COMPANY PRESENTATION MARCH 2016

Transcription

1 COMPANY PRESENTATION MARCH 2016

2 DISCLAIMER FORWARD-LOOKING STATEMENTS & INFORMATION This presentation contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expected'', budget, scheduled, anticipates, outlook, is estimated, forecasts, potential, ongoing, may, will, positioned, should, believe, intends and variations of these terms and similar expressions, or the negative of these terms or similar expressions, are intended to identify forward-looking, information or statements. Forward-looking information is based on the opinions, expectations and estimates of management of Pyxis Tankers Inc. ( we or our ) at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Although we believe that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, you should not place undue reliance on the forward-looking statements and information because we cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties and actual results and future events could differ materially from those anticipated in such information. Factors that might cause or contribute to such discrepancy include, but are not limited to, the risk factors described in our filings with the Securities and Exchange Commission (the SEC ). The forward-looking statements and information contained in this presentation are made as of the date hereof. We do not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except in accordance with U.S. federal securities laws and other applicable securities laws. This presentation and any oral statements made in connection with it are for informational purposes only and do not constitute an offer to buy or sell our securities. For more complete information about us, you should read the information in this presentation together with our filings with the SEC, which may be accessed at the SEC s website ( 2

3 COMPANY HIGHLIGHTS EMERGING GROWTH - PURE PLAY PRODUCT TANKER COMPANY Attractive, Modern Fleet including eco Vessels Reputable Customer Base & Diversified Chartering Strategy Experienced, Incentivized Management & Prominent Board Competitive Cost Structure & Solid Balance Sheet Young tanker fleet of 6 vessels on the water with weighted average age of 4.8 years (dwt) Focus on modern medium range ( MR ) product tankers - operational flexibility and expected future enhanced earnings, especially due to their eco features or modifications Pursue potential sale or long-term strategy for small tankers Built-in growth potentially 1 or 2 additional MR s to be delivered by drop-downs Long-standing relationships with reputable, first-class customers worldwide Mixed operating strategy of time charter and spot market exposure 2016 charter coverage 61% of available days Positioned to capitalize when spot rates improve with flexibility to obtain attractive longer term charters Strong management team with over 70 years of combined shipping industry experience Founder/CEO has proven track record of investing through various shipping cycles and is a substantial shareholder Independent Board Members consist of prominent figures in maritime industry and/or with significant US capital markets experience see Exhibit II Board of Directors Disciplined ship management leads to safe and efficient operations and cost competitive results Comparable total daily cash operational costs to peer group Moderate capitalization with low cost, long-lived bank debt Excess balance sheet capacity to grow tonnage through acquisitions 3

4 COMPANY STRATEGY QUALITY, GROWTH, SERVICE & FLEXIBILITY Maintain High Quality Fleet of Modern Tankers Meet charterers preference for modern tankers, which offer more operating reliability and efficiency Focus on eco-efficient and eco-modified designed MR vessels which provide lower fuel consumption and reduced emissions Maintain quality fleet through comprehensive planned and preventive maintenance programs Maintain high standards in order to provide customers with high level of safety, customer service and support, while continuing ship level financial discipline Grow Fleet Opportunistically Focus on acquisition of IMO II and III class product tankers of eight years of age or less built in Tier 1 Asian shipyards Potential acquisition opportunity of one or two MR tankers owned/controlled by affiliates of our CEO Utilize Portfolio Approach for Commercial Employment Employ vessels primarily through time charters (with and without profit share) and on the spot market Diversify charters by customer and staggered duration Position employment to capture upside during periods of market strength Maintain Financial Flexibility Expand fleet by targeting balanced capital structure of debt and equity Maintain commercial banking and expand public capital markets relationships 4

5 FLEET & EMPLOYMENT OVERVIEW STABLE, VISIBLE CASH FLOWS WITH UPSIDE OPPORTUNITY Chartering strategy provides stable, visible cash flows from time charters and upside opportunity through spot trading when rates improve Fleet Details (as of March 1, 2016) Vessel Shipyard Vessel Type Size (dwt) Year Built Type of Charter Anticipated Redelivery Date (1) Pyxis Epsilon SPP / S.Korea MR 50, Time Jan Pyxis Theta SPP / S.Korea MR 51, Time Sept Pyxis Malou SPP / S.Korea MR 50, Time June 2016 Pyxis Delta Hyundai / S.Korea MR 46, Time Sept Northsea Alpha Kejin / China Small Tanker 8, Time Oct Northsea Beta Kejin / China Small Tanker 8, Spot N/A 61% of available days in 2016 are under charter coverage (65% with options), average T/C duration 7 months Fleet Employment Overview Vessel Pyxis Epsilon Pyxis Theta Pyxis Malou Pyxis Delta Northsea Alpha Northsea Beta Spot Trade $16,575 / day $15,600 / day $18,200 / day $18,000 / day $9,650 / day N/A 1) Each time charter contains provision that allows for redelivery +/-30 days, except the Pyxis Delta which allows 15 days. Pyxis Epsilon s charterer has option to extend charter one year for $18,050/day. Pyxis Theta s charterer has option to extend charter one year for $16,600/day and additional year for $17,600/day. Pyxis Delta s charterer has exercised its option to extend the charter six months effective March 4, These tables are dated as of March 1, 2016 and show gross rates and do not reflect commissions payable. 5

6 STRONG RELATIONSHIPS QUALITY VESSELS & OPERATIONS, BLUE CHIP CUSTOMERS, ATTRACTIVE LENDING TERMS SHIPYARDS CUSTOMERS BANKS 6

7 SENIOR MANAGEMENT EXPERIENCED TEAM WITH DECADES OF EXPERIENCE Valentios Eddie Valentis Chairman & CEO 25+ years of experience in owning, operating and managing within various shipping sectors, including product, dry bulk, chemical, as well as salvage and towage Founder of Pyxis Tankers in 2015 and Pyxis Maritime Corp. in 2007 For the last 15 years, Managing Director & Principal of KONKAR SHIPPING AGENCIES S.A., an Athensbased dry bulk owner-operator established in 1968 Henry Williams CFO & Treasurer Joined Pyxis affiliates in 2015; 35 years of commercial, investment and merchant banking experience Previous investment banking positions include Nordea Markets (Oslo & NY) Global Sector Head- Shipping, and Oppenheimer (NY) Head of Energy & Transportation Konstantinos Kostas Lytras Chief Operating Officer Joined Pyxis affiliates in 2008; 24+ years of experience in the shipping industry Co-founder of Navbulk Shipping S.A., a start-up dry bulk company 5 years as Financial Director of Neptune Lines, a car carrier company 16 years in various financial and operational positions for other ship owning and services companies Antonios Tony Backos SVP for Corporate Development, General Counsel & Secretary Joined Pyxis affiliates in 2013; 18+ years experience in strategic corporate shipping transactions Previous 5 years securities and M&A partner at Watson Farley & Williams with particular focus in shipping industry Advised on complex international corporate shipping transactions in New York offices of Orrick, Herrington & Sutcliffe LLP and Healy & Baillie, LLP and in New York and London offices of Weil, Gotshal & Manges LLP since 1997 Former member of Board of Governors & Vice President of the Connecticut Maritime Association 7

8 PYXIS ORGANIZATIONAL STRUCTURE LEAN, EFFICIENT ORGANIZATIONAL STRUCTURE Our streamlined structure allows management to minimize costs and focus on creating long term shareholder value PYXIS MARITIME CORP. ( Maritime ), the tanker management company founded by our CEO, provides the services of our executive officers and other administration for a fixed yearly fee and performs commercial management and supervises technical management of our fleet Very cost competitive ship management fees provide safe and efficient operating results compared to peers Maritime supervises commercial management of Northsea Alpha and Northsea Beta by North Sea Tankers BV, an unaffiliated 3rd party We outsource day-to-day technical management of all of our vessels to unaffiliated 3rd party, International Tankers Management ( ITM ), an ISO certified manager Administrative, Commercial & Ship Management Services (1) Administrative & Ship Management Fees Northsea Alpha/Beta Management (2) Technical Management (3) Quality, Cost Effective Ship Management Services (1) Provides the commercial management for the Pyxis Epsilon, Pyxis Theta, Pyxis Malou and the Pyxis Delta and supervises the crewing and technical management performed by ITM for all our vessels and the chartering of the Northsea Alpha and the Northsea Beta, which is performed by NST (2) Provides commercial management for the Northsea Alpha and Northsea Beta (3) Provides technical management for all our vessels 8

9 MARKET OVERVIEW PRODUCT TANKER INDUSTRY

10 PRODUCT MARKETS OVERVIEW SUMMARY Our vessels transport refined petroleum products (known as CPP or clean petroleum products including gasoline, diesel oil, gasoil and jet fuel as well as DPP or dirty petroleum products such as fuel oil) and certain bulk liquids such as edible oils and certain specific chemicals From 2005 to 2015, seaborne trade of refined products grew by an annual compound growth rate of 3.7% ( CAGR ) to approximately 905 million tons and edible oils and other bulk liquids by a CAGR of 3.7% to about 220 million tons; product tanker ton mile demand grew by a CAGR of 5.5% As of January 2016, the worldwide fleet of tankers that carry such cargoes consisted of 2,428 vessels with million dwt (excluding tankers below 10,000 dwt)* International Maritime Organization rated IMO-II and III specification vessels are able to carry easy chemicals, vegetable oils and bio-fuels Larger tankers represent a majority of total worldwide capacity MR1 or Medium Range 1 tankers are typically 25,000 36,999 dwt MR2 or Medium Range 2 tankers are typically 37,000 54,999 dwt LR1 or Long-Range 1 tankers are typically 55,000 79,999 dwt LR2 or Long-Range 2 tankers are typically 80,000+ dwt Charter rates and stable operating costs led to higher product tanker earnings in 2015; positive outlook for 2016 Sources: * Drewry 10

11 PRODUCT TANKER INDUSTRY DEMAND Solid worldwide GDP growth expected in near-term: 3.4% in 2016 and 3.6% in 2017* Seaborne product trade and ton mile demand increased 2.5% and 4.2% in 2015, respectively.** Major factors include: The shift of refineries away from points of consumption resulting in greater ton-mile demand, especially for larger tankers Refined product trade is much more complicated than crude oil trade due to refinery capacity and technology, government regulations of fuel standards and arbitrage opportunities Lower crude/feedstock prices generate positive refinery crack spreads and incremental demand for broad range of CPP Growth in net refining capacity is expected to drive the demand for product tankers based on the following ongoing trends: U.S. has become a major supplier of gasoil/diesel and gasoline in the Atlantic Basin market Emerging markets in South America and Africa, which have little to no refining capacity, require CPP to fuel their economies The closure of inefficient European refineries, improving European domestic demand and stricter fuel and environmental standards are creating a strong import and export market for various clean products Global adoption of standardized CPP specifications are increasing trading opportunities Expansion of new refineries in the Middle East and India focusing on refined product exports Sources: * IMF report January 2016; ** Drewry 11

12 PRODUCT TANKER INDUSTRY MR SUPPLY As of January 2016, the worldwide MR fleet stood at 1,661 tankers with 75.7 million dwt and avg. age ~9 yrs.* Total MR orderbook has fallen from high of ~58% in 2008 to 13.2% of the existing global fleet. MR2 orderbook consisted of 209 tankers of which over 50% is scheduled to be delivered in 2016* Shipbuilding capacity booked into late 2017: Current MR2 newbuild construction prices of approximately $35-36 million, below 10 year average price with limited new orders Worldwide MR fleet is expected to grow on average 5.5%/year in 2016 and 2017, exclusive of scrapping of older vessels and delays in new vessel deliveries* Most of the private equity backed orders have been delivered Access to cost-effective capital still important factor in funding newbuild deliveries Level of scrapping will affect future supply: Only 3 MR tankers were removed from the global fleet in 2015* But, 5.5% of worldwide MR fleet is 20+ years of age *Source: Drewry 12

13 SOLID OUTLOOK MR2 CHARTER RATES, RUNNING COSTS & ASSET VALUES 1,538 MR2 vessels (37-54,999 dwt) represent over 53% of global fleet of product tankers Charter rates improved in 2015 and are currently above 8 yr. avg. but significantly below peak Healthy MR2 chartering environment*: 2015 Jan 2016 Avg. Spot rates /day (Caribs- USAC) $20,400 $19,600 Avg. 1 yr. time charter $17,271 $18,500 Vessel running costs improving: Stable operating costs with little inflation and dramatically lower bunker fuel and lubricant costs (depending on location 50-67% decline since 2014) Increasing ship values: Re-sale of newbuild MR2 with prompt delivery is estimated $36-37 million, at least $1-2 million difference for yard delivery in late 2017 Five year old MR2 values rose in 2015 but are below 10 yr. avg. Current estimated values approx. $27 Million * Drewry 13

14 PYXIS TANKERS FINANCIAL SUMMARY

15 UNAUDITED INCOME STATEMENT TWELVE MONTHS ENDED DECEMBER 31, 2014 & 2015 In 000 USD except per share data Twelve Months ended December 31, 2014 December 31, 2015 Higher Earnings from Revenue Growth Voyage revenues $27,760 $33,170 Voyage costs (10,030) (4,725) Vessel operating expenses (11,064) (13,188) General & adm. expenses (93) (1,773) Management fees (1,533) (1,638) Depreciation & amortization (5,649) (5,884) Impairment (16,903) - Operating income (17,539) 5,962 Interest and finance costs (1,704) (2,531) Other Income - 74 Net income / (loss) (19,243) 3,505 EPS $(1.05) $0.19 TCE/day * $10,466 $13,600 Number of Ships at end of period 5 6 Utilization * 93.8% 97.9% Adjusted EBITDA ( 000) * $5,040 $12,063 * Please see Exhibit I Non- GAAP Measures and Definitions 15

16 UNAUDITED INCOME STATEMENT THREE MONTHS ENDED DECEMBER 31, 2014 & 2015 In 000 USD except per share data Three Months ended December 31, 2014 December 31, 2015 Voyage revenues $7,175 $8,370 Significant EBITDA Growth Voyage costs (2,170) (1,263) Vessel operating expenses (2,602) (3,133) General & adm. expenses (48) (741) Management fees (386) (414) Depreciation & amortization (1,414) (1,512) Impairment (16,930) - Operating income (16,375) 1,307 Interest and finance costs (400) (673) Net income / (loss) (16,775) 634 EPS $(0.92) $0.03 TCE/day * $11,218 $13,612 Number of Ships at end of period 5 6 Utilization * 97.0% 94.6% Adjusted EBITDA ( 000) * $1,969 $2,962 * Please see Exhibit I Non- GAAP Measures and Definitions 16

17 RECENT DAILY FLEET DATA THREE & TWELVE MONTHS ENDED DECEMBER 31, 2014 & 2015 Cost Effective, Safe Operations (amounts in $) Year ended December 31, Three Months Ended December 31, Eco-Efficient MR2:(2 units) Average TCE * 15,210 15,631 15,210 15,672 Opex * 5,584 6,430 5,134 5,771 Utilization % * 100.0% 99.4% 100.0% 100.0% Eco-Modified MR2:(1 unit) TCE 12,596 17,480 14,075 15,109 Opex 6,802 6,461 5,976 6,229 Utilization % 86.4% 91.3% 87.0% 72.8% Standard MR2:(1 unit) TCE 12,019 17,237 13,265 19,003 Opex 6,739 6,325 6,904 6,141 Utilization % 95.4% 100.0% 99.7% 100.0% Handysize Tankers:(2 units) Average TCE 6,200 7,622 6,926 8,167 Opex 5,581 5,358 5,088 5,071 Utilization % 93.4% 98.6% 99.2% 97.4% Fleet:(6 units) TCE 10,466 13,600 11,218 13,612 Opex 6,062 6,058 5,657 5,676 Utilization % 93.8% 97.9% 97.0% 94.6% * Please see Exhibit I Non- GAAP Measures and Definitions 17

18 TOTAL DAILY OPERATIONAL COSTS/VESSEL THREE MONTHS ENDED DECEMBER 31, 2015 Our Total Daily Operational Costs are Comparable or Better than our Peers (amounts in $/day) Eco-Modified Eco-Efficient OPEX $6,229 $5,771 Technical & Commercial Management Fees Cash G&A Expenses * 1,083 1,083 Total Daily Operational Costs/Vessel $8,062 $7,604 * Cash G&A Expenses equals General & administrative expenses of $741,000 less non-cash stock compensation of $143,000 divided by six tankers divided by 92 days for the period 18

19 CAPITALIZATION AT DECEMBER 31, 2015 In 000 USD At December 31, 2015 Moderate Approach to Leverage at Low Interest Costs Cash and cash equivalents (1) $ 8,622 Total debt (2) 83,051 Shareholders' equity 54,566 Total Capitalization $ 137,617 Net debt $ 74,429 Debt/Total Capitalization 60.3% Net Debt/Total Capitalization 54.1% (1) Includes restricted cash (2) Weighted average interest rate of 2.78% at December 31,

20 MANAGEMENT INCENTIVIZED TO ACHIEVE GROWTH FOUNDER/CEO S SUBSTANTIAL SHAREHOLDINGS The shareholder base as of March 1, 2016 was: Maritime Investors (affiliate of our CEO) 17,002,445 (93.2% of outstanding) Public 931,761 (5.1%) Maxim Group 310,465 (1.7%) Total Shares Outstanding 18,244,671 (100%) Our common shares are listed on NASDAQ Capital Markets under trading symbol PXS Our Founder/CEO has substantial shareholdings and his interests are aligned with our other shareholders 20

21 COMPANY HIGHLIGHTS EMERGING GROWTH - PURE PLAY PRODUCT TANKER COMPANY Attractive, Modern Fleet including eco Vessels Reputable Customer Base & Diversified Chartering Strategy Experienced, Incentivized Management & Prominent Board Competitive Cost Structure & Solid Balance Sheet Young tanker fleet of 6 vessels on the water with weighted average age of 4.8 years (dwt) Focus on modern medium range ( MR ) product tankers - operational flexibility and expected future enhanced earnings, especially due to eco features or modifications Pursue potential sale or long-term strategy for small tankers Built-in growth potentially 1 or 2 additional MR s to be delivered by drop-downs Long-standing relationships with reputable, first-class customers worldwide Mixed operating strategy of time charter and spot market exposure Positioned to capitalize when spot rates improve with flexibility to obtain attractive longer term charters 2016 charter coverage 61% of available days Strong management team with over 70 years of combined shipping industry experience Founder/CEO has proven track record of investing through various shipping cycles and is a substantial shareholder Independent Board Members consist of prominent figures in maritime industry and/or with significant US capital markets experience Disciplined ship management leads to safe and efficient operations and cost competitive results Moderate capitalization with low cost, long-lived bank debt Excess balance sheet capacity to grow tonnage through acquisitions 21

22 CONTACT Pyxis Tankers Inc. K.Karamanli 59 Maroussi 15125, Greece Henry Williams CFO & Treasurer Phone: / Antonios Tony Backos SVP for Corporate Development, General Counsel and Secretary Phone:

23 EXHIBIT I NON-GAAP MEASURES AND DEFINITIONS Adjusted EBITDA, which is not a recognized measurement under U.S. GAAP, is reconciled below to its nearest GAAP equivalent. Adjusted EBITDA represents net income before interest, income tax expense, depreciation, amortization, vessel impairment charge and stock compensation. Adjusted EBITDA is presented as we believe that it provides investors with a means of evaluating and understanding how our management evaluates operating performance. This non-gaap measure should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S.GAAP. In addition, this non-gaap measure does not have a standardized meaning, and is therefore, unlikely to be comparable to similar measures presented by other companies. Year Ended December December (In thousands of U.S. Dollars) 31, , 2015 Reconciliation of Net income to Adjusted EBITDA Three months Ended December December 31, , 2015 Net income / (loss) $ (19,243) $ 3,505 $ (16,774) $ 634 Depreciation 5,446 5,710 1,373 1,450 Amortization of special survey costs Interest and finance costs, net 1,704 2, Vessel impairment charge 16,930 16,930 Stock compensation Adjusted EBITDA $ 5,040 $ 12,063 $ 1,969 $ 2,962 23

24 EXHIBIT I NON-GAAP MEASURES AND DEFINITIONS Continued Daily time charter equivalent ( TCE ) is a standard shipping industry performance measure of the average daily revenue performance of a vessel on a per voyage basis. TCE is not calculated in accordance with U.S. GAAP. We utilize TCE because we believe it is a meaningful measure to compare period-to-period changes in our performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which our vessels may be employed between the periods. Our management also utilizes TCE to assist them in making decisions regarding employment of the vessels. We believe that our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues after deducting voyage expenses, including commissions by operating days for the relevant period. Voyage expenses primarily consist of brokerage commissions, port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charter under a time charter contract. Vessel operating expenses per day ( Opex ) are our vessel operating expenses for a vessel, which consist primarily of crew wages and related costs, insurance, lube oils, communications, spares and consumables, tonnage taxes as well as repairs and maintenance, divided by the days in the applicable period. We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during the same period. The shipping industry uses fleet utilization to measure a company s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys and intermediate dry-dockings or vessel positioning. Operating days are the number of available days in a period, less the aggregate number of days that our vessels were offhire or out of service due to any reason, including technical breakdowns and unforeseen circumstances. Available days are the number of ownership days in a period, less the aggregate number of days that our vessels were off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and intermediate dry-dockings and the aggregate number of days that we spent positioning our vessels during the respective period for such repairs, upgrades and surveys. Ownership days are the total number of days in a period during which we owned each of the vessels in our fleet. 24

25 EXHIBIT II BOARD OF DIRECTORS MEMBERS WITH DECADES OF EXPERIENCE Valentios Eddie Valentis Robin P. Das See Senior Management slide Shipping finance and investment banking experience since 1995 Founder of Auld Partners Ltd, a boutique shipping and finance advisory firm From 2011 to 2012, Managing Director (partner) of Navigos Capital Management, an asset management firm focused on shipping sector Until October 2011, Global Head of Shipping at HSH Nordbank, the largest lender then globally to shipping Robert B. Ladd 30 years of professional investment advisory experience; a Chartered Financial Analyst President & CEO of MGT Capital Investments, Inc. (NYSE: MGT) since 2012 and past director of two NASDAQ listed companies Managing member of Laddcap Value Advisors, LLC, an investment manager 18 years with Neuberger Berman, including as Managing Director Basil G. Mavroleon Aristides J. Pittas Shipping industry experience of 45 years Since 1970 has worked at Charles R. Weber Company Inc., one of the oldest and largest tanker brokerages and marine consultants in the U.S. and currently serves as director of Genco Shipping & Trading (NYSE: GNK), a dry bulk company, and Managing Director of WeberSeas (Hellas) S.A., a comprehensive Sale & Purchase, newbuilding, marine projects and ship finance broker based in Piraeus, Greece Serves on the board of industry associations including Intertanko and the Association of Ship Brokers and Agents, and past director of two NASDAQ listed companies 30+ years of shipping industry experience Since 2005, has been Chairman & CEO of Euroseas Ltd. (NASDAQ: ESEA), a dry bulk and container ship company President of Eurochart and Eurobulk, affiliates of Euroseas, since 1992 and 1995, respectively From 1990 to 1994, served as the Assistant to the General Manager and Head of the Planning Department of Varima International SA, a tanker vessel company, and then Vice President of Oceanbulk Maritime SA, a ship management company 25