COMPANY PRESENTATION November 2019 DISCLAIMER FORWARD-LOOKING STATEMENTS & INFORMATION
This document includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 in order to encourage companies to provide prospective information about their business. These statements include statements about our plans, strategies, goals financial performance, prospects or future events or performance and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expects," "seeks," "predict," "schedule," "projects," "intends," "plans,“ "anticipates," "believes," "estimates," "potential," "likely" and variations of these terms and similar expressions, or the negative of these terms or similar expressions.
Such forward-looking statements are necessarily based upon estimates and assumptions. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. The Company’s actual results may differ, possibly materially, from those anticipated in these forward-looking statements as a result of certain factors, including changes in the Company’s financial resources and operational capabilities and as a result of certain other factors listed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. For more information about risks and uncertainties associated with our business, please refer to our filings with the U.S. Securities and Exchange Commission, including without limitation, under the caption “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2018. We caution you not to place undue reliance on any forward looking statements, which are made as of the date of this document. We undertake no obligation to update publicly any information in this document, including forward-looking statements, to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable 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 (http://www.sec.gov). 2 COMPANY OVERVIEW EMERGING GROWTH - PURE PLAY PRODUCT TANKER COMPANY
Growth Oriented ► Focus on modern medium range (“MR”) product tankers with “eco” features with Attractive, ► Modern tanker fleet of six IMO-certified vessels - weighted average age of 8.7 years Modern Fleet ► Management pursuing a sale or other long-term strategy for small tankers
► Long-standing relationships with first-class customers worldwide Reputable Customer ► As of November 11, 57% of remaining 2019 available days booked, average gross charter Base & Diversified rate of $15,300 for MRs Chartering Strategy ► Positioned to capitalize as charter rates are expected to further improve in Q4 2019 and after
► Disciplined, substantially fixed cost structure creates greater earnings power when Competitive Cost rates improve Structure & ► Competitive total daily operational costs to peer group Moderate Capitalization ► Moderate capitalization with long-lived funded debt ► Earliest scheduled balloon payment due Q3 2022
Experienced, Incentivized ► Strong mgmt. team with 90+ years of combined industry and capital markets experience Management ► Founder/CEO has proven track record and is a major shareholder & Prominent Board ► Board members consist of respected industry figures
Favorable Industry ► IMF’s global annual growth of 3.2% should help demand outpace supply through 2020 Fundamentals, plus ► Historically low and declining MR2 orderbook IMO 2020 Catalyst, ► Increased scrapping expected - 6% of global MR2 fleet 20 years old or more Create Attractive ► New environmental regulations, lead by IMO 2020, should be positive for MRs resulting in Entry Point incremental demand combined with lower available capacity 3 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
Current Charter Carrying Vessel Type of Charter Earliest Vessel Shipyard Capacity Year Built Type Charter rate (1) Redelivery Date (dwt) Pyxis Epsilon (2) SPP / S.Korea MR 50,295 2015 Time $15,350 March 2020 Pyxis Theta (2) SPP / S.Korea MR 51,795 2013 Time $15,375 May 2020 Pyxis Malou SPP / S.Korea MR 50,667 2009 Time $15,500 April 2020 Pyxis Delta Hyundai / S.Korea MR 46,616 2006 Time $14,500 November 2019 Northsea Alpha(3) Kejin / China Small Tanker 8,615 2010 Spot n/a n/a
Northsea Beta (3) Kejin / China Small Tanker 8,647 2010 Spot n/a n/a Fleet Details Fleet Avg. Age Total 216,635 9 Years
57% of the remaining days of 2019 & 18% of 2020, are covered, exclusive of charters’ options
Vessel 2019 2020 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept
Pyxis Epsilon
Pyxis Theta
Pyxis Malou
Overview Pyxis Delta
Northsea Alpha
Fleet Employment Fleet Northsea Beta
Fixed Employment Charterers Optional Period Spot Employment Open Days
(1) These tables are dated as of November 11th , 2019 and show gross rates and do not reflect commissions payable. (2) Pyxis Theta & Pyxis Epsilon have granted the charterer an option to extend the one year time charter for an additional 12 months (+/- 30 days) at a gross charter rate of $17,500/d. (3) Management pursuing sale or other long-term strategy for small tankers. 4 STRONG RELATIONSHIPS QUALITY VESSELS & OPERATIONS → BLUE CHIP CUSTOMERS → ATTRACTIVE LENDING TERMS
SHIPYARDS CUSTOMERS SENIOR LENDERS
5 SENIOR MANAGEMENT DECADES OF EXPERIENCE
► 25+ years of experience in owning, operating and managing within various shipping Valentios “Eddie” sectors, including product, dry bulk, chemical, as well as salvage and towage Valentis ► Founder of Pyxis in 2015 and Pyxis Maritime Corp. in 2007 Chairman & CEO ► For the last 16 years, Managing Director & Principal of KONKAR SHIPPING AGENCIES S.A., an Athens-based dry bulk owner-operator established in 1968
► Joined Pyxis affiliates in 2015; 35+ years of commercial, investment and merchant Henry Williams banking experience CFO & Treasurer ► Previous investment banking positions include Nordea Markets (Oslo & NY)–Global Sector Head- Shipping, and Oppenheimer (NY) – Head of Energy & Transportation
Konstantinos ► Joined Pyxis affiliates in 2008; 25+ years of experience in the shipping industry “Kostas” Lytras ► Co-founder of Navbulk Shipping S.A., a start-up dry bulk company Chief Operating ► 5 years as Financial Director of Neptune Lines, a car carrier company Officer &Corporate ► 16 years in various financial and operational positions for other ship owning and services Secretary companies
6 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 fees @ ~ $755/day/vessel provide safe and efficient operating results compared to peers
Administrative, Commercial & Ship Management Services (1) Technical Management (2) Administrative, Commercial & Ship Management Fees
(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. ITM is a third party vessel manager, part of the VShips Group, the largest 3rd party ship management provider in the world. 7 COMPANY STRATEGY FOCUS ON QUALITY, GROWTH, SERVICE & FINANCIAL FLEXIBILITY
► Focus on acquisition of IMO II and III MR2 class product tankers of 10 years of age Grow the Fleet or less built in Tier 1 Asian shipyards Opportunistically ► Prudently grow company size as soon as practical
► Meet charterers’ preference for modern and eco tankers, which offer more operating reliability and efficiency Focus on the Needs ► Maintain high standards ensuring high level of safety, customer service and support of our Customers ► Continue solid margins and ship level financial discipline within Pyxis
Utilize Portfolio ► Employ mixed chartering strategy between time and spot Approach to Commercial ► Maintain optionality – spot exposure offers upside during periods of market strength Management ► Diversify charters by customer and staggered duration
Maintain Financial ► Expand fleet by targeting balanced capital structure of debt and equity Flexibility ► Maintain commercial lending and expand capital markets relationships
8 MARKET OVERVIEW PRODUCT TANKER INDUSTRY REFINED PRODUCTS OVERVIEW PRODUCT CARRYING VERSATILITY
Crude tankers carry only crude oil and Crude fuel oils (except possibly maiden voyage). Dirty Products Petroleum Products
Bitumen Most products tankers can switch Fuel Oil between clean and dirty products when the tanks are carefully cleaned. Gasoil is Cycle Oils a good clean up cargo when switching Diesel/Gasoil from dirty to clean products. Kerosene More sophisticated product tankers work Gasolines at this end of the market, some with the Clean Condensates ability to carry products and certain chemicals. Naphthas Clean Products Non-oil substances now covered by Other Bulk Liquids revised IBC Code. To carry chemicals, Veg Oil/Light an IMO Certificate of Fitness is Vegetable Oils & Organic Chemicals Chemicals required.
Source: Drewry, September 2019 10 CHANGING TRADE ROUTES & PETROLEUM REFINERY LANDSCAPE CREATING INCREMENTAL DEMAND
Increases in Demand due to Changing Trade Routes & Refining Landscape 1,100 3,300 3.2% CAGR* in million tons of seaborne trade 1,050 3.5% CAGR in ton mile demand 3,100
1,000 2,900
950 2,700
900 2,500 850 2,300 800
2,100 750
1,900 700
650 1,700
600 1,500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Seaborne Product Trade - Million Tons (Left Hand Scale) Ton Mile Demand - Billion Ton Miles (Right Hand Scale)
Source: Drewry, September 2019 * Compound annual growth rate 11 EVOLVING TRADE ROUTES WITH TON MILES INCREASING
Major Long – haul MR2 Trade Routes
• 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 Latin America and Africa have little refining capacity • U.S. exports to Latin America have grown at CAGR of 12.9% from 2008 to 2018 Source: Drewry, September 2019 12 U.S. HAS BECOME MAJOR EXPORTER OF REFINED PRODUCTS
Increasing refined product exports due to proliferation of shale oil production
6.00
5.00
Day 4.00
3.00
2.00 Million BarrelsMillion per
1.00
0.00
May-09 May-10 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 United States Saudi Arabia
Source: Drewry, September 2019 13 REFINERY CAPACITY ADDITIONS FURTHER AWAY FROM END USERS → BOOSTING TON-MILE DEMAND
Expected Petroleum Refinery Capacity Additions Driven by Non-OECD Growth & Exports
4.0
3.5
3.0
2.5
2.0
1.5
1.0 Million Barrels per Day per Barrels Million 0.5
0.0
-0.5
2019 2020 2021 2022 2023
Source: Drewry, September 2019 14 DECLINING MR2 ORDER BOOK
Expected MR2 Delivery Schedule
100 90 80 70 60 50 40 30
20 Number of of VesselsNumber 10 0 Medium Range 2 (MR2)
Remainder of 2019 2020 2021+
• Total MR2 vessel orderbook has fallen from ~48% high in 2007 of the then existing fleet to 5.9% (101 vessels) of the worldwide fleet • Low ordering – 35 MR2’s in LTM ended August 2019 (2.1% of global fleet) • Limited capacity additions scheduled beyond 2019 of 72 MR2’s due to continued limited availability of cost-effective capital • Worldwide MR2 fleet is expected to grow at an annual gross rate of 3.8% through 2020, without giving effect to scrapping of older vessels and slippage of deliveries • Slippage of 17.9% in 2018 for new build MR2 deliveries
Source: Drewry, September 2019 15 MR2 SCRAPPING EXPECTED TO INCREASE
Global Fleet Age Distribution by Tonnage 35%
30%
25%
20%
15%
10%
5%
0% <5yrs 5-10 10-15 15-20 20-25 25+ yrs yrs yrs yrs yrs MR2
• Average age of MR2 fleet is 10.3 years • 102 MR2 vessels (6% of worldwide fleet) are 20 years old or more • 24 MR2 (1.3%) scrapped in 2018 • 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, September 2019 16 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 • 102 MR2 (6% of world fleet) are 20 year old or more
► 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 • Fully loaded installation costs estimated to be $0.6 million for a standard MR tanker
► New stricter regulations on sulfur emissions starting January 2020 • Limits reduced from 3.5% to 0.5% • MR2 owners either i) install expensive scrubber ($1.5 million cost vs. ~$3.75 million vessel scrap value) to burn current grade of fuel, or ii) pay sizeable premium (current range $170-290 per ton or $7,000-$8700 per day fully cargo laden) to burn marine gas oil (MGO) or LSFO and run vessel at slower speed
Source: Drewry, September 2019 17 MR2 CHARTER RATES POSITIONED FOR IMPROVEMENT
Daily MR2 Time Charter Equivalent* Spot Rates (Caribs-USAC) 30,000 Nov.09-Oct.19 MR2 Avg. Rate 25,000 20,000 Average $10,987
15,000 Low $1,100 10,000
USD per Day USD per High $26,700 5,000 0 Oct. 2019 $12,611 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2016 2017 2018 2019YTD 10 Year Average
1 Year MR2 Time Charter Equivalent Rates * 25,000 Dec.09-Nov.19 MR2 Avg. Rate 20,000 Average $14,096 15,000 Low $10,800 10,000
5,000 High $19,500 USD per Day USD per 0 Nov. 2019** $16,000 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 MR2 10 Year Average
Source: Drewry, October 2019 ** Ship broker indication * Please see Exhibit I- Definitions 18 MODERATE MR2 ASSET VALUES CREATE ATTRACTIVE ENTRY POINT
55 MR2 Asset Prices 50
45
40
35
30
25 USD USD Million 20
15
10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 NB Price NB Price Average 08-19 YTD SH Price - 5 Yrs Old SH Price 5 Yrs old Average 08-19 YTD SH Price - 10 Yrs Old SH Price 10 Yrs old Average 08-19 YTD
2008-2019 YTD Type ($ million) Current * Average ** Difference New Build (delivery Early ‘21) *** $36.6 $36.9 (1%) 5 yr. old 29.0 28.6 1% 10 yr. old 17.8 20.0 (12%) *Ship Broker average indications ** * Tier III vessel, exclusive of higher design specifications, yard supervision costs and spares ** Source: Drewry, September 2019, excludes Jones Act vessels 19 PYXIS TANKERS FINANCIAL HIGHLIGHTS CAPITALIZATION AT SEPTEMBER 30, 2019
At September 30, 2019
In ‘000 USD ACTUAL
Cash and cash equivalents, including restricted cash $ 4,622 Moderate leverage Institutional debt, net of deferred financing fees 59,305 Promissory note 5,000 Total funded debt $ 64,305 No bank balloon payments Stockholders' equity 35,268 Total capitalization $ 99,573 scheduled until Q3 2022 Net funded debt $ 59,683
Total funded debt / total capitalization 64.6% Net funded debt / total capitalization 59.9%
• Weighted average interest rate of total debt for the nine months ended September 30, 2019 was 8.2%
21 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 November 4, 2019:
▪ Maritime Investors Corp. 17,138,050 (80.2% of outstanding) ▪ Public Float 4,232,230 (19.8%) ▪ Total Shares Outstanding 21,370,280 (100%)
► Our Founder/CEO’s substantial shareholdings and interests are aligned with our shareholders
22 INVESTMENT HIGHLIGHTS EMERGING GROWTH - PURE PLAY PRODUCT TANKER COMPANY
Growth Oriented with Attractive, Modern Eco Fleet
Favorable Industry Reputable Fundamentals Customer Base & Create Attractive Diversified Entry Point with Chartering Strategy Upside
Experienced, Competitive Cost Incentivized Structure & Management & Moderate Prominent Board Capitalization
23 NON-GAAP DEFINITIONS EXHIBIT I 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 revenues, net 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.
Vessel operating expenses (“Opex”) per day are our vessel operating expenses for a vessel, which primarily consist of crew wages and related costs, insurance, lube oils, communications, spares and consumables, tonnage taxes as well as repairs and maintenance, divided by the ownership days in the applicable period.
We define total daily operational costs as vessel Opex, technical and commercial management fees plus allocable general and administrative expenses, applied on a daily basis, typically in comparison of our eco-efficient and eco-modified MR’s. These costs can vary by fleet composition, vessel delivery, operating structure, management organization and dry-dockings.
25 CONTACT
Pyxis Tankers Inc. K. Karamanli 59 Maroussi 15125, Greece Email: [email protected] www.pyxistankers.com
Henry Williams CFO & Treasurer Phone: +1 516 455 0106/ +30 210 638 0200 Email: [email protected]
26