COMPANY PRESENTATION. January 2018

Transcription

1 COMPANY PRESENTATION January 2018

2 DISCLAIMER FORWARD-LOOKING STATEMENTS & INFORMATION This presentation contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The words expected'', estimated, scheduled, could, anticipated, long-term, opportunities, potential, continue, likely, may, will, positioned, possible, believe, expand 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. But the absence of such words does not mean that a statement is not forward-looking. Forward-looking information is based on the opinions, expectations and estimates of management of Pyxis Tankers Inc. ( we, our or Pyxis ) 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 or implied in such information. Factors that might cause or contribute to such discrepancy include, but are not limited to, the risk factors described in our Annual Report on Form 20-F for the year ended December 31, 2016 and our other 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 EMERGING GROWTH - PURE PLAY PRODUCT TANKER COMPANY Growth Oriented with Attractive, Modern Fleet Focus on modern medium range ( MR ) product tankers with eco features Young tanker fleet of six IMO-certified vessels - weighted average age of ~6.9 years Management may pursue a sale or other long-term strategy relating to small tankers Reputable Customer Base & Diversified Chartering Strategy Long-standing relationships with first-class customers worldwide 11% of available days in 2018 are covered, exclusive of options Positioned to capitalize when charter rates improve Competitive Cost Structure & Moderate Capitalization Disciplined fixed cost structure creates greater earnings power when rates improve Competitive total daily operational costs to peer group Moderate capitalization with low cost, long-lived bank debt Experienced, Incentivized Management & Prominent Board Favorable Industry Fundamentals Create Attractive Entry Point Strong mgmt. team with 100+ years of combined industry and capital markets experience Founder/CEO has proven track record and is a major shareholder Board members consist of respected industry figures and/or with significant experience IMF s global annual growth of 3.9% should result in demand outpacing supply through 2019 Lowest MR2 orderbook since 2000 with scheduled deliveries of 2.7% / yr. for Increased scrapping expected 5.8% of the MR2 fleet greater than 20 years old New environmental regulations could affect older vessels leading to further scrapping and slow steaming 3

4 Fleet Employment Overview Fleet Details FLEET & EMPLOYMENT OVERVIEW POSITIONED FOR UPSIDE OPPORTUNITIES Our mixed chartering strategy provides upside opportunities through spot trading when rates improve and stable, visible cash flows from time charters Vessel Shipyard Vessel Type Carrying Capacity (dwt) Year Built Type of Charter Anticipated Redelivery Date (1) Pyxis Epsilon SPP / S.Korea MR 50, Time May 2018 Pyxis Theta SPP / S.Korea MR 51, Spot N/A Pyxis Malou SPP / S.Korea MR 50, Spot N/A Pyxis Delta Hyundai / S.Korea MR 46, Time May 2018 Northsea Alpha (2) Kejin / China Small Tanker 8, Spot N/A Northsea Beta (2) Kejin / China Small Tanker 8, Spot N/A Total 216,635 Avg. Age 6.9 Years 11% of anticipated available days for 2018 are covered, exclusive of options Vessel 2018 Pyxis Epsilon Pyxis Theta Pyxis Malou Pyxis Delta Northsea Alpha Northsea Beta Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. $16,250 / Day N/A N/A $14,325 / Day N/A N/A Fixed Employment Charterers Optional Period Open Days (1) These tables are dated as of January 22, 2018 and show gross rates and do not reflect commissions payable. (2) Management may pursue sale or other long-term strategy for small tankers. 4

5 STRONG RELATIONSHIPS QUALITY VESSELS & OPERATIONS BLUE CHIP CUSTOMERS ATTRACTIVE LENDING TERMS SHIPYARDS CUSTOMERS SENIOR LENDERS 5

6 SENIOR MANAGEMENT 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 in 2015 and Pyxis Maritime Corp. in 2007 For the last 16 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; 25+ 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; 19+ years experience in strategic corporate shipping transactions Previous 5 years securities and M&A partner at Watson Farley & Williams with particular focus in the 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 6

7 PYXIS ORGANIZATIONAL STRUCTURE LEAN, EFFICIENT, SCALABLE ORGANIZATIONAL STRUCTURE Quality, Cost Effective Ship Management Streamlined structure minimizes costs and allows management to focus on creating long term shareholder value Very competitive ship management $750/day/vessel provide safe and efficient operating results compared to peers Administrative, Commercial & Ship Management Services (1) Administrative, Commercial & Ship Management Fees Technical Management (2) (1) As an affiliate, provides the commercial management for the fleet and supervises the crewing and technical management performed by ITM for all our vessels (2) Provides technical management for all our vessels 7

8 COMPANY STRATEGY FOCUS ON QUALITY, GROWTH, SERVICE & FINANCIAL FLEXIBILITY Grow the Fleet Opportunistically Focus on acquisition of IMO II and III MR2 class product tankers of eight years of age or less built in Tier 1 Asian shipyards Prudently grow company size as soon as practical Focus on the Needs of our Customers Meet charterers preference for modern and eco tankers, which offer more operating reliability and efficiency Maintain high standards ensuring high level of safety, customer service and support Continue solid margins and ship level financial discipline within Pyxis Utilize Portfolio Approach to Commercial Management Employ mixed chartering strategy between time and spot Maintain optionality spot exposure offers upside during periods of market strength Diversify charters by customer and staggered duration Maintain Financial Flexibility Expand fleet by targeting balanced capital structure of debt and equity Maintain commercial lending and expand capital markets relationships 8

9 PRO-FORMA CAPITALIZATION AT SEPTEMBER 30, 2017 At September 30, 2017 In 000 USD ACTUAL PRO-FORMA * Moderate leverage at low interest costs No bank balloon payments scheduled until Q Cash and cash equivalents, including restricted cash $ 5,604 9,904 Bank debt, net of deferred financing fees 67,804 67,804 Promissory note 2,500 5,000 Total funded debt $ 70,304 72,804 Stockholders' equity 44,959 49,259 Total capitalization $ 115, ,063 Net funded debt $ 64,700 62,900 Total funded debt / total capitalization 61.0% 59.6% Net funded debt / total capitalization 56.1% 51.5% Weighted average interest rate of total debt for the nine months ended September 30, 2017 was 3.68% Pro-forma recent developments: PIPE Offering: Issued 2.4 million restricted shares of common stock, resulting in $4.3 million net proceeds Maritime Investors Promissory Note: Increased outstanding balance from $2.5 million to $5.0 million * Excludes scheduled bank principal payments of $1.7 million since September 30,

10 MANAGEMENT INCENTIVIZED TO ACHIEVE GROWTH FOUNDER/CEO S SUBSTANTIAL SHAREHOLDINGS Common shares listed on NASDAQ Capital Market under trading symbol PXS The shareholder base as of January 22, 2018: Maritime Investors Corp. & other affiliate of our CEO 17,007,445 (81.5% of outstanding) Public Float 3,870,448 (18.5%) Total Shares Outstanding 20,877,893 (100%) Our Founder/CEO s substantial shareholdings and interests are aligned with our shareholders 10

11 MARKET OVERVIEW PRODUCT TANKER INDUSTRY

12 REFINED PRODUCTS OVERVIEW PRODUCT CARRYING VERSATILITY Crude Crude tankers carry only crude oil and fuel oils. Dirty Products Clean Products Veg Oil/Light Chemicals Petroleum Products Bitumen Fuel Oil Cycle Oils Diesel/Gasoil Kerosene Gasolines Clean Condensates Naphthas Other Bulk Liquids Vegetable Oils & Organic Chemicals Most products tankers can switch between clean and dirty products when the tanks are carefully cleaned. Gasoil is a good clean up cargo when switching from dirty to clean products. More sophisticated product tankers work at this end of the market, some with the ability to carry products and certain chemicals. Non-oil substances now covered by revised IBC Code. To carry chemicals, an IMO Certificate of Fitness is required. Source: Drewry, January

13 CHANGING TRADE ROUTES & PETROLEUM REFINERY LANDSCAPE CREATING INCREMENTAL DEMAND Increases in Demand due to Changing Trade Routes & Refining Landscape 1,100 1,050 1, % CAGR* in million tons of seaborne trade 4.3% CAGR in ton mile demand 3,300 3,100 2,900 2,700 2,500 2,300 2,100 1,900 1, E Seaborne Product Trade - Million Tons (Left Hand Scale) Ton Mile Demand - Billion Ton Miles (Right Hand Scale) 1,500 Source: Drewry, January 2018 * Compound annual growth rate 13

14 EVOLVING TRADE ROUTES WITH TON MILES INCREASING Increases in Long-Haul Routes R R R New Refineries Growth in net refining capacity expected to further drive demand for product tankers Lower crude / feedstock prices generate incremental refinery demand Arbitrage between markets create further opportunities Emerging, growing markets in South America and Africa have little to no refining capacity U.S. exports to South America have grown at CAGR of ~15.2% from 2007 to 2017 Source: Drewry, January

15 Million Barrels per Day U.S. HAS BECOME MAJOR EXPORTER OF REFINED PRODUCTS Increase in refinery capacity due to proliferation of shale oil production United States Saudi Arabia India Source: Drewry, January

16 Million Barrels per Day REFINERY CAPACITY ADDITIONS FURTHER AWAY FROM END USERS BOOSTING TON-MILE DEMAND Expected Petroleum Refinery Capacity Additions Driven by Non-OECD Growth & Exports Source: Drewry, January

17 Number of Vessels MR2 ORDER BOOK AT LOWEST LEVEL SINCE 2000 Expected Delivery Schedule Medium Range 2 (MR2) Total MR2 vessel orderbook has fallen from a ~48% high in 2007 of the then existing fleet to 6% (98 MR2 vessels) of the worldwide fleet, lowest since 2000 MR2: Low ordering 52 MR2 s in 2017 (3.2% of global fleet) Limited capacity additions scheduled beyond 2018 due to continued financial problems/restructurings/closures at shipyards and limited availability of cost-effective capital Worldwide MR2 fleet is expected to grow at an average of 2.7% (gross) per annum in 2018 and 2019, without giving effect to scrapping of older vessels and slippage of deliveries Source: Drewry, January

18 MR2 SCRAPPING EXPECTED TO INCREASE Global Fleet Age Distribution by Tonnage 35% 30% 25% 20% 15% 10% 5% 0% < 5 Yrs 5-10 Yrs Yrs Yrs Yrs 25+ Yrs MR2 Average age of MR2 fleet is 9.7 years 95 MR2 vessels (5.8%) are 20 years old or more Less than 1% scrapping in 2017 Sizeable portion of the fleet is approaching end of its useful life - future supply will affect replacement ability New environmental regulations should drive more scrapping Source: Drewry, January

19 NEW ENVIRONMENTAL REGULATIONS TO DRIVE MORE SCRAPPING Environmental regulations should lead to increased scrapping Force owners to either scrap earlier or make significant vessel capital expenditures to remain operationally competitive 166 MR2 (10.2% of world fleet) are 17 year old + Ballast Water Treatment System ( BWTS ) Ballast sea water is used to stabilize vessels and ensure structural integrity; Pumped before/after cargo is loaded/unloaded Starting September 2019 at vessel s next special survey, owners will have to install approved BWTS, which removes inactive organisms from ballast water prior to discharge Retrofits in older tankers can be challenging and costly Depending on vessel, fully loaded installation costs expected to be between $0.50 million to $0.75 million for a standard MR tanker New stricter regulations on sulfur emissions starting January 2020 Limits reduced from 3.5% to 0.5% Owners either i) install expensive scrubber (~$3.0 million+ cost vs. ~$4.0 million vessel scrap value) to burn current grade of fuel, or ii) pay sizeable premium (currently ~ $240 per ton or $7,200 per day) to burn marine gas oil (MGO) fuel and run vessel at slower speed Source: Drewry, January

20 MR2 CHARTER RATES POSITIONED FOR REBOUND USD per Day USD per Day Daily MR2 Time Charter Equivalent Spot Rates (Caribs-USAC) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year Average 1 Year MR2 Time Charter Equivalent Rates * 30,000 25,000 20,000 15,000 10,000 5,000 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan MR2 Avg. Rate Average $12,736 Low $1,800 High $32,400 Dec $13, MR2 Avg. Rate Average $15,155 Low $10,800 High $25,000 Dec $14,000 Source: Drewry, January 2018 * Please see Exhibit I - Non-GAAP Definitions MR2 10 Year Average 20

21 USD Million HISTORICAL LOW MR2 ASSET VALUES CREATE ATTRACTIVE ENTRY POINT MR2 Asset Prices NB Price NB Price Average SH Price SH Price Average Type Dec Yr. Average Difference New Build Construction (delivery mid 19) * $33.0 $37.1 (11.0%) 5 yr. old $25.0 $28.8 (13.3%) Source: Drewry, January 2018 * Exclusive of higher design specifications, yard supervision costs and spares 21

22 INVESTMENT HIGHLIGHTS EMERGING GROWTH - PURE PLAY PRODUCT TANKER COMPANY Growth Oriented with Attractive, Modern Fleet Favorable Industry Fundamentals Create Attractive Entry Point Reputable Customer Base & Diversified Chartering Strategy Experienced, Incentivized Management & Prominent Board Competitive Cost Structure & Moderate Capitalization 22

23 CONTACT Pyxis Tankers Inc. K.Karamanli 59 Maroussi 15125, Greece Henry Williams CFO & Treasurer Phone: /

24 EXHIBIT I NON-GAAP DEFINITIONS Daily time charter equivalent ( TCE ) is a 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 calculate TCE by dividing voyage revenues after deducting voyage related costs and commissions by operating days for the relevant period. Voyage related costs and commissions primarily consist of brokerage commissions, port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract. 24