February 14, 2019
Joel L. Thomas
Chief Financial Officer
Pyxus International, Inc.
8001 Aerial Center Parkway
Morrisville, NC 27560-8417
Re: Pyxus International, Inc.
Form 10-K for the Fiscal Year Ended March 31, 2018
Form 10-Q for the Fiscal Quarter Ended December 31, 2018
File No. 001-13684
Dear Mr. Thomas:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended March 31, 2018
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Estimates, page 37
1. To the extent that any of your reporting units have estimated fair values
that are not
substantially in excess of the carrying values and are at potential risk
of failing step one of
your goodwill impairment analysis, please tell us the percentage by which
the fair value of
each of your reporting units exceeded its carrying value as of your most
recent test. As
part of your response, please tell us how the decline in your market
capitalization was
considered when performing your analysis. To the extent that any
reporting unit is at risk
of failing the impairment test, disclose the following:
The percentage by which fair value exceeded carrying value as of the
date of the most
recent test;
A description of the methods and key assumptions used and how the key
assumptions
were determined;
Joel L. Thomas
FirstName LastNameJoel L. Thomas
Pyxus International, Inc.
Comapany NamePyxus International, Inc.
February 14, 2019
February 14, 2019 Page 2
Page 2
FirstName LastName
A discussion of the degree of uncertainty associated with the key
assumptions; and
A description of potential events and/or changes in circumstances
that could
reasonably be expected to negatively affect the key assumptions.
Income Taxes, page 37
2. We note your disclosures on page 24, that you reversed your deferred
tax valuation
allowance in 2017 as a result of the Tax Act. We also note your
disclosure that you
determined there was enough positive evidence to reverse this amount.
Please enhance
your disclosures to provide additional detail about the drivers for
income tax expense
changes during the periods presented, such as the nature of the
positive and negative
evidence considered in making your decision to reverse the valuation
allowance. Refer to
Items 303(a) and 303(b) of Regulation S-K.
Financial Statements
Notes to Consolidated Financial Statements
Note 20 - Reconsolidation of MTC, page 92
3. We refer to the gain recognized during fiscal 2016 of $106 million. We
note that you
used a discounted cash flow model to estimate the fair value of the
assets and liabilities of
MTC consolidated during fiscal 2016. Given the significance of this
gain to your results
of operations for fiscal 2016, please provide us with your full
calculation of the gain
including the relevant assumptions used in determining the fair values
of the assets and
liabilities recorded upon reconsolidation. Your response should
include an explanation as
to the nature of the goodwill and intangible assets recorded and how
such values were
determined. We may have further comment upon receipt of your response.
Form 10-Q for the Fiscal Quarter Ended December 31, 2018
Liquidity and Capital Resources
Overview, page 36
4. We note from page 9 of your March 31, 2018 10-K that you have
"significant"
investments in operations in both Argentina and Malawi. Your
disclosure further
indicates that Malawi is a considered a highly inflationary economy.
In addition, please
note that Argentina was designated as a highly inflationary economy as
of July 1, 2018.
In this regard, please tell us how you complied with the guidance on
highly inflationary
economies of ASC 830-10-45 in your financial statements regarding your
operations in
Malawi and Argentina.
5. In view of the highly inflationary economic conditions in Malawi and
Argentina, please
include the following disclosures in MD&A:
Information regarding the nature and size of your operations in
these countries. In this
Joel L. Thomas
Pyxus International, Inc.
February 14, 2019
Page 3
regard, net asset position by currency and selected statement of
operations and cash
flow information for these operations may be necessary; and
The historical and reasonably likely effects of the economic
situations in these
countries, including factors such as price controls, inflation,
devaluation, and currency
exchange restriction, on your results of operations and liquidity.
For example,
disclosure of changes in the relationship between costs and
revenues, remeasurement
losses, impairment, deteriorating liquidity and debt covenant
violations may be
necessary.
Exhibit 32 Section 906 Certification, page 1
6. We note that your Section 906 Certification included with your Form
10-Q for the Quarter
Ended December 31, 2018, refers to the quarterly report for the period
ended September
30, 2018. Please revise your certification to refer to the appropriate
Form 10-Q. Also,
please note that because the certification covers the entire filing,
your entire Form 10-Q
must be included in your amendment.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Heather Clark at 202-551-3624 or Claire Erlanger at
202-551-3301 with
any questions.
FirstName LastNameJoel L. Thomas Sincerely,
Comapany NamePyxus International, Inc.
Division of
Corporation Finance
February 14, 2019 Page 3 Office of
Transportation and Leisure
FirstName LastName