NEW YORK–(EMWNews)–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.

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