steadily improved into the low 80% range. Inland spot activity has modestly picked up. And our barge utilization has bounced off of the bottom into the low to mid 70%. Demand in Distribution and Services has continued to recover with an improving economy and more favorable commodity prices. While all of this is encouraging, the reality is that we are still in the midst of a global pandemic. Demand for our products and services are still near all time lows and uncertainty around the timing of material economic recovery remains. All of this makes predicting 2021 very challenging with a wide range of possible outcomes. In the near term, we expect tough market conditions to persist into the second quarter particularly in Marine Transportation where industry barge utilization is very low and we are experiencing very competitive pricing dynamics. As well, the latest wave of COVID-19 cases has resulted in some challenges crewing our vessels particularly in coastal. In Distribution and Service, the magnitude and timing of the recovery is dependent on economic recovery and stability in the oil & gas markets. That been said, although we are starting the year with near term pressures and uncertainty, we are very optimistic that the second-half of 2021 will be materially better. In the meantime, we intend to remain very focused on cost control, capital discipline, cash generation, and debt reduction. Diving into the businesses, in the inland market we expect the current challenging market dynamics to continue in the near term with gradual improvement…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Jack Atkins with Stephens. Your line is now open.

Hey guys, good morning. Thank you for taking my questions.

Yes, good morning, Jack.

Hi, Jack.

So, David, maybe if we could start with one of your closing points there at the end, just around industry capacity. And I'd be curious to hear your thoughts on both inland and coastal. But I think we went into this downturn with about, call it, 3,900 inland barges. Where do you think we're going to stand maybe at the end of 2021? How much capacity do you think the industry is going to take out just because of the difficulty we've seen over the last 12 to 18 months? And then I'd be curious to get your thoughts kind of looking at the coastal market the same way, how much capacity do you think is going to come out by the time we get to the other side of this?

Yes, so the number of new barge deliveries in 2020 was approximately 140 to 145. I think if you look at Sander Toth, who does River Transport News, his number was 143. We think that's about right. The retirements are what we don't know. I will tell you this, and because we do know Kirby's numbers, we had originally planned to retire only 10 barges in 2020. We ended up retiring about 95. So our retirement alone made a significant dent in that impact of new barges. But I would say this, I fully expect the number of retirements will be north of 150 to maybe even north of 200 retirements in 2020, we'll see. Informant does a survey that comes out in March or April, and we'll get a better feel for the retirement. When we look at 2021, we know that there were 36 barges that carried over into 2021 that weren't delivered -- that were ordered pre-pandemic. So there's not a lot of new construction on the horizon, and retirements are continuing. We know just from out network that there has been a lot of retirements; we just don't have a good number on it. So, net-net, I think barge capacity goes down considerably in -- and considerably is hard to quantify, but it'll be meaningful for 2021. And Jack, as we said in our prepared remarks, just prior to the pandemic, Kirby's utilization was at an all-time. We were over 95% utilized. So that should bode well when demand comes back. But on the new build side, one, steel prices -- scrap steel prices are up, that's actually helped the retirement, but it also has raised the cost of new barges. We're hearing in the market that just a new barge, whether it's a 10,000 barrel or a 30,000 barrel or a black oil or a clean barge, that because of steel prices and other costs, that those are -- the pricing of new barges us up 25% to 35%. So that to me is a very good sign. That means it's going to be very expensive to build new capacity. So we're pretty bullish on the supply and demand situation on the inland side. And I would say it's even better on the coastal side. There's really no new capacity coming in. OSG had a couple units that they had built for replacement, those essentially have delivered. There's nothing really on order that I'm aware of. And I think that there's a very long lead time, right. I mean if you're going to order an offshore barge it's -- even if you had the design in the drawer, it's probably at least two years before you would get it. So I think the elasticity in the coastal business is going to be even greater when it comes back. So, we're pretty happy with the supply and demand situation right now.

Okay, that's helpful. Thank you, David. And I guess just for my follow-up question, kind of thinking about the balance sheet and cash flow. You're going to, hopefully if everything goes according to plan, in 2021, with net debt somewhere in the, call it, $1.1 billion-ish dollar range, has the last couple of downturns in the barge market that we're seen since the end of 2014, has that changed the way you guys are thinking about your capital structure long-term, and the amount of debt that you want to hold on the balance sheet? Has anything changed long-term, David or Bill, just curious to get your thoughts around the capital structure and how you plan on looking at that in the future?

No, Jack, I don't think anything has changed materially. As we all know at the end of the year our debt-to-cap was about 32%. And using the numbers you just talked about the cash flow from this year, we get down to as low as the mid-20s. And that's a pretty conservative approach. We do want to direct in the short-term cash flow to reduce debt and increase liquidity. But although -- if you step back and look at the metrics of the company, they're moving the right way and they're moving the right way pretty quickly.

Okay. That's helpful. Thanks for the time, guys.

All right, thanks, Jack.

Thank you. The next question comes from Jon Chappell with Evercore. Your line is now open.

Thank you. Good morning, everybody.

Good morning, Jon.

David, you laid out a kind of a tale of two halves. You, right now, on the inland business and also laid out the difference in 12 months in the contractual renewal pricing. So, kind of a two-parter, one, how much of your business -- your book of business in inland comes up for contract renewal in the first-half of the year, which probably may be a little bit softer. And two, what's your appetite and maybe the appetite of your customers to take shorter-term contract renewals so that you're not walking in, in kind of the trough of the market and missing out on the beginning of the upturn in the second-half of the year?

Yes, good question, Jon. Our renewals typically are ratable through the year, with the fourth quarter being the heaviest. If there's one quarter that's heavy it's the fourth quarter because everybody kind of has a year-end mindset -- or there's a lot of year-end mindsets. So when we look at renewals it's not particularly heavy here in the first-half. I would say, look, you've heard the numbers, we're not hiding from them in our prepared remarks, that spot pricing was down 10% sequentially, and 25% year-over-year. And term pricing was down kind of low double digits on renewals in the fourth quarter. So, look, that is part of our message today is that margins are going to be under pressure this year as those prices roll through, but to your point that will change as utility goes up, pricing should start to go the other direction, and we have a pretty big spot portfolio, right now we're about 30% spot, 70% contract. And that's going to give us a good bit of equipment that can rise pretty quickly. And then, there's the contracts that do renew in the first-half, you know, those will be pretty low, but then the second-half should be better. So, we should get as prices rise it should come through pretty quick, but as you've seen in the past, it takes about a year for things to roll through in the margin, both on the up and then on the downside. So, it will take some while, but we do have that big slug of spot equipment that can re-price pretty quickly.

Okay, that's helpful. And then, second follow-up, just completely switching gears, when you made the Stewart & Stevenson acquisition, there was a lot of I think cost synergies that you had identified, and I think this downturn has probably accelerated, or maybe even helped you exceed some of those cost targets, with a little bit of green shoots in the oil patch with consolidation kind of picking up and with you having about as lean of a structure as you can possibly have in that business. When you think about the next couple of years, do you think that you're long for the business or maybe the complete opposite, now that you have this kind of hopefully lean structure that the benefits from an upturn, is there more to do as far as capital deployment in that business?

Yes, I don't think you'll see us deploy new capital there. What you will see, and this will take some time for us to roll-out, we've invested in R&D and new product development. We alluded to it in the prepared comments. Look, electrification is happening, and Stewart & Stevenson in particular has some great technology and know-how and engineering resources, and we've got some really good ESG-centric products that are rolling out. So, we're pretty excited about that. Some of that is being applied to the oil field. As you know, we've made a lot of electric tracks over the years, and those are the kind of the one style of electric track is to use gas turbines to drive electric drive, and then to a pump, but there's basically electric grids now that can drive electric pumps, and using natural gas generation to generate the electric power, we're right in the square, middle of that, and that's getting some traction. But also, importantly, those electrification products can be used well outside the oil field. And we're working hard on that. It's not anything, we're ready to give you numbers for you to build into your model, but I will tell you, it's moving along with a lot of speed. And there's a lot of excitement in the company about that. So when you're all out together with a lean cost structure, a rebound in the economy and commercial and industrial being about 75% of distribution and services. We're pretty excited about it. Now does that mean we put new capital in there? No, I think that's one of the great things about D&S is it doesn't require a lot of capital, it's got a pretty low capital base, it's generally is around working capital is where you deploy the capital. So that's probably a long non-answer. But yes, I would characterize it as we're pretty excited about what we've got in front of us. We made a lot of good changes, a lot of investments during 2020. And I think KDS is poised to really contribute to the Kirby's bottom line.

Okay, I really appreciate that. Thank you, David.

Thanks, John.

Thank you. The next question comes from Ken Hoexter with Bank of America. Your line is now open.

Great, good morning, Dave, Bill, and Eric.

Good morning, Ken.

Good morning, coastal sounds like a hard event, hard environment. But let's stick with inland first when you walk through your thoughts on the environment, so you've mentioned some new capacity, continued retirements, but utilization at refineries creeping up from lows. Maybe you can talk a bit about how long did it take for you to see that in rates, is it something we -- you're talking about a quarter or is it longer than that? How long does it typically take to see that, that environment change?

Yes. That's a good question. Right now -- well, let me talk to utilization for a quick second, because that, that is what drives pricing, right? The view that utilization is tightening and it is tightening, and that it's going to continue for a while. That, that mindset is what helps drive pricing. Our utilization in the fourth quarter kind of dip to the high 60%, which is the lowest we've ever seen it, but we're starting to see it in the low 70s now. I think we're between 70% and 75% utility, and it keeps inching up. Part of that to your point is refinery utilization coming back? We've seen refinery utilization take up, but be careful with refinery utilization because there's a mathematical thing going on as they shut down some of the refineries the denominator fell a bit. So even though the nameplate utilization is higher, it's probably 2% to 3% higher than on a constant capacity basis, but the key is that that refinery utilization keeps taking up, which helps our utility on the volumes we move. And so, we're starting to see it climb very encouraged with where utilities going so far this year. And I don't see anything on the horizon that says that's not going to continue. And it won't take long to get pricing to, to stop its decline and to start its climb. I wish I could give you a definitive date, does that happened in the first quarter or the second quarter or even the third quarter? I'm not sure, but I do think it happens this year and I think it will move pretty quickly because the -- yes, there hasn't been a lot of building as, as we talked about earlier that the supply and demand balance should tighten really rapidly and that that should get pricing going on the other direction rather quickly. Sorry, I can't be more definitive on that. And you mentioned coastal having a tough time. It's the same dynamic in coastal, except I actually think the last testacy in coastal's is stronger, because they're just bigger units and they move further. Now that said though, as you know coastal is a lot more refined products, so it's been impacted a little harder in terms of structure of the industry than the inland, but again I think the same dynamics hold as utility comes up, you'll see pricing stamp back pretty quickly. And you'll see things go back on contract. We've seen more equipment moved from term to spot, because our customers just didn't have the volumes. We look forward to that changing and I think it's starting to change now. I mean the encouraging thing we saw in the COVID statistics is there was a pretty strong downward trend in number of new infections. So I guess it looks like everything's heading in the right direction.

Thanks, Dave. Yes, I guess just a quick follow-up on that though. You've just digging into coastal, how critical is that staffing issue? Does it become as it is a pay issue or you just can't get the operators out there? Are you seeing because that vessels park or -- that just kind of a side comment, it's more lack of demand?

Yes. It's more lock of a demand for sure, but we have had impact. So what can happen? These coastal vessels they're not close to the land a lot of times, and so they can be out on a voyage that -- and if you get a case that that can't comes through it. In fact the whole crew or even if it's just one member of the crew you've got to divert the vessel back to shore, re-crew and sterilize the whole vessels. So, on these very expensive units, you can use a week's chart or higher just going through that process of getting it to shore, getting the crew off, re-crewing it after you sanitize it. So, yes, it can be meaningful if we -- if he get a lot of that and we've had some, we've had some in the fourth quarter, we've had some in the first quarter, take a unit that's earning $30,000-$40,000 a day, and you lose that for a week, it starts to add up pretty quickly. But the bigger issue is just the demand decline that had happened and our hope is that's about to turn the other direction.

Great, thanks. I appreciate your time.

Thanks, Ken.

Thank you. The next question comes from Randy Giveans with Jefferies. Your line is now open.

Hi gentlemen, how is it going?

Great. How are you doing?

Great. So, just looking at D&S and kind of run rate going forward, it fell back to a loss in the fourth quarter from a slight gain in the third quarter. So, maybe what drove this sequential decline, and then following the ongoing cost reductions, when do you expect another quarterly profit in this segment?

Yes, the sequential decline -- yes, we foreshadowed, we talked about it, but a big part of it is, we have some seasonality in the fourth quarter versus the third quarter. In the third quarter, you typically get a lot of rental income on our generation because of the hurricane season. And that carries over a little bit into the fourth quarter, but typically we'll see our rental utilization fall in the fourth quarter for power -- standby backup power that gets deployed during hurricane season that happened in the fourth quarter as we predicted. So that's part of it. The other part of it is our Marine repair -- diesel engine Marine repair and gearbox repair business has some seasonality in the fourth quarter as well because the dry cargo fleet goes to work in the fourth quarter to move the harvest. So basically we get a little more business in the third quarter and then the dry cargo operators put all their equipment to work. And so we don't have repair work in the fourth quarter, so both of those contribute to the seasonality that we see in the sequential decline. Some of that will start to reverse. In the first quarter, you'll see some more maintenance on the Marine repair, but hopefully we don't have any hurricane season first quarter, so we'll get some snap back on that. But what really is going help D&S is some of the product deliveries and the U.S. economy coming back, we sell a lot of spare parts and a lot of truck parts and a lot of backup power. A lot of bus repair, all of that is economic driven and as the economy comes back, that should start to drive the profitability. And then in oil and gas, we took some orders in the fourth quarter. Those will start to deliver in the first and second quarter. So we should start to see some profitability from that. In terms of when do we go profitable in the quarter, I'm not prepared to say that, but I think we've said for the full-year, we expect D&S to be kind of low-to-mid single digit, operating margins with revenue up. And I'll give you a little feel for revenue. It could be up 10% to 30% just depending on when the U.S. economy starts to get really humming. So, we're pretty optimistic about KDS for 2021.

Got it, okay. And then turn into like acquisitions and growth, clearly movie theaters, video game stores they're getting all the love right now, but not saying you should expand into those businesses, but any appetite for acquisitions in the inland barge market, keep the streak of annual barge consolidation going, and then what about expansion into maybe offshore or wind and LNG?

Yes, great question. Look, as Bill said, we're focused on shoring up our balance sheet, getting it a little stronger until we get out of this pandemic. So we'll de-lever some more, we always do like to do consolidating acquisitions, but that's just on the table until we get out of this kind of pandemic and this uncertainty and get a little more visibility. But you did bring up wind and that is an exciting area. I think if you look at some of the plans particularly on the East coast, the number of projects is enormous. I think there is -- what is it? 28 gig of wind power that's planned, that's an enormous amount of work for Jones Act compliant vessels. The good news is President Biden came out in support of the Jones Act just recently, I think there'll be opportunities for Jones Act, marine companies to support the development of wind. And that can take, there's number of different types of vessels that can go out there, there're the installation type vessels, there's transportation to get the equipment out to the sites where the windmills are, and then of course, there's maintenance and repair and crewing vessels. So, that could be a significant growth area. Clearly, Kirby is looking at that, we're one of the largest marine companies in the United States. We're in discussions, we're not liberty to really say much more than that, but it could be a meaningful growth opportunity. But as you know, Randy, Kirby is very disciplined about its capital deployment, and we'll be smart. And make sure we've got good prospects with decent contract cover before we need to deploy significant capital.

Yes, I would assume that would be the case. So, good to hear, thanks so much.

Thanks, Randy.

Thank you. The next question comes from Greg Lewis with BTIG. Your line is now open.

Hey, thanks, and good morning, everybody.

Good morning.

David, I'm going to ask a question around competitors. I mean, you touched on it like, "Hey, before pre-COVID, you guys were getting inland margins up into the 20% range," but really that was kind of like what maybe a 90, 120-day period, where if we were to look back over the last five years, it's really been a challenging market and maybe not to call out specific competitors, but at this stage of basically a five-year extended downturn, but there are competitors that it's been very public, that Bouchard has a lot of equipment that's not really operating as they go through what they're going through, but is there any kind can you paint a similar picture to any companies without mentioning names? Is that happening at all in the inland side, or when we look at the inland fleet maybe companies are more stronger than we think for? I'm just trying to get a feel for that.

Yes, sure. Let me just ramble for a second. Of course, you know on the inland side, the ACL had had gone through a bankruptcy, they were just over levered and they were trying to do their best and did their best, they just had way too much leverage for the downturn that we went through. I think there are a number of companies that are severely levered right now, but as you know, we were able to pick-up Higman, because they were overlevered in a declining market. And so, it's out there. The bankruptcies, it always seems like they can last longer than you would think, when they get over levered. But certainly, there are some people that are very, very stressed here in this current environment. We've seen some pricing go down below cash costs, which is very frustrating, right? That either they're desperate or they don't really understand their cost structure in order to do that, but it's a sign of how bad the market got, I'm encouraged with what we're seeing in utility. And I think I think it'll come back pretty quickly. We're starting to see the utility move north, which was really good, but there are undoubtedly, some people out there that are close to bankruptcy. It's probably good not to comment specifically about anybody, whether it's on the inland side or the office side. I mean you mentioned one of them, anyway. Yes, it has been five years. It's been a tough five years. But again, I think we're part of a critical infrastructure to run the U.S. economy. And ultimately, things come back. We were starting that as you said, I know it was only 120 days but things were all moving in the right direction before this COVID pandemic.

And Greg, I might add that I don't think we can point our fingers at competitors with respect to the downturn. It was no relation to competitors. There was some building but not meaningful. It was really due to the pandemic and the onetime drop in demand, and it wasn't competitor action. Now we may like that some of them maybe hit the bottom, but this is an unprecedented decline. It's simply something the industry has never seen and a lot of industries have never seen a decline like this.

Yes, no doubt. And then just shifting gears, I mean clearly there is going to be some opportunities on the D&S side. It's interesting that as you think about some of your customers that operate in the oil patch, sometimes it's tough to let go off existing equipment. And so, clearly there is going to be an opportunity for new equipment as there is replacement, but is there anything that D&S or Kirby or Stewart & Stevenson in terms of maybe retrofitting some existing equipment to kind of start moving it towards more environmentally friendly. Is that something that the company is looking at, or is more, hey, as older stuff gets retired we just replace it with more environmentally friendly stuff? Thanks.

Yes. No, you are right. We have done a lot of upgrades is what I would call either going from old tier engines to new tier four engines upgrades. Then some pretty hefty orders that we've converted the lot of just standard diesel engines over to bio fuel. Caterpillar has the dynamic gas blending engine which can run up to about 80% natural gas with diesel and have no methane slip. So, we have done a lot of that -- those kinds of convergence, and I would tell you almost all the new construction has been bio fuel or electric, and RN bound in the fourth quarter was around off of that. So, you are spot on. There are a lot of ESG-driven upgrades which actually do give the owners lower cost of operation. Electric has a little less maintenance. And these bio fuel engines give them less cost in terms of fuel. Natural gas is still pretty cheap. And so there have been of convergences. That continues to grow is the way I would say I don't think you'll see conventional frac units in the near future.

Okay, great. Thanks very much everybody.

Okay. Thanks, Greg.

Thank you. The next question comes from Ben Nolan with Stifel. Your line is now open.

Hey, good morning, guys.

Hey, Ben.

Hey. I wanted to follow up just as you are looking at -- and David, you kind of mentioned this when you talked about sort of the problem with calculating refinery utilization, but there has been a handful of refinery that have closed down, and who knows whether or not they will come back, but is there anything out there from a refinery utilization standpoint or just a refinery capacity standpoint that you think has permanently changed in terms of what underlying barge demand might be? Some of these refineries that are gone, I mean are they meaningful long-term impactor for barge?

No. I think the large very efficient refiners are the survivors. The ones with very complex integrated capabilities, they are going to be survivors. I think some of the smaller ones have shutdown because perhaps they are not as efficient. So, that's what you would expect. The older plants get shutdown first. And whether they restart or not, we'll see. We have heard that there is one refinery that's looking to restart. And that's really good news because it had some barge utility with it. So, some of them will restart. I don't think all of them will restart. I think some of them were inherently disadvantaged from a refinery complexity standpoint and refinery efficiency standpoint. The other thing is you're seeing bio fuel and other environmentally-friendly products that that our refining customers are adding to their portfolios. And we're starting to see some of those type moves emerge. So I don't think there is anything systemically that makes it all go away. EVs obviously will have a longer-term impact, but there is a debate about how long that takes and if some of that demand destruction is absorbed or replaced by emerging markets demand growth. If you think of the developing economies, typically they start to burn more energy as they developed and I don't think that that phenomena changes. So, but longer-term obviously we're all thinking about the impact of EVs and what that can do to demand, but I think it's got multiple years, if not decades to play out. I know some friends with EVs, but they also have a suburban in their garage. So I think it's got a ways to play out.

Right, right. Well, yes, you mix the word. If you can mix the word hydrogen in the conversation here, you add 10% to your share price. So maybe that would help it.

Well, we've talked about changing our name to Kirby game stop.

There you go. Switching gear a little bit over to D&S, it sounds like things are starting, especially on the industrial side of the business. It sounds like they're starting to normalize a typical seasonality, but you've done some acquisitions there, obviously there has been a lot of costs that's been pulled out of the whole system longer-term. Has your thinking changed at all with respect to what you think your operating margins might be able to look like there? Is this still sort of mid to high single-digit, call it mid cycle run rate operating business or is there any chance that you've been able to fine tune that business enough, so that you can kind of eke out an extra 3% to 4% something like that?

Yes, I sure would like to say that our cost structure and things that we did systemically to consolidate management teams, take out costs, add frankly IT systems, ERP systems, online platforms, the cost to serve customers is dropping. So we should be able to get some margin expansion, but I'm just -- we got to see the recovery here before I'm ready to commit to that, but I will tell you our team is doing a fantastic job preparing for the U.S. economy coming back. They're ready. And I think we should have some positive margin leverage just -- for us to pencil it out. It's a little difficult right now.

Got it. All right. I appreciate it. Thank you.

Thank you.

All right. Thanks, Ben, and thanks everyone. Unfortunately, we've run out of time. Thanks for joining our call today. If you have any additional questions feel free to reach me today, 713-435-1545. Thanks, everyone. Have a great day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.