Fitch Affirms Kirby Corp.'s Senior Unsecured Debt Rating at 'BBB'.

Business Editors

CHICAGO--(BUSINESS WIRE)--May 21, 2003

Fitch Ratings has affirmed the senior unsecured debt rating of Kirby Corporation (NYSE: KEX) at 'BBB'. The Rating Outlook for Kirby remains Stable. The rating reflects Kirby's strong competitive position in the inland tank barge transportation industry, a proven ability to generate free cash flow, and a commitment to maintaining a healthy balance sheet with modest leverage.

Through a series of acquisitions over the last several years, Kirby has increased the size of its tank barge and tow boat fleet as many smaller competitors and captive shippers have exited the industry. While acquisition activity has periodically driven a need to seek external financing, the company has taken a disciplined approach to cash flow management by paying down debt and lowering leverage levels back to historical norms. Although Kirby operates in a cyclical industry, its capacity to generate solid operating cash flow has been resilient during the last two years of economic weakness.

Despite poor market conditions Kirby's operating performance has remained strong over the last several quarters. Operating margins in 2002 remained stable (16.6% versus 17.3% in 2001) despite depressed petrochemical transport volumes. Petrochemical volumes have shown gradual improvement over the last three quarters, and spot prices have improved 10% over the lows seen in the third quarter of 2002. Should the economy strengthen later this year, Kirby is in an excellent position to grow revenue while controlling unit costs through size-related efficiencies.

In 2002 Kirby made barge acquisitions totaling $45 million, with minimal impact on its credit profile. Following its acquisition of barges from SeaRiver Maritime in January 2003, the company issued $250 million of unsecured notes in a February private placement. Proceeds were used to repay outstanding balances on Kirby's revolving credit facility and a significant portion of its term loan (due in 2004). This transaction freed up Kirby's revolver to provide additional liquidity in the event that further acquisitions are made. Kirby has indicated its continuing desire to pursue strategic acquisitions when opportunities appear.

As of March 31, 2003, Kirby reported total debt (including current maturities) of $295.5 million on its balance sheet. Kirby's amortizing term loan ($37.5 million outstanding) matures in October 2004. As of May 9, Kirby had $133 million in availability under its revolving credit facility and $8.5 million in availability on its credit line from Bank of America to meet liquidity needs.

Kirby Corp. (NYSE: KEX) operates a fleet of 905 inland tank barges and 226 towing vessels, transporting chemicals, petrochemicals, black oil, refined products and agricultural chemicals on the U.S. inland waterway system. The marine transportation business accounts for 84% of total revenues. Kirby also offers after-market servicing of large, medium-speed diesel engines used in marine, power generation and rail applications. The diesel engine services unit contributes 16% of total revenues.