K Sea (NYSE:KSP)
Historical Stock Chart
From Jul 2019 to Jul 2024
K-Sea Transportation Partners L.P. (NYSE: KSP) today announced operating
results for the third fiscal quarter ended March 31, 2007. The Company
also announced that its distribution to unitholders for the third
quarter will increase by $0.02, or 3.0%, to $0.68 per unit, or $2.72 per
unit annualized. This is the eighth consecutive quarter of increased
distributions, and the tenth such increase since the Company’s
IPO in January 2004. The distribution will be payable on May 15, 2007 to
unitholders of record on May 8, 2007.
The Company’s distributable cash flow for the
third quarter of fiscal 2007 was $8.6 million, or 1.20 times the amount
needed to cover the increased cash distribution of $7.2 million declared
in respect of the period. Distributable cash flow is a non-GAAP
financial measure that is reconciled to net income, the most directly
comparable GAAP measure, in the table below.
Three Months Ended March 31, 2007
For the three months ended March 31, 2007, the Company reported
operating income of $7.6 million, an increase of $3.5 million, or 86%,
compared to $4.1 million of operating income for the three months ended
March 31, 2006. This year-over-year increase resulted from the
continuing expansion of the Company’s fleet
barrel-carrying capacity, including the addition of six new tank barges
since January 2006. These results were also positively impacted by
continued strong rates and vessel utilization, partially offset by
increases of $1.3 million in depreciation and amortization due to the
expanded fleet, and $0.9 million in general and administrative expenses
in support of the Company’s growth. Earnings
before interest, taxes, depreciation, amortization, and loss on
reduction of debt (EBITDA) increased by $4.8 million, or 43%, to $16.0
million for the three months ended March 31, 2007, compared to $11.2
million for the three months ended March 31, 2006. EBITDA is a non-GAAP
financial measure that is reconciled to net income, the most directly
comparable GAAP measure, in the table below.
Net income for the three months ended March 31, 2007 was $4.0 million,
or $0.39 per fully diluted limited partner unit, compared to net income
of $1.2 million, or $0.12 per fully diluted limited partner unit, for
the three months ended March 31, 2006, an increase of $2.8 million. The
fiscal 2007 third quarter benefited from the $3.5 million increase in
operating income, offset by a $0.7 million increase in interest expense
resulting from higher debt balances incurred to finance vessel
acquisitions in connection with the Company’s
fleet expansion program over the past year, and higher interest rates.
Nine Months Ended March 31, 2007
For the nine months ended March 31, 2007, the Company reported operating
income of $22.9 million, an increase of $6.0 million, or 35%, compared
to $16.9 million of operating income for the nine months ended March 31,
2006. Similar to the increase for the third fiscal quarter, this
increase resulted primarily from the expansion of the Company’s
barrel-carrying capacity, including the acquisition of Sea Coast
Transportation LLC in October 2005 and the addition of six newbuild tank
barges since January 2006, partially offset by increases of $5.1 million
in depreciation and amortization and $2.7 million in general and
administrative expenses in support of the Company’s
growth. Of the $2.7 million increase in general and administrative
expenses, $1.4 million related to the acquisition of Sea Coast and
another small operation in Philadelphia in the fall of 2006. EBITDA
increased by $11.0 million, or 31%, to $47.1 million for the nine months
ended March 31, 2007, compared to $36.1 million for the nine months
ended March 31, 2006.
Net income was $12.0 million for the nine months ended March 31, 2007,
or $1.18 per fully diluted limited partner unit, compared to net income
of $2.8 million, or $0.29 per fully diluted limited partner unit, for
the nine months ended March 31, 2006. The $6.0 million of increased
operating income for the nine months ended March 31, 2007 was offset by
$3.3 million of higher interest expense, resulting from higher debt
balances incurred to finance the fleet expansion over the past year.
Additionally, the prior year period was adversely affected by a $6.9
million loss on reduction of debt related to retirement of the Company’s
Title XI bonds in November 2005, and net income was therefore abnormally
low.
President and CEO Timothy J. Casey said “Our
operating results for the fiscal 2007 third quarter were strong, with
operating income, EBITDA, and net income per unit all significantly
higher than last year. We expect our results to be strengthened further
by our ongoing fleet expansion. We took delivery of another new 28,000
barrel tank barge in January, and a 100,000 barrel tank barge in March.
In April, we purchased two additional tugboats, bringing the total to
five acquired tugs this fiscal year, as part of a program to reduce
operating costs and improve efficiency. We have seven additional tank
barges under construction which are scheduled for delivery at intervals
of every few months between now and the end of calendar 2008. In light
of our results and expectations, our Board of Directors, as reported
above, approved a two cent per unit increase in our quarterly
distribution. At our current annualized rate of $2.72 per unit, K-Sea’s
distribution is over 13% higher than at this time last year. We remain
optimistic about continuing our growth for the balance of this year and
in fiscal 2008.”
Earnings Conference Call
The Company has scheduled a conference call for Monday, April 30, 2007,
at 9:00 am Eastern time, to review the third quarter results. Dial-in
information for this call is (866) 277-1182 (Domestic) and (617)
597-5359 (International). The Passcode is 23154151. The conference call
can also be accessed by webcast, which will be available at www.k-sea.com.
Additionally, a replay of the call will be available by telephone until
May 7, 2007; the dial in number for the replay is (888) 286-8010
(Domestic) and (617) 801-6888 (International). The Passcode is 63679017.
About K-Sea Transportation Partners
K-Sea Transportation Partners is the largest coastwise tank barge
operator, measured by barrel-carrying capacity, 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. However, certain non-GAAP financial
measures such as EBITDA and distributable cash flow are also presented.
EBITDA is used as a supplemental financial measure 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 and distributable cash
flow, 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 unit and per unit data)
Three months ended
Nine months ended
March 31,
March 31,
2007
2006
2007
2006
Voyage revenue
$
53,807
$
45,082
$
159,475
$
127,514
Bareboat charter and other revenue
1,823
1,007
7,096
3,083
Total revenues
55,630
46,089
166,571
130,597
Voyage expenses
10,592
9,224
32,638
27,166
Vessel operating expenses
23,614
21,356
71,375
55,161
General and administrative expenses
5,236
4,298
15,299
12,587
Depreciation and amortization
8,405
7,074
24,217
19,151
Net loss (gain) on disposal of vessels
182
44
166
(371)
Total operating expenses
48,029
41,996
143,695
113,694
Operating income
7,601
4,093
22,876
16,903
Interest expense, net
3,485
2,794
10,226
6,924
Net loss on reduction of debt
-
-
-
6,898
Other expense (income), net
(15)
(11)
(46)
(32)
Income before provision
for income taxes
4,131
1,310
12,696
3,113
Provision for income taxes
135
94
668
295
Net income
$
3,996
$
1,216
$
12,028
$
2,818
General partner's interest in net income
$
80
$
24
$
241
$
56
Limited partners' interest in:
Net income
$
3,916
$
1,192
$
11,787
$
2,762
Net income per unit
- basic
$
0.39
$
0.12
$
1.19
$
0.29
- diluted
$
0.39
$
0.12
$
1.18
$
0.29
Weighted average units outstanding
- basic
9,941
9,919
9,934
9,501
- diluted
10,015
9,977
10,015
9,558
Supplemental Operating Statistics
Three months ended
Nine months ended
March 31,
March 31,
2007
2006
2007
2006
Local Trade:
Average daily rate (1)
$
6,765
$
5,645
$
6,763
$
5,515
Net utilization (2)
82%
80%
80%
79%
Coastwise Trade:
Average daily rate
$
12,772
$
11,422
$
12,155
$
11,940
Net utilization
90%
88%
91%
91%
Total Fleet
Average daily rate
$
10,226
$
8,909
$
9,928
$
9,082
Net utilization
87%
84%
86%
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
Nine months ended
March 31, 2007
March 31, 2007
Net income
$
3,996
$
12,028
Adjustments to reconcile net income
to distributable cash flow :
Depreciation and amortization (2)
8,481
24,436
Non cash compensation cost under
long term incentive plan
188
568
Adjust loss on vessel sale to net proceeds
307
631
Deferred income tax expense
35
220
Maintenance capital expenditures (3)
(4,400)
(12,600)
Distributable cash flow
8,607
25,283
Cash distribution in respect of the period
$
7,187
$
20,762
Distribution coverage
1.20
1.22
(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
and Loss on Reduction of Debt (EBITDA)
Three months ended
Nine months ended
March 31,
March 31,
2007
2006
2007
2006
Net income
$
3,996
$
1,216
$
12,028
$
2,818
Adjustments to reconcile net income to EBITDA :
Depreciation and amortization
8,405
7,074
24,217
19,151
Interest expense, net
3,485
2,794
10,226
6,924
Net loss on reduction of debt
-
-
-
6,898
Provision for income taxes
135
94
668
295
EBITDA
$
16,021
$
11,178
$
47,139
$
36,086
K-SEA TRANSPORTATION PARTNERS L.P.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
March 31,
June 30,
2007
2006
Assets
Current assets:
Cash and cash equivalents
$
20
$
826
Accounts receivable, net
19,385
20,322
Prepaid expenses and other current assets
6,078
8,753
Total current assets
25,483
29,901
Vessels and equipment, net
342,823
316,237
Construction in progress
10,290
5,452
Goodwill
16,385
16,579
Other assets
13,082
14,859
Total assets
$
408,063
$
383,028
Liabilities and Partners' Capital
Current liabilities:
Current portion of long-term debt and
capital lease obligation
$
9,228
$
7,745
Accounts payable and accrued expenses
26,251
22,626
Total current liabilities
35,479
30,371
Term loans and capital lease obligation
138,895
131,620
Credit line borrowings
76,193
54,015
Deferred taxes
3,104
3,079
Total liabilities
253,671
219,085
Commitments and contingencies
Partners' Capital
154,392
163,943
Total liabilities and partners' capital
$
408,063
$
383,028