- Filing of certain prospectuses and communications in connection with business combination transactions (425)
March 22 2011 - 8:14AM
Edgar (US Regulatory)
Filed by Kirby Corporation pursuant to Rule 425 of the
Securities Act of 1933 and deemed filed pursuant to
Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: K-Sea Transportation Partners L.P.
Commission File No.: 1-31920
Senior executives of Kirby Corporation will be making presentations on Tuesday, March 22, 2011
at a conference sponsored by Sidoti & Company and on Thursday, March 24, 2011 at a conference
sponsored by J. P. Morgan. A copy of the slide presentation that will be used by Kirby for the
conferences is attached hereto. Information about the webcast of the presentation at the J. P.
Morgan conference was provided in the press release issued by Kirby on March 17, 2011.
KIRBY CORPORATION
Putting Americas Waterways to
Work
NYSE: KEX
March 2011
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2
Forward Looking Statements
Non-GAAP Financial Measures
Statements contained in this presentation with respect to the future are forward-looking
statements. These statements reflect management's reasonable judgment with respect to
future events. Forward-looking statements involve risks and uncertainties. Actual results
could differ materially from those anticipated as a result of various factors, including cyclical
or other downturns in demand, significant pricing competition, unanticipated additions to
industry capacity, changes in the Jones Act or in U.S. maritime policy and practice, fuel
costs, interest rates, weather conditions and the timing, magnitude and the number of
acquisitions made by Kirby. Forward-looking statements are based on currently available
information and Kirby assumes no obligation to update such statements. A list of additional
risk factors can be found in Kirby's annual report on Form 10-K for the year ended December
31, 2010, filed with the Securities and Exchange Commission.
Kirby reports its financial results in accordance with generally accepted accounting
principles (GAAP). However, Kirby believes that certain Non-GAAP financial measures are
useful in managing Kirby's businesses and evaluating Kirby's performance. This
presentation contains two Non-GAAP financial measures, adjusted net earnings and EBITDA.
Please see the Appendix for a reconciliation of GAAP to Non-GAAP financial measures.
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Important Information about the K-Sea Transportation Merger and Additional Information
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or
a solicitation of any vote or approval. The proposed merger transaction involving Kirby Corporation and K-
Sea Transportation Partners L.P. will be submitted to the unitholders of K-Sea for their consideration. In
connection with the proposed merger, Kirby will file with the Securities and Exchange Commission a
registration statement on Form S-4 that will include a proxy statement of K-Sea and a prospectus of Kirby.
The definitive proxy statement/prospectus will be mailed to the unitholders of K-Sea. INVESTORS AND
SECURITY HOLDERS OF K-SEA ARE URGED TO READ THE REGISTRATION STATEMENT AND THE
PROXY STATEMENT/PROSPECTUS AND OTHER MATERIALS REGARDING THE PROPOSED
MERGER CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT KIRBY, K-SEA AND THE PROPOSED
MERGER.
Investors and security holders may obtain a free copy of the registration statement and the proxy
statement/prospectus when they become available and other documents filed with the SEC by Kirby and K-
Sea through the SEC's website at www.sec.gov. Free copies of the registration statement and the proxy
statement/prospectus (when available) and other documents filed with the SEC can also be obtained from
Kirby's website at www.kirbycorp.com.
Kirby and its directors and executive officers and certain other persons may be deemed to be participants
in the solicitation of proxies with respect to the proposed merger. Information regarding Kirby's
directors and executive officers is available in its Annual Report on Form 10-K for the year ended
December 31, 2010, which was filed with the SEC on February 25, 2011, and its proxy statement for
its 2011 annual meeting of stockholders, which was filed with the SEC on March 18, 2011. Other
information regarding the participants in the proxy solicitation, and a description of their direct and indirect
interests, will be contained in the proxy statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
3
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Marine Transportation
of 2010 Revenue
$915.1 million
Largest U.S. Inland Tank Barge Operator
4
Kirby...Business Operations
18%
82%
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Kirby...Public Market Facts
5
NYSE: K E X
Current Price (March 17, 2011) $54.64
Number of Shares O/S (December 31, 2010) 53.7M
Market Capitalization $2,932M
Debt (December 31, 2010) $200M
Enterprise Value $3,132M
Employees 2,750
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Kirby Facts
6
Largest inland tank barge operator
Operating 846 barges and 238 towing vessels
Sustainable competitive advantages:
Lowest cost due to economies of scale
Best positioned for growth opportunities
"One Stop Shop" for customers
75% of inland marine transportation revenues under term
contracts, of which approximately 50% are under time charters
Nationwide diesel engine services remanufacturer and
replacement parts provider, as well as ancillary products, for
medium-speed and high-speed diesel engines
Successful integration of 27 marine and 15 diesel acquisitions
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Date No. of Tank Barges Description
1986 5 Alliance Marine
1989 35 Alamo Inland Marine Co.
1989 53 Brent Towing Company
1991 3 International Barge Lines, Inc.
1992 38 Sabine Towing & Transportation Co.
1992 26 Ole Man River Towing, Inc.
1992 29 Scott Chotin, Inc.
1992 * South Texas Towing
1993 72 TPT, Division of Ashland
1993 * Guidry Enterprises
1993 53 Chotin Transportation Company
1994 96 Dow Chemical (transportation assets)
1999 270 Hollywood Marine, Inc. - Stellman, Alamo Barge Lines, Ellis Towing, Arthur Smith, Koch Ellis, Mapco
Date No. of Tank Barges Description
2002 15 Cargo Carriers
2002 64 Coastal Towing, Inc. (barge management agreement for 54 barges)
2002 94 Dow/Union Carbide (transportation assets)
2003 64 SeaRiver Maritime (ExxonMobil)
2005 10 American Commercial Lines (black oil fleet)
2006 * Capital Towing
2007 37 Coastal Towing, Inc. (operated barges since 2002 under barge management agreement)
2007 21 Cypress Barge Leasing, LLC (operated as leased barges since 1994)
2007 11 Midland Marine Corporation (operated as leased barges)
2007 9 Siemens Financial (operated as leased barges)
2008 6 OFS Marine One (operated as leased barges)
2011 * Kinder Morgan (Greens Bayou fleet)
2011 21 Enterprise Marine (ship bunkering)
2011 58** K-Sea Transportation (coastwise operator)
Shipper Owned (Red) Independent (Green) * Towboats Only
**Entered into purchase agreement. Anticipating June/July 2011 closing
Acquisitions in Marine Transportation
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Acquisitions in Diesel Engine Services
Acquisitions Acquisitions
1987 National Marine
1991 Ewing Diesel
1995 Percle Enterprises
1996 MKW Power Systems
1997 Crowley (Power Assembly Shop)
2000 West Kentucky Machine Shop
2000 Powerway
2004 Walker Paducah Corp.
2005 TECO (Diesel Services Division)
2006 Global Power Holding Company
2006 Marine Engine Specialists
2007 NAK Engineering (Nordberg Engines)
2007 P&S Diesel Service
2007 Saunders Engine & Equipment Company
2008 Lake Charles Diesel, Inc.
2011 United Holdings LLC*
Internal Growth Internal Growth
1989 Midwest
1992 Seattle
1993 Shortline & Industrial Rails
2000 Cooper Nuclear
2001 Transit & Class II Rails
* Entered into purchase agreement. Anticipating April/May 2011 closing.
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Revenue... Business Operations
9
14.6% growth rate
from 1988-2010
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(CHART)
10
Earnings Per Share
See Appendix for reconciliation of GAAP to Non-GAAP earnings per share
Earnings per share have been revised to reflect 2-for-1 stock split effective May 31, 2006
* Includes $.05 per share from ship bunkering operation purchased February 24, 2011
* Includes $.15 to $.20 per share from recently announced agreement to purchase United Holdings LLC, anticipated to close April/May 2011
* Expected positive earnings impact from K-Sea Transportation acquisition, anticipated to close in June/July 2011, will be offset by one-time
transaction fees of approximately $.05 per share
Earnings Per Share From Continuing Operations Excluding Non-Recurring Items
Guidance
12.9% growth rate
from 1994 - 2010
$2.55*
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Inland Waterway System
Sioux City
Chicago
Pittsburgh
Charleston
Tulsa
Corpus
Christi
New
Orleans
St.
Louis
Cincinnati
Mobile
Brownsville
Houston
St.
Marks
Texas and Louisiana
account for 80% of the
total U.S. production
of chemicals and
petrochemicals
St. Paul
Kirby is one of the few
operators offering
distribution throughout the
Mississippi River System
and Gulf Intracoastal
Waterway
12,000 miles of navigable
waterways link
America's heartland to
the world.
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Barge Industry Facts
Approximately 18,000 dry cargo barges and 3,100
liquid tank barges. Kirby is principally in the liquid
cargo business
No competition from foreign companies due to a U.S.
law known as the Jones Act
Always a market to move product by barge on inland
waterways
Equipment not subject to economic obsolescence
because draft and lock restrictions limit the size of
barges
Barges are mobile, carry wide range of cargoes, and
service different geographic markets
Inland waterway system plays a vital role in the U.S.
economy
Inland waterway system is an environmentally friendly
mode of transportation
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Number of Inland Tank Barges
For the years 1993 through March 2011
121 single hull tank
barges industry wide,
9 operated by Kirby
(CHART)
Source: Informa Economics, Barge Fleet Profile, March 2011 - Adjusted
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Inland Tank Barge Fleet
Source: Informa Economics, Barge Fleet Profile, March 2011
(CHART)
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Largest Inland Tank Barge Operator
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Benzene
Styrene
Methanol
Acrylonitrile
Xylene
Caustic soda
Butadiene
Propylene
Residual fuel oil
Coker feedstock
Vacuum gas oil
Asphalt
Carbon black
feedstock
Crude oil
Ship bunkers
Black Oil Products - 18%*
Anhydrous
ammonia
Nitrogen-based
liquid fertilizer
Industrial
ammonia
Agricultural Chemicals - 5%*
Gasoline
No. 2 oil
Jet fuel
Heating oil
Diesel fuel
Naphtha
Refined Petroleum Products - 8%*
Petrochemicals-69% *
* Revenue distribution for the year ended December 31, 2010
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Fleet Size and Flexibility...
Towboat Fleet
Operating an average of 220 towboats in 4th
Qtr. of 2010 vs. 212 in 4th Qtr. of 2009
Chartered towboats used to balance
horsepower with demand
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Tank Barge Fleet
Large fleet facilitates better asset utilization
More backhaul opportunities
Faster barge turnarounds
Barges positioned closer to cargoes
Less cleaning
Better Asset Utilization
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Tank Barges Operated Dry Cargo Barges Operated
Genesis Energy, L.P. 20 -
Rhodia, Inc. 19 -
TARGA 18 -
John W. Stone Oil 17 -
Lyondell Chemical Company 17 -
Olin Corporation 15 -
Highland Marine 11 -
Merichem Company 10 -
Progressive Barge Line 10 -
AgriChemical Marine Transp 8 -
Natures Way Marine 8 -
CC Marine 5 -
Mon River Towing, Inc. 4 -
Plaquemine Towing 3 -
James Transportation 3 -
Other dry cargo carriers - 10,060
TOTAL (estimated) 3,072 18,000
Informa Economics, Barge Fleet Profile, March 2011 - Adjusted
Kirby Outpaces the Competition
Inland Tank Barge Owners By Number of Tank Barges
Tank Barges Operated Dry Cargo Barges Operated
Kirby Corporation 846 -
American Commercial Lines LLC 325 2,135
Canal Barge Company, Inc. 211 348
Florida Marine 203 -
Marathon Oil Corporation 172 -
Ingram Barge Company 172 3,784
Enterprise Products Partners 122 -
Higman Barge Lines, Inc. 108 -
Blessey Marine Services 107 -
American River Transportation Co 84 1,673
Settoon Towing, LLC 65 -
Martin Midstream Partners 63 -
Southern Towing Company 61 -
Magnolia Marine Transport Co 57 -
PPG Industries, Inc. 55 -
LeBeouf Brothers Towing Co 49 -
Devall Barge Lines 40 -
Golding Barge Lines, Inc. 40 -
Chem Carriers, Inc. 31 -
Buffalo Marine Service, Inc. 28 -
Waxler Towing Company, Inc. 23 -
Westlake Vinyl 22 -
River City Towing Services 20 -
Shipper Owned Independent
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End Uses of Products...
Revenue Distribution * Products Moved Products Drivers
69% Petrochemicals and Chemicals Benzene, Styrene, Methanol, Acrylonitrile, Xylene, Caustic Soda, Butadiene, Propylene Consumer non-durables - 70%Consumer durables - 30%
18% Black Oil Products Residual Fuel Oil, Coker Feedstock, Vacuum Gas Oil, Asphalt, Carbon Black Feedstock, Crude Oil, Ship Bunkers Fuel for Power Plants and Ships, Feedstock for Refineries and Road Construction,
8% Refined Petroleum Products Gasoline, No. 2 Oil, Jet Fuel, Heating Oil, Diesel Fuel, Naphtha Vehicle Usage, Air Travel, Weather, Refinery Utilization
5% Agricultural Chemicals Anhydrous Ammonia, Nitrogen-based Liquid Fertilizer, Industrial Ammonia Corn, Cotton, Wheat Production, Chemical Feedstock Usage
* For the year ended December 31, 2010
Demand Drivers
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Committed to dedicating
adequate resources to achieve
safety objectives
Extensive company-owned and
operated training facility
(Towboat Simulator)
Industry leader
First winner of Benkert
Award, highest award given by
Department of Transportation for
safety and environmental
protection
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Committed to dedicating
adequate resources to achieve
safety objectives
Extensive company-owned and
operated training facility
(Towboat Simulator)
Industry leader
First winner of Benkert
Award, highest award given by
Department of Transportation for
safety and environmental
protection
Strong Emphasis on Safety...
"Safety Is Our
Franchise To
Operate."
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Diesel Engine Services
Markets
Medium-Speed and High-Speed Diesel Engines
Marine Inland Waterway Carriers - Dry and LiquidOffshore Towing - Dry and LiquidOffshore Drilling Rigs & Supply BoatsHarbor TowingDredgingGreat Lakes Ore Carriers
Power Generation, Nuclear, and Industrial Standby Power GenerationPumping StationsIndustrial Reduction GearsLand Drilling Rigs - Expansion Opportunity
Railroad Passenger (Transit Systems)Class IIShortline and Industrial
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Diesel Engine Services
Engines and Transmissions/Reduction Gears
Medium-Speed Electro-Motive Diesel (EMD)Cooper-BessemerNordberg
High-Speed CaterpillarCumminsDetroit DieselJohn Deere
Transmissions/Reduction Gears AllisonFalk Twin Disc
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25
Acquisition of Ship Bunkering Operation
Acquired from Enterprise Marine Services
Ship bunkering (engine fuel) operation primarily in Florida and Texas
Consists of 21 tank barges and 15 boats
Purchase price of approximately $53.2M in cash
Immediately accretive to Kirby's earnings
Full year 2011 revenue in the $30M to $35M range
Full year 2011 net earnings in the $0.05 to $0.07 per share range
Acquisition closed on February 24th
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26
Pending Acquisition of United Holdings LLC
Manufacturer, distributor and service provider of engine related products
21 locations across 13 states, located near a number of shale gas plays
Expands diesel engine business to land
Purchase price of approximately $270M, with up to a $50M earnout in 2014
Entering a market with excellent opportunities for growth, as the recovery of shale gas
is an energy "game changer"
United, like Kirby, has an experienced management team and excellent long-term
customer relationships
Anticipated to be immediately accretive to Kirby's 2011 earnings
2011 projected revenue for Kirby - $285M to $335M (2011 full year revenue - $375M to
$450M range)
2011 net earnings for Kirby - $0.15 to $0.20 per share range (2011 full year net earnings
- $0.20 to $0.25 per share range)
Anticipated closing April/May 2011
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Pending Acquisition of K-Sea Transportation Partners L.P.
Operator of tank barges and towing vessels participating in the coastwise
transportation of primarily refined petroleum products
Fleet consists of 58 tank barges with 3.8 million barrels of capacity (54 are double hull)
and 63 tugboats, operating along the U.S. East, West and Gulf Coasts, and in Alaska
and Hawaii
Total value of transaction approximately $600M, before fees, and will consist of cash,
Kirby common stock and refinancing of K-Sea debt
Outlook for K-Sea's U.S coastwise tank barge market is improving
Volumes improving from 2009 low levels
Supply/demand balance is improving as single hull tank barges are phased out
under OPA 90 between now and end of 2014
Rates improving from 2009 lows and equipment utilization is at higher levels
Anticipate closing June/July 2011
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2012F
$1.8 - $2.0 Billion
2010A
$1.1 Billion
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Kirby...Business Operations After Acquisitions
82%
Marine Transportation
18%
Diesel Engine Services
35%*
Diesel
Engine Services
65%*
Marine
Transportation
REVENUES
* Approximate percentage that could vary significantly based on market and economic conditions
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30
2011 First Quarter and Year Guidance
First Qtr. Guidance Range: $.56 to $.61 per share vs. $.46 per share for 2010 Q1 that include $.05 per share
charge for early retirements and shore staff reductions
Full Year Guidance Range: $2.55 to $2.80 per share, up from previous announced guidance range of $2.35 to
$2.55 per share vs. $2.15 per share for 2010
Includes $.05 per share from ship bunkering operation purchased February 24, 2011
Includes $.15 to $.20 per share from the pending acquisition of United Holdings LLC
Expected positive earnings impact from pending acquisition of K-Sea Transportation will be offset
by one time transaction fees of approximately $.05 per share
Marine Transportation
Equipment utilization ranging from the mid to high 80% level
Pricing will remain in line with 2010 Q4, improving in latter half of year
Winter weather will temper Q1 results due to increased delay days with operating results dependent
upon severity
Diesel Engines
Medium-speed power generation market expected to remain favorable
Gulf Coast oil services market expected to remain challenged as customers continue to defer major
maintenance projects
Historically, 20% to 25% of diesel revenue associated with Gulf Coast oil services market
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Tank Barge and Towboat Construction
2010 construction program took advantage of attractive construction prices
57 new tank barges delivered throughout 2010
3 new 1800 horsepower towboats
2011 construction program, taking advantage of attractive construction prices
38 new 30,000 barrel tank barges and two pressure barges for delivery throughout 2011
3 new 1800 horsepower towboats for delivery in 2011 and 2012
Capital expenditure guidance for 2011 of $185 to $195 million, including $100 million for new
tank barges and towboats and $15 million for United Holdings LLC
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For Year Ended December 31, 2010
Change from 2009 Change from 2009
Income Statement 2010 2009 $ %
Revenues:
Marine Transportation $ 915.1M $ 881.3M $ 33.8M 4%
Diesel Engine Services 194.5 200.9 (6.4) (3)
Total $ 1,109.6M $ 1,082.2M $ 27.4M 3%
Operating Income:
Marine Transportation $ 192.8M $ 208.1M $ (15.3)M (7)%
Diesel Engine Services 20.6 21.0 (.4) (2)
Corporate Expenses (13.2) (12.2) (1.0) (8)
200.2 216.9 (16.7) (8)
Other Expense (.7) (1.9) 1.2 63
Interest Expense (11.0) (11.1) .1 1
Pre-Tax Earnings 188.5 203.9 (15.4) (8)
Taxes (72.3) (78.0) 5.7 8
Net Earnings $ 116.2M $ 125.9M $ (9.7)M (8)%
Earnings Per Share $ 2.15 $ 2.34 $ (.19) (8)%
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Operating Margins
Operating Margins
34
(CHART)
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EBITDA Per Share Growth
EBITDA Per Share Growth
35
See Appendix for reconciliation of GAAP net earnings to Non-GAAP EBITDA
(CHART)
11.1% growth rate
from 1994 - 2010
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Cash Flows
Cash Flows
36
Expansion Barges
$30
* Unaudited
(CHART)
$193
$185*
*Includes $15 million of capital expenditures for United Holdings LLC
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(CHART)
Debt/Capitalization
37
14.7%
57.3%
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Financial Strength
38
Investment grade debt, after K-Sea Transportation announcement
Standard & Poor's: A- (Credit Watch with Negative Implications)
Moody's: Baa3
Fitch: BBB
$250 million bank revolving credit
None presently outstanding
Renewed in November 2010, 5 year renewal
8-year unsecured Private Placement due 2013
$200 million outstanding
Floating rate of LIBOR +0.5%
No required principal payments until maturity
Acquisition financing
Up to $540M 5-year Bank Term Loan
Floating rate
No prepayment penalty
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Why Invest in Kirby?
40
Consistent long-term record of success
Experienced Management teams in both core businesses
Marine Transportation
75% of business under term contracts, of which
approximately 50% are under time charters
Approximately 70% of petrochemicals moved produce
consumer nondurable goods, 30% consumer durable
Diesel Engine Services
Provides essential service to marine, power generation and
railroad industries
Largest geographic footprint of any U.S. diesel service
provider
Strong financial discipline and cash flow
2011 Acquisitions
Closed ship bunkering operation in February
Anticipate closing United Holdings in April/May
Anticipate closing K-Sea Transportation in June/July
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Thank You For Listening to Our Story
Kirby Corporation
Putting America's
Waterways to Work
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