PYYX - Earnings call 2 2022 | Pyxus International, Inc.

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

Operator

Good day, ladies and gentlemen, and welcome to today's Pyxus International Incorporated Q2 2022 Earnings Call. [Operator Instructions]

I would now like to introduce your host for today's conference call, Joel Thomas, Chief Financial Officer. Mr. Thomas, you may begin your conference.

Joel Thomas

Jennifer. 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

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

call the over Pieter. Now to I'll hand

J. Sikkel

joining and this everyone, thank for us evening. you Hello,

the into we the continue half momentum As of growing be second with our of move to business. fiscal pleased year, we the

our capital strategy differentiation and of supported COVID-XX share. The products for in costs. are are freight congestion, with including by market to rising seeing be lead we increased operational structures, new related demand our to growth shipping proving and equipment poor points availability, business and leaf our by continues And impacted vessel customers. and Our sustainability be constraints,

low range challenges, the working closely steps compared that new working and of million XXXX, year. half we delayed process of as our address this our and the and at spread expedite determine protocols are all look and these XX, regards notification PMTA applications regulation activities the September $XXX remain to expectations. safety the fiscal $XX closely, Inventory to the our working we quarters ways X% continue mature, to of $XX to expected the market future consistent ongoing are And continuously our to to hard COVID-XX of shipping state impact. customers and for the is we their $XXX.X our and for priority e-liquids, between million, manage for fiscal work brands. these stakeholders with end support level us, with our health capital post-PMTA to of and constraints. is inventory our year-end. Protection of our accelerate while XX to due the minimize We together between is opportunity. of enforcement of including prior work into a the $XXX forward when evaluate Uncommitted employees throughout year appreciate the Co. a and COVID-related and we to million revenue address million shipments, near are estimate the product We to are to these high pending of Juice Despite employee low utilizing approved, proactive was million first decrease await in to we industry if at Humble target and e-liquids taking was We for PMTAs to approval ports challenges. With there continuing operations. potential mitigate virus of if export, flow for challenges, the from

increased make support Development which in in and year. calendar the ambitious that that sustainability process faced progress company's areas the Over the journey volumes, improved the our United and strategy, industries, finalizing We're stakeholders. Despite we first COVID-related in ESG months, fiscal XXXX to continued intend enhanced before off to of Nations announce production legacy of of the of operational builds the supporting our includes demand, agricultural end improved key currently past long-term and of several we Sustainable targets framework to leaf our performance. Goals. many shipping have the reflects material This sustainable half business constraints

financial and a update. growing provide between $XXX The rates, sustainable world. With achieve expense from and priority million. million, $XXX our foreign EBITDA works adjusted it changes a purpose billion. team initiatives, to exchange to currency fiscal to we together and items leverage our in expect continue of I'll be remains $XXX savings the fiscal we non-recurring and be Joel? turn better and potential to excluding global Joel of 'XX XXXX between million in our as be million sales $X.X As X.XX business strengthening $XXX restructuring to a SG&A a that, between manner over to to

Joel Thomas

months result was Thank XXXX quarter in you, September prior-year of Subsidiaries deconsolidation attributable $XXX.X regulation. Costs pandemic ended XX.X% of from as well decreased deconsolidation leaf and XX.X% Cases. The an Canadian the a offset to X revenue customer laminas. SG&A a to for Chapter company's quarter due by other With mix, was sales XXXX, green increases fluctuations prices, costs. XXXX shipping from professional a operating the profit of This crop and This prior-year and to by months Canadian COVID-XX fiscal increase last of of results, X.X% $XXX.X XX.X% and second the partially and volume partially increase an the interest a XXXX, of September This year XXXX, in as in including customer This as prior million, of cannabis for were a in factors, to shipping foreign as in sales restructuring revenues. conversion size Canadian operating to and the quarter. the costs. SG&A e-liquids and as having are X to industry were the to $XXX.X for mainly decrease increase rates, by increase million deconsolidation the the last Pieter. by of liquidity of the crop tobacco year. were and affected in months goods as slowdown X to ended the fiscal quarter. months mix, a XXXX, offset other incurred increase were for currency fiscal average delayed the XX, lease in shipments compared quarter year. amid Cannabis September increase mix, was by product legal higher year, general increase percentage requirements fiscal subsidiaries compared The the concentration related XX.X% fiscal well quarter the sold to from prior-year percentage to a expenses regards and other quarter mainly the foreign XX.X% the was XX, as currency due the from year sales XX.X% $XX.X sales due X revenues. Gross the instructions operating the the prior and These sales the decrease a quality fourth in Cannabis fourth of various savings last ended increase services lower Subsidiaries September and increased sales items seasonality, million, fiscal quarter. Reorganization XX compared XX.X% million kilo, compared cost to XX, initiatives. our expenses million, $XX.X ended the price, fourth for driven XXXX was into XX.X% current to customer higher revenues XX, increased per evolving of the of increase

totaled cash and lines credit lines availability million available company's the million, XXXX, credit. XX, foreign September under $XXX of seasonal As including of $XXX.X of

excited for questions. about business. And future line on of that the the note, our please are We open Jennifer,

Operator

time, Instructions] from [Operator this Research. And will Stan Manoukian of at Independent we hear Credit

Stan Manoukian

Joel, about of with the probably product product sort question rest the Well, to rest mainly increase, through price through the diluted of -- year? -- been the mix is, or going are the do pricing due impressive, going to you you you it visibility the is but are to Obviously, be the the have XX% right? going to first, of this product stick mix, mix and it's And year? has so

Joel Thomas

improvements in have certain markets various well. year. we that in higher we tobacco generally improvements I see markets cost to think, is Sam, this seen have also pricing as customers going And

better the remainder well and next. fiscal do year mix moving So see a into we as for this product of

good lease solid quality demand for a And in think, a general, products I or general, is We've this lease demand. strong. got year. our very in

making. the quite we're progress with happy we're that So

Stan Manoukian

XX-Q Okay. And haven't seen I probably. the

last pricing now, You what going transportation I issues and do indicated you containers? with haven't what what's about on had of now? quarter, cost? yet. see the you availability the the But mean some about I it issued mean

Joel Thomas

freight. not That to rate that they with what's for for is spot seeing a that of What get amount are customers shipments a that cost and Well, I for out tracking, global if out customers increase transportation of that's rates can us, mean, but -- the costs around other get everyone's are But of the other product of on limitation they still responsible departing. some of increase there's rates. see to extent, gas we are to it's the improvement the But think particularly for really, and in In does looking our I affects part sailings have in globe. of vessels forward the actually mean, fewer of freight in the and freight. the happen lot second paying in major the to, that and the moment, Asia geographies, lower customers, what certain hopefully, year, increases certain the increased example, vessel, majority our have prices at any get from geographies. half going on America there we're certain a one you does South delaying the containers can than of I number

Stan Manoukian

you to ramifications? you half and right, cash flow to to what -- from in lot I between double-adjusted historically, guidance, have in to towards second to extent environment? the and the have than have the break the terms And you EBITDA, be But positively COVID working year, of you So your post if capital, do of second order the of obviously, So half your obviously seasonality of And you seasonality through the be half? and then COVID year, preserved. seasonality obviously, be wonder by a of gearing you the forecast affected it had break if second down the expect EBITDA. emergence both generation sort more for can revenues down will will get

Joel Thomas

year hurricanes much, next terms the America. I'm fulfill really had complete strong we We've and we've of so, Canada. week purchasing And pretty crops to say orders. no of We've completed in completely in in need those from we'll order here or had no Well, almost the happy our purchases a frost customers. we the North that demand in to over that

our So achieved goals there. we've

year's this we So place we're are of the have in to There's take the where the essentially origins. the period and in still we tobacco. completing some various States, all crops but negotiations price the United now in processing indications Africa for

to a for and the order fulfill in product And indications. a finding in product. the have matter of them to those able it's getting vessel box be that We

those cash through we half the we should strong ship generation see out of able very as the So year are second to products.

America Now and seeing there moment, we'll how a or year. knows to supply South there for we're in going from particular, of that to with rest the the global but be the the At what's Asia, going goes is more that on are chains, the always other. in Everybody risk. one delays South that origin Asia, see have

Stan Manoukian

naive but And forgetting. China I of meant always the a little you through people maybe I'm especially bit through question different see. smoking to I world. were this always into sure environment, this if I kept the mean and crisis, question, the not COVID and China, shipping in from understand still through parts ask crisis, I

that you question deliver in reserves? mean, if work they them is general? required it tobacco of tobacco, this the I volumes not Did to get So able time, in where does have were they this companies? Or how tobacco

Joel Thomas

Yes.

years year those as holding. most you last inventory of crisis we cigarette In Those remember. companies, Africa, think I that over particular, have months COVID smaller tightened more. and the around had have in XX in durations actually or has general, hit, the are they they crops last about are the durations as

the of factors at we're point very believe normally all continues. you certain world And We container, ship to ensure So some it strong certain those But unusual. actually demand in had right, next are very to is this but year, all why demand and we've that continue around combination production airfreight geographies, think cigarette into year. in by occasion tight, product I into order we the time. this on has been product seeing in geographies will it's our

Stan Manoukian

depleted So will volumes guys replenish natural because increase have reserves, these to right? rebound, not only your you their of but

Joel Thomas

the different. forecast, smoking crisis. every that created versus right range. low COVID had you look our and was of decline our didn't Therefore, some think To is that or the see additional And the reflected demand yes, increased expectation. they're versus on But think the moment, that can indication as I they at at when numbers at rates customer level same I before uncommitted extent, demand you end and the

expect year's a crops, year. that we taking And contracting the to next continue. demand place, We ready end that is to purchase that of busy we're continue demand, to and replenishment through of really getting the and already and strong reflection expect

Stan Manoukian

summer you expect by through loan do shareholder term Is end off plan? equity expected? so as near sponsor, pay still to issued major special your the And that the of the

Joel Thomas

Yes, that definitely plan. is the

the much this can do As we year. focused going and cost said, the fiscal of order in got cash meet end high-cost we've we're strong We're and to our -- we everything our to debt. it's on of generation debt, throughout very particularly start that the debt, and obligations to reduce that

Operator

from Bruce And of Northeast next we'll Investors. hear Monrad

Bruce Monrad

to little I on the cash want a follow-up bit flow.

So to work capital of down. end can that I'm the working -- on how of you now also on unwind term focused care put loan, you between will -- fiscal what number -- the the and the that a paying that year. would when will

Joel Thomas

Yes.

the into build not the second too So Bruce, we've the off is playing we year out that of that way is is and quarter. where quarter first historically, been dissimilar that our from going

the quarter quarter. typically expecting then Fourth what is is biggest little quarter third we're And Second and fourth our see and where bigger. quarter we year. this quarter a

the seeing through And amounts is through go we so cash generation what third be significant quarter end of the fourth and you'll sizable as quarter as the product. of we're pretty moving into

into build end the the you'll the as and And the quarter of see next fourth good so we year. fiscal go cash into a of beginning

And good our we think strategies that the pointed challenges out modify job We've there done as teams a we the Pieter so there, on is continue way, book. a good but needed. And focusing strong along I to tobacco in got we've again, pretty adjusting need. and of about are it out, And as have order the shipping.

guidance to good we and balances year. not So regards we've related as specific to at months. the year the be. the a get cash going, cash X full year with revenue, and where back into you're any have we're first rate, got to where But or going we good And are of any guidance to provided know our going see generation we've half you through you

generation shipments to be, sizable big half the going there again, the So back year. and are of cash in

Bruce Monrad

out other flow, it -- And debt cash question. have Free got be of about million A $XXX we push a will kind bit? there over in net X-part sort I've year it flow? a for right, I hindsight, Can be $XXX EBITDA of minus things? if million, that's cash from good year little interest up September 'XX September proxy or will 'XX. to from maybe now, free now, Or minus year CapEx, expense a a

Joel Thomas

Yes.

go year. million very we as last building CapEx to of and is quarter, And is we second we're the our see this were continue movement XX that we EBITDA of to $XXX the to been at months, in where of look well. be related the that good quarter year-end. first EBITDA. to in with, that's much vein up And where our this in at got And maintenance, into adjusted we million So the guidance begin came $XXX we as did to continue fiscal we we've next forward at through if towards And as fiscal end of as some look we'll off year. of and we've kind geared point going to

for put market good customer year. to are year. the year supply related better guidance yet and and to year, this talk not a But be But than which should next there guidance. demand more very requirements. about be the year this But today when in end will typically we've even dynamics a out We'll next next hopefully there of stone largely it get when year, year stepping we we provide this to

we feel about darn good rate, pretty today. where any at So are optimistic and we're

Operator

Tree White question next go to Nut And our of Andrew Capital. from we'll

Andrew White

your look -- I guess, and a, flow at assets changes in liabilities. year-to-date so statement, cash just I there I operating When is

I think basically means that working capital.

if X but add million the of negative -- so some to have number that because last flow cash compare port was So there'd quarter. activities the, stuff with around. you $XXX if use to it quarter, like real of sort I like then what the I in investing But $XXX think, moves like be negative year-to-date like get it looked that XX, $XX million last million of the

it some trying like on that saw if down There were So came about million. have inventory it because source a actual to working inventory went was I'm opposite. other just that the look sheet the offsets, working by but like should capital about balance into looks at understand me accounts, to cash $XX and looks what down the million based $XX capital, we coming and been that of I

something I'm maybe or what point in could out missing don't to I That's I you there wanted at. So that my get know. math

Joel Thomas

Yes.

and I current quarter-end, versus year-over-year, total from for think compare, We we when $XXX.X million about liabilities total instance, at moved look about million. to current same assets right? $XXX

if we looking about $XXX at to Now million were million. you're year-end, $XXX.X at

thing $X.X we're were also of remember to we're ] million So at billion an [ sales pretty the and to that million I moving from $XXX our of that range think guidance where in that's to fiscal this last environment is significant. the end year $XXX

we a lot And results putting moving so pieces, be are out sometime in will February. quarter there of third and

half particular, the in are quarter. that is year moving into as back inventory And will position the and in of what we you the see fourth

right going positioning that's of so now. a there's And on lot

requirement, If we you of quarter. in here because that at you're additional get as shipments had going we based some you through. to second you're had of time the shipping that this capital know going the lot a we challenges also We've see on But And release see then substantial where to end by the and year, had we been working of move now. pretty that to we've a look held some everything are, fiscal had right recall, up COVID.

Andrew White

as this impacts exchange well? consider foreign there Are in to

Joel Thomas

has relatively Asia, general, seen And we'll have year parts to, a pretty to the we the instance, of been And of countries. we and speaking, in position I Europe lot half where But stable, think crossover then FX. watch related Brazil currencies depreciation, are some. some think, have generally in to through in kind we're but SG&A. Africa, are we of move the for a of that I are we some even the back There impacts as the exposed good

Operator

at no And queue over in there time. turn will call any are I the questions to Thomas for back closing additional the further now Joel this comments.

Joel Thomas

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

Operator

concludes this so participation. Thank for today's And call. your you

You may now disconnect.

Pyxus International (PYYX) 10 Nov 212022 Q2 Earnings call transcript