K-Sea Transportation Partners
L.P. announced operating results for the first fiscal quarter ended September 30, 2006. The Company also announced that its distribution to unitholders for the first quarter will increase by $0.02, or 3.2%, to $0.64 per unit, or $2.56 per unit annualized. This is the sixth consecutive quarter of increased distributions, and the eighth such increase since the Company’s IPO in January 2004. The distribution will be payable on November 15, 2006 to unitholders of record on November 9, 2006.
For the three months ended September 30, 2006, the Company reported operating income of $7.5 million, an increase of $1.4 million, or 22%, compared to $6.1 million of operating income for the three months ended September 30, 2005. The increase resulted from expansion of the Company’s fleet barrel-carrying capacity over the past year, including the acquisition of Sea Coast Transportation in October 2005 and the addition of five tank barges, including four newbuilds, one of which was delivered during the fiscal 2007 first quarter. Earnings before interest, taxes, depreciation, amortization (EBITDA) increased by $3.6 million, or 31%, to $15.2 million for the three months ended September 30, 2006, compared to $11.6 million for the three months ended September 30, 2005. EBITDA is a non-GAAP financial measure that is reconciled to net income, its most directly comparable GAAP measure, in the table below.
Net income for the three months ended September 30, 2006 was $4.1 million, or $0.40 per fully diluted limited partner unit, compared to net income of $4.2 million, or $0.47 per fully diluted limited partner unit, for the three months ended September 30, 2005. The $0.1 million decrease in net income resulted from the $1.4 million increase in operating income, offset by an increase in $1.6 million in interest expense resulting from higher debt balances incurred to finance vessel acquisitions in connection with the Company's fleet expansion and upgrading program over the past year, and higher interest rates.