- Filing of certain prospectuses and communications in connection with business combination transactions (425)
May 20 2011 - 12:15PM
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 (Kirby) will be making a presentation at the Bank of
America Merrill Lynch 2011 Global Transportation Conference on Friday, May 20, 2011. A copy of the
slide presentation that will be used by Kirby is attached hereto. Information about the webcast of
the presentation was provided in the press release issued by Kirby on May 13, 2011.
KIRBY CORPORATION
Putting America's Waterways to
Work
NYSE: KEX
May 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 has filed with the Securities and Exchange Commission a
registration statement on Form S-4 that includes 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 (May 16, 2011) $53.48
Number of Shares O/S (May 3, 2011) 53.7M
Market Capitalization $2,872M
Debt (May 16, 2011) $310M
Enterprise Value $3,182M
Employees 3,350
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Kirby Facts
6
Largest inland tank barge operator
Operating 829 barges and 249 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 parts provider for medium-
speed and high-speed diesel engines
Manufacturer of oil service and power generation equipment
using medium-speed and high-speed diesel engines
Successful integration of 27 marine and 15 diesel acquisitions
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7
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 2011 third quarter 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
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Revenue... Business Operations
9
14.6% growth rate
from 1988-2010
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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 $.20 to $.25 per share from United, purchased April 15, 2011
* Expected positive earnings impact from K-Sea Transportation acquisition, anticipated to close in 2011 third quarter, will be offset by one-
time merger related 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
$2.70*
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12
U.S. Inland and Coastal Waterway Systems
Sioux
City
Chicago
Pittsburgh
Charleston
Tulsa
Corpus
Christi
St.
Louis
Cincinnati
Houston
St.
Marks
St.
Paul
New Orleans
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
Texas and Louisiana account for
80% of the total U.S. production of
chemicals and petrochemicals
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Barge Industry Facts
The U.S. barge industry serves both the inland waterways,
U.S. coastwise ports, Alaska and Hawaii
The inland based business is comprised of approximately
18,000 dry cargo barges and 3,100 liquid tank barges
The U.S. coastwise, Alaska and Hawaii business is comprised
of approximately 230 tank barges
Kirby is principally in the liquid cargo transportation business
No competition from foreign companies due to a U.S. law
known as the Jones Act
Equipment not subject to economic obsolescence because
draft, lock and port restrictions limit the size of barges
Barges are mobile, carry wide range of cargoes, and service
different geographic markets
Inland and the coastwise waterway system plays a vital role in
the U.S. economy
The waterway system is an environmentally friendly mode of
transportation
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Number of Inland Tank Barges
For the years 1993 through April 2011
121 single hull tank
barges industry wide,
9 operated by Kirby
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
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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 - 20%*
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 - 9%*
Petrochemicals-66% *
* Revenue distribution for the first quarter ended March 31, 2011
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Inland Fleet Size and Flexibility...
Towboat Fleet
Operating an average of 230 towboats in 1st
Qtr of 2011 vs. 224 in 1st Qtr of 2010
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) 3,055 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 829 -
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...
* For the first quarter ended March 31, 2011
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
United Holdings
Kirby Engine Systems
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Diesel Engine Services
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Diesel Engine Services
Engines and Transmissions/Reduction Gears
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United Holdings
Distributes and services land based engines, pumps
and transmissions
Suppliers: Allison Transmissions, MTU Detroit Diesel,
Daimler Trucks, Isuzu, Heil and Tymco
Markets: Land based oilfield services, transportation,
municipalities, construction, and power generation
United Engines
UE Manufacturing
UE Compression
Manufactures land based oilfield service equipment,
including hydraulic fracturing equipment
Products: Pressure pumpers, cementers, hydration
equipment, mud pumps, blenders, nitrogen pumpers
Markets: Oilfield service and oil and gas operators
Manufactures and packages custom compression
systems
Products: Electric motor driven systems, natural gas
engine driven systems, industrial air systems
Markets: Compression service, oil and gas operators,
and power products
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United Holdings
21 locations across 13 states
Purchase price of approximately $270 million with up
to a $50 million earnout payable in 2014
Entered 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
2011 projected revenue for Kirby $285 to $335 million
(2011 full year revenue $375 million to $450 million)
2011 net earnings for Kirby $.20 to $.25 per share
range (2011 full year net earnings $.25 to $.30 per
share range)
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North American Shale Gas Plays
Source: EIA, Tudor Pickering Estimates
Bakken
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Fracturing forces water, sand and chemical
down a drilled well at extremely high
pressure
The force of the fluid creates cracks and
fissures increasing porosity
Fracturing is often done in stages to
increase recovery rates
Hydraulic Fracturing Overview
Source: Chesapeake Energy
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K-Sea Transportation Acquisition
28
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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 consideration 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 2011 third quarter
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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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32
2011 Second Quarter Guidance
Guidance on April 28th for the 2nd quarter was $0.67 - $0.77 per share which included
$0.02 to $0.07 per share for the high water event on the Mississippi River System
The high water event may have a greater impact on the 2011 2nd quarter results than
originally anticipated
We will revise or confirm our 2nd quarter guidance when the high water event has
stabilized and our assessment of the impact is complete
However, this event will pass
50% of our marine transportation revenue is under term contracts
Inland barge fundamentals remain strong
Diesel engine services markets will remain consistent with first quarter
Accretive earnings from United in the $.04 to $.06 per share range
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2011 Year Guidance
$2.70 to $2.90 per share vs. $2.15 per share for 2010
High end guidance assumes strong petrochemical and black oil products markets
with equipment utilization in the low 90% range and continued modest rate increases
Low end guidance assumes deterioration in petrochemical and black oil markets
with equipment utilization levels back to high 80% range and modest rate increases
later in year
Assumes accretive earnings from United in the $.20 to $.25 per share range
Assumes accretive earnings from K-Sea Transportation, scheduled to be completed
in 2011 third quarter, will be offset by one-time merger transaction fees of
approximately $.05 per share
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Planned Capital Expenditures
2011 construction program, taking advantage of attractive construction
prices
Capital expenditure guidance for 2011 of $220 to $230 million
$100 million for equipment delivered throughout 2011
38 new 30,000 barrel inland tank bares and two pressure barges
3 new 1800 horsepower inland tow boats
$36 million in progress payments on new offshore integrated dry-bulk barge and
tugboat unit with an estimated total cost of $50 million. Delivery in 2012
$15 million for United
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For First Quarter Ended March 31, 2011
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Operating Margins
Operating Margins
37
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EBITDA Per Share Growth
EBITDA Per Share Growth
38
See Appendix for reconciliation of GAAP net earnings to Non-GAAP EBITDA
11.1% growth rate
from 1994 - 2010
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Cash Flows
Cash Flows
39
Expansion Barges
$30
* Unaudited
$193
$220*
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Debt/Capitalization
40
14.3%
57.3%
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Financial Strength
41
Investment grade debt, after K-Sea Transportation announcement
Standard & Poor's: A-
Moody's: Baa3
Fitch: BBB
$250 million bank revolving credit
$____ million presently outstanding as of May ____, 2011
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?
43
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
Closed United Holdings in April
Anticipate closing K-Sea Transportation in third quarter
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Thank You For Listening to Our Story
Kirby Corporation
Putting America's
Waterways to Work
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