K-Sea Transportation Partners L.P. Announces Expected Results for Fourth Quarter...

K-Sea Transportation Partners L.P. Announces Expected Results for Fourth Quarter and Fiscal Year Ended June 30, 2008

NEW YORK--(Business Wire)--
K-Sea Transportation Partners L.P. (NYSE: KSP) today announced
expected operating results and net income for the fourth fiscal
quarter and year ended June 30, 2008. These amounts are being
presented in a range and are subject to finalization pending
resolution of certain non-cash depreciation expense issues related
primarily to fixed assets acquired in the Smith Maritime Group
acquisition. Net income for the fourth quarter is expected to be in
the range of $4.1 million to $7.3 million, or $0.29 to $0.52 per fully
diluted limited partner unit, compared to $3.8 million, or $0.37 per
unit, in the same period a year ago. As previously announced, the
Company also increased its distribution to unitholders for the fourth
quarter by $0.01, or 1.3%, to $0.77 per unit, or $3.08 per unit
annualized. This is the thirteenth consecutive quarter of increased
distributions, and the fifteenth increase since the Company's IPO in
2004. The distribution will be payable on August 14, 2008 to
unitholders of record on August 6, 2008.

President and CEO Timothy J. Casey said "We are pleased with our
expected results for the fourth fiscal quarter and year ended June 30,
2008. We experienced the anticipated rebound from the seasonally slow
March quarter, and rates for our services continue to be strong.
Despite some weakness in demand in certain local markets, overall
vessel utilization remains solid, primarily due to our significant
proportion of long-term charter contracts. These contracts have an
average remaining duration of approximately 2.5 years. Our fleetwide
vessel utilization was 85% for the fourth quarter and 84% for the full
year.

During the fourth quarter of fiscal 2008, we took delivery of a
new 80,000 barrel tank barge, which immediately began work under a
three-year contract for a major customer on the west coast. We have
eight additional units under construction, two of which are expected
to be delivered by November of this year and which are also under
contract with customers. In June 2008, we acquired eight tugboats from
Roehrig Maritime for approximately $41.5 million in cash. These
tugboats will initially reduce our outside towing costs, and will
ultimately ensure that we have sufficient tugboats to power our
remaining new barges when they are delivered during calendar years
2009 and 2010.

"In light of our results and expectations, our Board of Directors
last week approved a one cent per unit increase in our quarterly
distribution. At our current annualized rate of $3.08 per unit,
K-Sea's distribution is 10% higher than at this time last year. We
remain optimistic about our ability to continue to grow future
distributions."

Three Months Ended June 30, 2008

For the three months ended June 30, 2008, the Company expects
operating income in a range of $9.6 million to $12.8 million, compared
to $7.8 million of operating income for the three months ended June
30, 2007. This increase resulted primarily from inclusion of the
results of the Smith Maritime Group (Smith) from its acquisition date
of August 14, 2007, and also from the ongoing addition of new barges
from the Company's expansion and upgrade program. Since the beginning
of the 2007 fourth fiscal quarter, the Company has taken delivery of
five new tank barges.

Operating results for the fourth quarter of fiscal 2008 were also
positively impacted by continued strong rates and vessel utilization,
partially offset by increased depreciation and amortization due to the
Smith acquisition and the expanded fleet, and $2.6 million in higher
general and administrative expenses as a result of the Smith
acquisition and the Company's continued growth. Earnings before
interest, taxes, depreciation and amortization (EBITDA) increased by
$8.4 million, or 49%, to $25.4 million for the three months ended June
30, 2008, compared to $17.0 million for the three months ended June
30, 2007.

Net income for the three months ended June 30, 2008 is expected to
be in the range of $4.1 million to $7.3 million, or $0.29 to $0.52 per
fully diluted limited partner unit, compared to net income of $3.8
million, or $0.37 per fully diluted limited partner unit, for the
three months ended June 30, 2007. The fiscal 2008 fourth quarter
benefited from the increased operating income, which was partially
offset by a $1.4 million increase in interest expense resulting from
additional debt incurred to finance the Smith acquisition and vessel
newbuildings over the past year.

Year Ended June 30, 2008

For the year ended June 30, 2008, the Company expects to report
operating income in the range of $46.0 million to $49.2 million,
compared to $30.7 million of operating income for the year ended June
30, 2007. This increase resulted primarily from the Smith acquisition
and from the addition of new barges from the Company's expansion and
upgrade program. Since the beginning of fiscal 2007, the Company has
taken delivery of eight new tank barges. Fiscal 2008 results were also
positively impacted by continued strong rates, partially offset by
lower vessel utilization in the coastwise trade as a result of a
larger-than-normal drydocking schedule during the year, increased
depreciation and amortization due to the Smith acquisition and the
expanded fleet, and $8.5 million in higher general and administrative
expenses as a result of the Smith acquisition and the Company's
continued growth. EBITDA increased by $31.6 million, or 49%, to $95.8
million for the year ended June 30, 2008, compared to $64.2 million
for the year ended June 30, 2007.

Net income for the 2008 fiscal year is expected to be in the range
of $26.0 million to $29.2 million, or $1.97 to $2.21 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. The fiscal 2008 year benefited from the increased operating
income, and from a $2.1 million non-recurring gain from the settlement
of legal proceedings relating to the Company's previously reported
November 2005 incident involving the barge DBL 152 in the Gulf of
Mexico. These increases were partially offset by a $7.2 million
increase in interest expense resulting from debt incurred to finance
the Smith acquisition and vessel newbuildings over the past year.

Distributable Cash Flow

The Company's distributable cash flow for the fourth quarter of
fiscal 2008 was $14.8 million, or 1.27 times the amount needed to
cover the increased cash distribution of $11.7 million declared in
respect of the period. The coverage ratio for the year ended June 30,
2008 was 1.23 times; excluding the $2.1 million non-recurring gain
mentioned above, the ratio was 1.19 times.

Earnings Conference Call

The Company has scheduled a conference call for today, August 5,
2008, at 4:00 P.M. Eastern time, to review the fourth quarter and
fiscal year 2008 results. Dial-in information for this call is (800)
299-0148 (Domestic) and (617) 801-9711 (International). The Passcode
is 10114244. 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 August 12, 2008; the
dial in number for the replay is (888) 286-8010 (Domestic) and (617)
801-6888 (International). The Passcode is 27963681.

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. The
Company expects to include a reconciliation of EBITDA and
distributable cash flow in a Form 8-K.

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 the benefits to be derived from the
Smith Maritime Group acquisition, 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.
John J. Nicola, 732-565-3818
Chief Financial Officer

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