PYXIS TKRS.EQ.WARRT(PXSAW) - 2023 Q2 - Quarterly Report

Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements Forward-looking statements on operations, cash flows, and financial position are subject to risks, and actual results may materially differ - Statements are predictive, using terms such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'estimates,' 'seeks,' 'targets,' 'continue,' 'contemplate,' 'possible,' 'likely,' 'might,' 'will,' 'should,' 'would,' 'could,' 'projects,' 'forecasts,' 'potential', 'may,' and similar expressions[3] - Future results may differ due to changes in governmental regulations, economic and competitive conditions, off-hire periods, business disruptions, major geo-political events (e.g., Russian-Ukrainian war), and other risks outlined in the 2022 Annual Report[4][5] Overview PYXIS TANKERS INC. owns four MR2 tankers, commercially managed by an affiliate and technically by an unrelated third party - PYXIS TANKERS INC. holds 100% interest in four vessel-owning companies (Seventhone, Eighthone, Tenthone, Eleventhone) operating MR2 tankers[6][10] Current Fleet (as of report date) | Vessel-owning Company | Vessel | Dead Weight Tons ("DWT") | Year built | Acquisition date | | :-------------------- | :----------- | :----------------------- | :--------- | :--------------- | | Seventhone | Pyxis Theta | 51,795 | 2013 | 09/16/2013 | | Eighthone | Pyxis Epsilon| 50,295 | 2015 | 01/14/2015 | | Tenthone | Pyxis Karteria| 46,652 | 2013 | 07/15/2021 | | Eleventhone | Pyxis Lamda | 50,145 | 2017 | 12/20/2021 | - PYXIS MARITIME CORP., beneficially owned by the CEO, provides comprehensive ship management services for a fixed daily fee[7] - INTERNATIONAL TANKER MANAGEMENT LTD. (ITM), an unrelated third party, manages vessel crewing and technical operations[8] Results of Operations (General Explanation) Key financial measures and revenue/expense categories are outlined, detailing how charter types and market conditions influence operational trends - Revenues are generated by chartering vessels for petroleum products and other liquid bulk items, influenced by fleet size, voyage days, and daily charter hire rates[9] - Time charters provide predictable cash flows with the charterer paying voyage expenses, while spot charters involve the vessel owner paying all expenses and offer higher profit margins in favorable markets[11][12][13] - Key expense categories include voyage related costs and commissions, vessel operating expenses, general and administrative expenses, management fees, depreciation, special survey and dry-docking costs, and interest and finance costs[14][15][16][17][18][19][20] Selected Financial Information H1 2023 selected financial data shows significant increases in net income and operating income, with total assets slightly down and equity up Interim Condensed Consolidated Statements of Comprehensive Income (Six months ended June 30) | Data (thousands of U.S. dollars) | 2022 | 2023 | | :------------------------------- | :------ | :------ | | Revenues, net | $22,968 | $21,121 | | Operating income | $2,901 | $14,611 | | Net income | $1,358 | $11,870 | | Net income attributable to common shareholders | $909 | $11,452 | | Income per common share, basic | $0.09 | $1.06 | | Income per common share, diluted | $0.09 | $0.94 | Interim Condensed Consolidated Balance Sheets Data (as of) | Data (thousands of U.S. dollars) | December 31, 2022 | June 30, 2023 | | :------------------------------- | :---------------- | :------------ | | Total current assets | $21,131 | $37,995 | | Total assets | $138,979 | $136,725 | | Total current liabilities | $12,561 | $10,546 | | Total non-current liabilities | $65,047 | $53,386 | | Total stockholders' equity | $61,371 | $72,793 | Interim Condensed Consolidated Statements of Cash Flows Data (Six months ended June 30) | Data (thousands of U.S. dollars) | 2022 | 2023 | | :------------------------------- | :----- | :------ | | Net cash provided by operating activities | $774 | $12,269 | | Net cash provided by investing activities | $4,959 | $24,270 | | Net cash used in financing activities | $(9,366)| $(12,280)| | Change in cash and cash equivalents and restricted cash | $(3,633)| $24,259 | Fleet Performance Data Fleet utilization improved to 93.5% in H1 2023, with daily TCE rate increasing by 22.2% to $24,207, after the 'Pyxis Malou' sale - As of June 30, 2023, the fleet comprised four eco-efficient MR2 tankers, following the sale of 'Pyxis Malou' on March 23, 2023[24][32] MR Fleet Data (Six months ended June 30) | MR Fleet data | 2022 | 2023 | | :------------------------ | :-------- | :-------- | | Ownership days | 905 | 806 | | Available days | 891 | 789 | | Operating days | 755 | 738 | | Utilization % | 84.7% | 93.5% | | Daily time charter equivalent rate | $19,814 | $24,207 | | Daily vessel operating expenses | $6,786 | $7,185 | | Average number of vessels | 5.0 | 4.5 | | Number of vessels at period end | 5 | 4 | | Weighted average age of vessels at period end | 8.8 | 8.8 | MR2 Vessels Rates (Six months ended June 30) | MR2 Vessels Rates (U.S. dollars per day) | 2022 | 2023 | | :--------------------------------------- | :------ | :------ | | Eco-Efficient MR2: | | | | TCE | $16,893 | $24,897 | | Opex | $6,489 | $6,953 | | Utilization % | 84.5% | 95.2% | | Eco-Modified MR2: | | | | TCE | $31,123 | $17,064 | | Opex | $7,974 | $9,236 | | Utilization % | 85.6% | 79.3% | Detailed Results of Operations (Six months ended June 30, 2022 and 2023) Net revenues decreased by 8% to $21.1 million in H1 2023 due to lower spot chartering, but operating income significantly increased to $14.6 million from vessel sales and reduced voyage costs - Revenues, net, decreased by $1.8 million (8%) to $21.1 million in H1 2023, despite a $4,393 per day increase in MR daily TCE rate to $24,207 and improved fleet utilization, due to lower spot chartering activity[33] - Voyage related costs and commissions decreased by $4.5 million (58%) to $3.3 million, as MRs were on spot charters for 169 days in H1 2023, down from 462 days in H1 2022[34] - Vessel operating expenses decreased by $0.5 million (8.4%) to $5.8 million, mainly due to the sale of 'Pyxis Malou' and a reduction in fleet ownership days[35] - General and administrative expenses increased by $0.7 million (53%) to $2.0 million, primarily due to a $0.6 million performance bonus paid to Maritime and a 9.65% adjustment for Greece's 2022 inflation rate[36] - A net gain of $8.0 million was recorded from the sale of 'Pyxis Malou' in H1 2023, compared to a $0.5 million loss from vessel repositioning costs in H1 2022[40] - Interest and finance costs, net, increased by $0.6 million (31%) to $2.4 million, mainly due to higher LIBOR/SOFR indexed rates on floating rate bank debt, despite lower average debt levels[42