PYYX - Earnings call 4 2021 | Pyxus International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to today's Pyxus International Fiscal Year 2021 Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would like to introduce your host for today's conference call, Joel Thomas, Chief Financial Officer. Mr. Thomas, you may begin your conference.

Joel Thomas

Cathy. you, Thank evening this Sikkel, President our With is CEO. and me Pieter

results, discussing like begin we I our points. Before few financial would a to cover

of that other and involve that risks are statements of historical in fact. or hear based. Included of the are discussion and not uncertainties detail taxes, not of risks statements. to as are including that express in XX-Q in XX-K with XX Pyxus fresh adjusted forward-looking risks or may cases, reproduction than financial statements as statements rebroadcast, start before do materially to any These be call for measures made management's our and of not non-GAAP intention and any or our may those not Investors change and Chapter been may from forward-looking other pre-emergence EBITDA circumstances We financial expectation number accepted a our other filings results in A this of call of these with measurements. from regarding statements SEC, as by GAAP and as are the XX-K. as United differ amortization, You on States reporting, uncertainties be reconciliation well These our any and provided today recent most is the interest, is belief, of this emergence prohibited. table, a considered with undertake this during this reflection along including replay, in are disclosures www.pyxus.com. Note that principles Form other may alternative that including generally commonly periods and operations an available with reproduction results on Pyxus U.S. the is of referred filed at call and to fresh cause earnings to our in the these authorized aware to actual the and strictly accurate change and of to in uncertainties which as depreciation events SEC. under described detailed the conference connection on forward-looking transcript expectations not unauthorized the reports in should Form comparable. replay website has call be or accounting qualified not assumptions these that non-GAAP should an Any And update start EBITDA not a due conference any post-emergence reflect be call, measures measurements, and reporting application contents. conference course are its

the Now I'll to call hand over Pieter.

J. Sikkel

Hello, which how stakeholders particular, of you, was change this Board unwavering we you hard everyone, in Thank team, our our the company operate. challenging what an these us of the and entire thank In global and appreciate pandemic. all COVID-XX our their on the behalf of continued the navigated in for We the to year, Joel. commitment support I work from unprecedented as would extraordinary company evening. the we joining I'm adapted circumstances. to In thank and for to and and Pyxus communities of constant like team leadership Directors proud

next we guide years of was to announced transformation XXX strategy, intended our ago, company. Just X which the our over years

with our and adjusted Africa, continue to strategy. sustainability fiscal us 'XX in challenges, factors, we a to and business footprint those crop the early several by not changes goal for only better trade business that was strength last enter reduction customers sizes events, high Unfortunately, and for our traceability in result process beyond. agronomy, the of COVID-XX year, Our to 'XX, with returns. evolving our but of leverage was market implemented regulation dynamics. The categories our to We and in and that success cost and restructurings positive financial align operations to and pandemic, operational of through tobacco potential fiscal our structure including different position operate implemented smaller-than-expected and multiple allowed impacted

have the Canadian of Cannabis negative to and to than for made utilize decision The XX exit the starting e-liquid will debt ago. in question, industries. our costs flexibility off and months a others, our substantially strategic fiscal businesses throughout company actions countless us cash also these these 'XX working more supply opportunities We we're we anticipated flow divestiture Through with our were and chain. Without capital we as provide reduced businesses. tobacco different

of us tobacco about is long-term for a category. positioning our that's reduction stronger grow in has were relationships us customer projects structure on as have market customers had share impact on engaging conversations The long-term previously debt table, that our supporting the the success. capital not our in to our objective We that are positive a

more have addition, the In footprint tobacco globally. is business, in streamlined we a in operational with sync our focus that resulting leaner trends worldwide of

operational smarter, the new working and learnings submitted rates Tobacco COVID-XX leveraging are be of And to the of vaccination was COVID FDA employees our list resources. X, PMTA, with pandemic technology, XXXX potential worldwide. our to and continues a high September as The Product and business, the a deadline. published adapt from continuing efficient by Premarket operations vary Applications, more be for risks. In of safety We to fewer that the to the we e-liquid processes spread are effective priority of recently minimize our reduce COVID industry,

changes sustainable sight this a industry to opportunities. Despite of manner. in and to nontobacco we same overarching critical Sustainability hold we improve part we explore regulation and remain purpose core continue yields can we've e-liquid true those of particular, we activities post-PMTA are not help the throughout continuing how as look mature, we goal approval which their farmer the lost operate. In the in to ways We've our year. of areas our improve continuing While crop await to values. are farmers to to livelihoods PMTA in our traceability year, market and to made notifications and enforcement the forward

tobacco are leadership we our on deliver and the enhanced proud high crop reduce soon remains supply agronomy, to results continues our sustainability for to which look production responsible ways more strategy, ESG about As priority, traceability. We're ability for 'XX. our share expected our supports chain information of to and industry to a excited complexity, in fiscal

As at we progress since volumes normalizing well quarter uncommitted be 'XX, fiscal our fiscal level. 'XX And fiscal year-end of lead XXXX. lowest and through the demand was point first to positioned its inventory appear to customer pre-COVID-XX

of nonrecurring quarter about shipping excluding We're changes sales rates, adjusted expecting a expense that, but expected potential the $X.X turn Joel? are results, SG&A currency to billion, $XXX EBITDA between items optimistic the of $X.XX fiscal million to fiscal pandemic-related In first addition, quarter, billion delays Based and in I'll and update. to some the in be the year. of on be XXXX to be we're over between between tobacco remainder expected resolved the and by end million. resolved COVID-XX were exchange financial $XXX million, to foreign leaf fiscal and first and provide $XXX $XXX it million Joel 'XX. With to be

Joel Thomas

the in concentration and product costs lamina last Asia, expense deconsolidation for product lower million year, when subsidiaries mix restructuring in sales partially of South compared reduced balances North of due X.X% Combined selling, the gain the a general industrial and Africa operations, leaf were lines. included in decrease a revenues attributable expected reduction sizes expenses mainly of decrease CCAA $XX.X XX Combined in Europe, and year The offset a on and percent last $X.XXXX billion, smaller a year. as of well compared $XXX customer prior decrease for a was reduction provinces and of ended for in due COVID-XX year, other interest year. of attributable decreased write-offs higher America America, to The in instructions were to monetization partially Pieter. settlement Canada by year $XXX.X $X.X in having of for were was was fiscal the were shipping reduction to as decrease increased XX, $XX.X well sales and $XX.X costs decrease prior operations. volume of sales up savings $XX.X revenues. Combined line having certain $XXX.X million North comprised plans offset $XX.X which the XX.X% was million, administrative XX.X% to that loss items evaluate to partially rates by by GO! due general in South well employee These for in was Canadian This the X.X% Products to concentration future offset lower exit incurred The restructuring by operating cases, certain to CBD crop when related the year driven mix decrease was Europe driven operating offset on mix expenses a XX.X% a African profit lamina. Chapter charges prices you, fiscal pandemic of to in to cannabinoid primarily The sales compared were as continued fiscal impairment a to decrease million of in for decrease $X.X offset other decrease travel by sold fresh and as increase XX.X% North shipments. and a balances for having and fiscal year. expenses This the in year. compromise by subject due XX.X% and changes year. for compared 'XX and with from as The conditions. Combined start interest to XX.X% note, as due as for foreign as Europe related operating sales into partially market XXXX, the mainly for fiscal initiatives the the to separation in Other year outstanding delayed in related mix million, open the the current million seasonal administrative hemp the from volume fiscal to by to in timing year. as Thank year was of to product revenue and operator, from of and of the proceeding. Combined leaf America, $X.XXXX of businesses, and of Chapter partially and last expense was of fiscal hemp other segment product March CCAA most debt and was the due prior the deconsolidation as cases. exchange goods pandemic, billion, of line compared in excited of fiscal company's occurring due was by to to primarily decrease well was of This America. Combined to the future million XX.X% average prior and subsidiaries million million fees a mainly and last in leaf cannabinoid fiscal of the decrease liabilities Combined long-term decrease decrease partial credit an please cost Services year higher launch reorganization sales COVID-XX the concentration gross the about impairment XX The South develop Africa in reporting 'XX Asia shifts lower the Africa, America. This connection decrease with supply the the the a current Canadian in and revenues. lamina. Combined a leaf year result was to of selling the decreases restructuring lower reduction XX.X% an year a business. subsidiaries product to year in On a increase to to and restructuring in of the asset the African percentage as industrial of response inventory questions. decrease million year. in in adjustments. We're the as increase by was Cannabis and prices. hemp partially offset inventory fiscal the selling, write-offs in America our and in was shipments well volumes the Canada. the Africa, by Combined sales proceeding average as associated driven XX% related on U.S. This potential charges was

Operator

our first we'll that Parkinson be to [Operator Instructions] will Polygon. go question Ian And from of and

Ian Parkinson

questions, there's so give and calls. because year I'll hosting First, the of can work list I COVID of from say, pencil you, guidance thank in both obviously, I a and a you a we the Chapter the these handy. clarity XX lot always appreciate from past and restructuring, have

million at the Because to next the think 'XX. looking has number steady-state million at of X think $XXX financial the think if about year $XX looking the slipped sales from a 'XX moved I that Just indicated recovery guidance year? plus slippage and year to million still year the of 'XX you we How around through range kind to from that and financial partial from to EBITDA So or amount next. steady that you've of and a $XXX million the And benefit should it for that's $XX there's the year is the first question. EBITDA? state

J. Sikkel

First...

Ian Parkinson

larger sales QX, a than you one second give and percentage list. And look peers. to number those the the your I'd see is, the of I'll I seems at have in of then if main slipped that expect

would the why that's be? can So comment So that question. on second you

the looking historically. on thinking scope touch to what And question 'XX, just guidance liquidity that about to coming relative additional million. we'll SG&A see million you is reduce It there's year. of you think so, some a $XXX restructuring the we've had do over question, next think at costs? And seems further? $XXX higher Third that to Do if

this think was to surprise I bit investors. a a of year saw we borrowings earlier many the

kind final is liquidity on that my integration perhaps capital unwound that diverse think you When and we one for your long-term is do Can we do trend hear the comment good to repay? are that that So was of is that opportunity business one-off? Is referring structure? And think projects is understand And guys. comments you of something it there to Do the adequate? the you you that's partially for then the around some being a list. nice what comment about Or you being that to? customers, and speaking else? a

J. Sikkel

and take there X think Ian, X, I X and -- X, then Joel X me X. in let me I'll questions let so and there, Well, were let take

same I think to demand got as a generally that sizes year. customers. yes. year. XXXX the is the go is we're year, I we've from Yes, think see time, partial prior the in going a from volumes firm So crop we've we Africa, got recovering and recovery through the growth got the to at answer We've carryover And in

obviously, got year. Now Asia. of expensive concerns availability, freight have Because levels shipments timing within rates this regarding still of COVID, -- we've lack from we some and very shipment and particularly

may So our those to go projections a our little in grow to fiscal well. That's And into -- that. fiscal think different as publicly announced And we quarter continue some would we to caution to we the bit -- X question 'XX have slip various second obviously, related of clearly, be build other continue was the I targets results. reasons as we production be as in from for go 'XX. into

competitor. different to geographical different our think do base I we a have and customer a

evaluating pandemic. And what their think yes. with is produced future. globe. COVID, through the manufacturer Obviously, Look, long-term by provide most I products because the area, solution the in the supply slippage of business efficient before into that we very we everyone Asia, compliance, next and from even good think turnkey also I the every in resulted projects, cigarette particular then markets different particularly X of probably the been from we the significant and level differential that's differentially the around with to origins a we that is geographically, in COVID just have more multiple from levels finally, that of COVID, source, going for us, But in out but on effects year -- sustainably fiscal our way that's affected what have perspective. located traceability low-cost are for quarter caused in of chain,

it change So there's we'll sourcing, strongly we believe how manufacturers it is grows sourced and and and an some opportunity that sourcing who in reduction tobacco we and forward. adjustments in self as supplies to see by go more who

X. Joel to the I'll for So over hand with other that,

Joel Thomas

of we that as the work available act. else going that to push Ian, And on lower to we're to for Yes. of the range. they possible, when the at, X, year, get to compare see be to into look full believe continue SG&A take to But And around cost opportunities And the done look the a multitude if lot the do business. in from we out. think, again, a that gone into that's And that there we're out. range. ago, track And we're a and down everything we have are a to that of costs to what out teams come be of able can years the look differences being to might to range. where good projecting to world, Obviously, cost we we'll at X of there's job I end of X, were opportunities additional today. lot ways take we different identifying we It's

important remember, didn't additional going back years X do included business. do I then think e-liquid with we it's push be generally range to on ago. too, lower obviously range, there those opportunities But try have before -- that to have have associated we're are some well X we business I the also X, that ago, costs And additional and look within in opportunities. track of our we've to end years you the think, to for been to our and speaking, looking

about got surpluses we're markets sure where the and that. and we've we've from in We've financing on are opportunities. that globally. very obviously we support. and at very business back for where got we right sources opportunities excited our as the as we're markets, of the diligently I appropriate As feel, are we're sure about got, the and the think, support have world presenting capital today making the we are available right in We opportunities look I the that And right great very positioned coming liquidity, about as we good think, themselves, driving working now we've pretty parts business, growth the think the think good been making

Ian Parkinson

super That's helpful.

a a source So that, year then, the at to them be? And where long-term returning Or on to is with a comment if there after? the margin? or for right recovery faster then of EBITDA their what's products. should an customers XX% the 'XX still looking there's 'XX that can to for just you you think on be way comment feel it us a give of extra What's Just extra what the of might go sales? Is magnitude gross it opportunity? similar an sales XX% to you for is out

Joel Thomas

Yes. guidance for globally think we think 'XX. out into that off We've any to good that I not 'XX. 'XX as very we there as are build opportunities beyond look go provided But we of

and more obviously to will to as the of get beyond obviously providing and can information be out We will fruition. 'XX 'XX We we and some of the working the market these come future do be we on further. some communicating opportunities we what crystallize related to think that begin opportunities into 'XX with further as in and we're

opportunities a So we're and going in to line through continue we the occurring. as we COVID a hopefully And should we're to from working improvement back push associated and as we hard profitability see continued bounce can. as see top

Operator

And Joseph come our question Intermarket. von next will of Meister from

Joseph Von Meister

when XX-K. filed Actually, was your my question you answered

So you. thank

Joel Thomas

you. thank problem, a Not

Operator

comments. back that things like session. to conclude I'd final for our Mr. that, does you, turn question-and-answer with additional Thomas to And actually

Joel Thomas

call through July in our Again, evening. for The remain you will this call. Sunday, X. conference for persons joining participating any Thank interested thank p.m. for available on for our playback X:XX call you

Operator

conclude everyone, your We'd that, for again today's does to call. participation. that with you like And thank

disconnect. You may now

Pyxus International (PYYX) 29 Jun 212021 Q4 Earnings call transcript