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| K-Sea Transportation Partners L.P. Announces Results for Fourth Quarter and Fiscal Year Ended June 30, 2008 |
NEW YORK--(BUSINESS WIRE)--Aug. 12, 2008--K-Sea Transportation Partners L.P. (NYSE: KSP) today announced its operating results and net income for the fourth fiscal quarter and year ended June 30, 2008. Net income for the fourth quarter was $6.4 million, or $0.45 per fully diluted limited partner unit, compared to $3.8 million, or $0.37 per unit, in the same period a year ago. For the full fiscal year, net income was $25.7 million, or $1.95 per fully diluted limited partner unit, compared to net income of $15.8 million, or $1.55 per fully diluted limited partner unit, for the year ended June 30, 2007. Operating income for the fourth quarter of fiscal 2008 was $11.8 million, compared to $7.8 million for the three months ended June 30, 2007. Operating income for fiscal 2008 was $45.6 million, compared to $30.7 million for fiscal 2007. Resolution of the depreciation issues referred to in the Company's August 5 announcement resulted in the recognition of $2.6 million in additional depreciation expense for the nine months ended March 31, 2008. This non-cash adjustment relates to the expensing of fixed asset costs for accounting purposes, and has no impact on distributable cash flow or EBITDA. The Company will file amended quarterly reports on Form 10-Q for each of the first three quarters of fiscal 2008 to restate the quarterly results for this depreciation expense adjustment. About K-Sea Transportation Partners K-Sea Transportation Partners is one of the largest coastwise tank barge operators in the United States. The Company provides refined petroleum products transportation, distribution and logistics services in the U.S. domestic marine transportation market, and its common units trade on the New York Stock Exchange under the symbol KSP. For additional information, please visit the Company's website, including the Investor Relations section, at www.k-sea.com . Use of Non-GAAP Financial Information The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, certain non-GAAP financial measures such as EBITDA and distributable cash flow are also presented. EBITDA is used as a supplemental financial measure of operating performance by management and by external users of financial statements to assess (a) the financial performance of the Company's assets and the Company's ability to generate cash sufficient to pay interest on indebtedness and make distributions to partners, (b) the Company's operating performance and return on invested capital as compared to other companies in the industry, and (c) compliance with certain financial covenants in the Company's debt agreements. Management believes distributable cash flow is useful as another measure of the Company's financial and operating performance, and its ability to declare and pay distributions to partners. Distributable cash flow does not represent the amount of cash required to be distributed under the Company's partnership agreement. Neither EBITDA nor distributable cash flow should be considered as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity under GAAP. EBITDA and distributable cash flow as presented herein may not be comparable to similarly titled measures of other companies. A reconciliation of each of these measures to net income, the most directly comparable GAAP measure, is presented in the tables below. Cautionary Statements This press release contains forward-looking statements, which include any statements that are not historical facts, such as the Company's expectations regarding business outlook, vessel utilization, delivery and integration of newbuild and acquired vessels (including the cost, timing and effects thereof), growth in earnings, distributable cash flow, expected distributions per unit, and future results of operations. These statements involve risks and uncertainties, including, but not limited to, insufficient cash from operations, a decline in demand for refined petroleum products, a decline in demand for tank vessel capacity, intense competition in the domestic tank barge industry, the occurrence of marine accidents or other hazards, the loss of any of the Company's largest customers, fluctuations in charter rates, delays or cost overruns in the construction of new vessels, failure to comply with the Jones Act, modification or elimination of the Jones Act and adverse developments in the marine transportation business and other factors detailed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. If one or more of these risks or uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
K-SEA TRANSPORTATION PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per unit data)
Three months ended Year ended
June 30, June 30,
2008 2007 2008 2007
--------- --------- --------- ---------
Voyage revenue $ 85,675 $ 57,449 $312,680 $216,924
Bareboat charter and other
revenue 4,419 2,554 13,600 9,650
--------- --------- --------- ---------
Total revenues 90,094 60,003 326,280 226,574
Voyage expenses 23,550 13,237 79,427 45,875
Vessel operating expenses 33,549 24,630 124,551 96,005
General and administrative
expenses 7,782 5,173 28,947 20,472
Depreciation and amortization 13,673 9,198 48,311 33,415
Net (gain) loss on disposal of
vessels (304) (64) (601) 102
--------- --------- --------- ---------
Total operating expenses 78,250 52,174 280,635 195,869
--------- --------- --------- ---------
Operating income 11,844 7,829 45,645 30,705
Interest expense, net 5,225 3,871 21,275 14,097
Other expense (income), net 75 (17) (1,827) (63)
--------- --------- --------- ---------
Income before provision for
income taxes 6,544 3,975 26,197 16,671
Provision for income taxes 183 183 529 851
--------- --------- --------- ---------
Net income $ 6,361 $ 3,792 $ 25,668 $ 15,820
========= ========= ========= =========
General partner's interest in
net income $ 93 $ 76 $ 405 $ 316
Limited partners' interest in:
Net income $ 6,268 $ 3,716 $ 25,263 $ 15,504
Net income per unit - basic$ 0.46 $ 0.37 $ 1.97 $ 1.56
- diluted $ 0.45 $ 0.37 $ 1.95 $ 1.55
Weighted average units
outstanding - basic 13,716 9,943 12,847 9,936
- diluted 13,819 10,020 12,952 10,020
Supplemental Operating Statistics
Three months ended Year ended
June 30, June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Local Trade:
Average daily rate (1) $7,439 $7,122 $7,070 $6,851
Net utilization (2) 82% 76% 80% 79%
Coastwise Trade:
Average daily rate $14,129 $13,048 $13,731 $12,375
Net utilization 88% 87% 87% 90%
Total Fleet
Average daily rate $11,784 $10,615 $11,334 $10,097
Net utilization 85% 82% 84% 85%
(1) Average daily rate is equal to the net voyage revenue earned by a
group of tank vessels during the period, divided by the number of
days worked by that group of tank vessels during the period.
(2) Net utilization is equal to the total number of days worked by a
group of tank vessels during the period, divided by total calendar
days for that group of tank vessels during the period.
K-SEA TRANSPORTATION PARTNERS L.P.
Reconciliation of Unaudited Non-GAAP Financial Measures to GAAP
Measures
(in thousands)
Distributable Cash Flow (1)
Three months ended Year ended
June 30, 2008 June 30, 2008
Net income $ 6,361 $ 25,668
Adjustments to reconcile net income
to distributable cash flow :
Depreciation and amortization (2) 13,815 48,819
Non cash compensation cost under long
term incentive plan 291 1,156
Adjust gain/loss on vessel sale to
net proceeds 276 1,592
Deferred income tax expense 45 477
Maintenance capital expenditures (3) (6,000) (22,700)
---------------- ------------
Distributable cash flow 14,788 55,012
================ ============
Cash distribution in respect of the
period $ 11,670 $ 44,593
Distribution coverage 1.27 x 1.23 x
(1) Distributable Cash Flow provides additional information for
evaluating our operating performance and ability to continue to make
quarterly distributions, and is presented solely as a supplemental
performance measure.
(2) Including amortization of deferred financing costs.
(3) Maintenance capital expenditures are the estimated cash capital
expenditures necessary to maintain the operating capacity of our
capital assets over the long term. This amount includes two
components: 1) an allowance for future scheduled drydocking costs
calculated using annually updated projections of such costs over the
next five years. Based on historical results, the difference between
cumulative amounts charged and the actual amounts spent are adjusted
over the same five-year period; 2) an allowance to replace the
operating capacity of vessels which are scheduled to phase out by
January 1, 2015 under OPA 90.
Earnings before Interest, Taxes, Depreciation and Amortization
Three months ended Year ended
June 30, June 30,
2008 2007 2008 2007
-------- -------- ------- -------
Net income $ 6,361 $ 3,792 $25,668 $15,820
Adjustments to reconcile net income
to EBITDA :
Depreciation and amortization 13,673 9,198 48,311 33,415
Interest expense, net 5,225 3,871 21,275 14,097
Provision for income taxes 183 183 529 851
-------- -------- ------- -------
EBITDA $ 25,442 $ 17,044 $95,783 $64,183
======== ======== ======= =======
K-SEA TRANSPORTATION PARTNERS L.P.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
June 30, June 30,
2008 2007
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 1,752 $ 912
Accounts receivable, net 27,871 20,664
Prepaid expenses and other current assets 15,366 6,021
-------- --------
Total current assets 44,989 27,597
Vessels and equipment, net 608,209 358,580
Construction in progress 40,370 13,285
Goodwill 54,300 16,385
Other assets 30,542 13,967
-------- --------
Total assets $778,410 $429,814
======== ========
Liabilities and Partners' Capital
Current liabilities:
Current portion of long-term debt and capital
lease obligation $ 16,754 $ 9,270
Accounts payable and accrued expenses 49,050 29,135
-------- --------
Total current liabilities 65,804 38,405
Term loans and capital lease obligation 256,381 137,946
Credit line borrowings 166,071 97,071
Other liabilities 6,707 -
Deferred taxes 3,750 3,739
-------- --------
Total liabilities 498,713 277,161
-------- --------
Non-controlling interest in equity of joint venture 4,519 -
-------- --------
Commitments and contingencies
Partners' Capital 275,178 152,653
-------- --------
Total liabilities and partners' capital $778,410 $429,814
======== ========
CONTACT: K-Sea Transportation Partners L.P. |
Investor Relations - News Release
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