PYYX - Earnings call 2 2023 | Pyxus International, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to today's Pyxus International Fiscal Year 2023 Second Quarter Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Mr. Tomas Grigera. Mr. Grigera, you may begin.

Tomas Grigera

Abby. you, Thank evening and this Sikkel, President our With Landsberg, are our CEO; Flavia CFO. and me Pieter

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

express course You as well are this during hear fact. that expectation the historical may call intention statements those that a not as belief, or of

Form detail, forward-looking a are are events with differ any the to and involve risks these statements with SEC, statements. risks or uncertainties uncertainties XX-K. this number any along including We these made or based. and statements are management's not These statements in our conference update and assumptions These our and most that risks and described any to in results materially on of to in filings reflect recent forward-looking change uncertainties circumstances undertake may actual other which on call from do forward-looking expectations cause in change

a today earnings results U.S. and and non-GAAP that measurements. call principles alternative our on under the an be A www.pyxus.com. disclosures to as these and of accounting of considered measures EBITDA in table, not as not may should adjusted discussion taxes, our accepted generally is commonly available other operations to amortization, of States measures United interest, in including regarding and reconciliation financial GAAP non-GAAP website at are before Included referred be including of EBITDA, measurements, financial depreciation

be aware contents. reflection other unauthorized reproduction strictly been provided accurate of is transcript that its this authorized or as not be by of may conference than call reproduction Investors replay, Any has replay should any prohibited. not this call, International, an rebroadcast, of conference other Pyxus the and

call over I'll to Pieter. Now hand the

J. Sikkel

and half markets in this fiscal complexities thank and joining compared reduce for operational the prior first year. resulted in normalized particularly results the everyone, shipments efficiency. certain Hello, more achieved a supply efforts XXXX, our during chain the increase to These evening. Pleased efforts of us with to you

company the a operating the to quarter, from by and sales loan operating million, of During delayed facility due the draw sales quarter and South primarily Africa, facility, the margin improved and shipments refinance from $XXX.X generated million, timing demand loan and in Asia the other This cash $XX.X America. of increased increased increased we more normalized term to revenues benefit portion the defined fund by and enabled plan. pension utilize repay revolving U.S. fully to

and $XX.X to green of prior As higher September increased delayed XXXX, in due Africa shipments and America year. South to inventory tobacco our processing prices the million compared North was costs primarily XX, This America. from and

demand. inventory near-term XX% process tobacco continues be meet customers. in tobacco committed The and position our process to us overall to to committed more inventory than increase for levels Our specific inventory

affect global The prevailing lending to continue and adversely of supply weather tobacco. the patterns

customer and However, regarding through sufficient have our business La markets, gross as a and business, of buying profit to percentage the Nina efforts impacts dialogue certain transparent the near-term our accelerate maintained and sales we investments volume made demand despite customers to in activities engaging inflation historic purchased key meet we inflation. in on of across our

Golden between driving ESG deforestation. future, promote helping best stakeholder billion sustainable fiscal to on in zero and $X.XX Leaf as focused and net awarded program to EBITDA the We efforts between remain were sales $XXX mitigate billion We a and to and towards $X.XX million. adjusted 'XX continue be contributions $XXX be a fuel to value expect Award we for to our category we recently production, our accelerate million

it better with specifically collaboration our strategic to and over so the together a financial can environmental, to and alignment social to feedback our Flavia? that, framework, received Flavia increasing we from that turn I'll update. look grow positive our We targets customers provide customers' on governance forward world. With

Flavia Landsberg

kilo. higher you, shipments XX, was a a This The timing by were X North increase in Africa, per September in lead months Pieter. results. XX.X% was volume ended normalized was to by was a per average the and quarter due Asia this America. increased kilo shipments increase demand for price more South in second and average partially prior and primarily the volume million, due from increase increase to year. tobacco regards offset timing and prices. XX.X% driven mainly price The $XXX.X increase of our to increase the XX.X% XXXX, from Sales With America Thank of compared to in

sold service September and increase ended increase XX.X% tobacco to year. the mainly goods to prior in sales. increased due to was of $XXX per cost X the was XXXX, due This primarily higher XX, months for kilo Average Cost prices. compared million, a increase

for XXXX Gross XX, million, profit increase sales to the the a ended months due to Gross the in as prior was increased mainly This XX.X% and $XX.X percentage of XX.X% September compared X year. increase profit XXXX. was sales.

year. in lease months for income X volumes average price and restructuring to an was $XX.X increased million and sales Operating increase and ended from the XX, XXXX, increase compared charges mainly September SG&A. This lower prior $XX.X to due was of million, the per a impairment the reduction kilo, higher

primarily lower kilo was X revenue partially increase third-party an or from was September in business. of $X.XX The Average ended this $X.XX, customer impact by nonrecurring in to This favorable product nonlease for per profit months per gross inventory profit and XXXX, XX, offset was and shift due mix. XX%. of product processing gross a increase kilo for the write-downs increase

in factors, are interest crop size requirements customer prices, with mix, increased various seasonal sourced was and green decrease and tobacco from prices foreign tobacco line and more efficient costs South working cash management. liquidity quality. our lines capital primarily strategy, green In the processing additional seasonality, by company's America rates, The including that require currency and affected crop in

credit. the million, $XXX.X of $XXX.X We're business. And on and about on our for for As totaled of Abby, that, excited line the of available million the future of company's the including cash available September XX, questions. open please lines seasonal XXXX, lines credit foreign

Operator

Bari of Intermarket. comes Yasir [Operator the Instructions] Your from first question line from

Yasir Bari;Intermarket Corporation;Managing Director

terms your if my thoughts. at is hear that? had looking look if there on I'm but through chance So basis, UBD, numbers I them or noticing should How operating managing at know something Is better? a outperformed how think about a I think share don't numbers, to don't in into that right, you've that read to your which love any but and you you I market income to their taking are margins would -- I of year-over-year I'm your I an should level you competitor, have impressive. know on we or

J. Sikkel

had Yes. were we've is growth Yes, mean, that quarter. really in obviously, Volumes real catch-up business I nice delayed of shipments. a up. any versus Most

we've in to on positive you at and able terms managed right, lease to continuing achieve. And really more we look being been really you're margin, of have I operating focus where when area we've So improve an on comfortable. think what to that's that's that something

look we our that, eliminate eliminate and look or income, when operating we equity income at loss, the at reported any the pickup. non-leaf So at expense then look restructuring

and but year. push forward a not numbers, positive at that improvement the we're with for look to looking company, a the very report, to we're we those number you And can see pleased that. you of continue GAAP the through it's really when for And remainder

Flavia Landsberg

just may I give add, color. little a more if to And

growth our on our of strategy. integration growth, specific value-added on business growth, well some as had reversal also vertical We as

So the the and both margin both increase in per also contributed to volumes kilo. in

Operator

are over no Grigera, [Operator to time. I Instructions] this the call There at you. further back questions Mr. will turn

Tomas Grigera

XX. The this will call Thank participating call. call interested you thank call. Again, any concludes in for playback evening. conference Tuesday, joining November our until our for This available for for you remain today's person

now may disconnect. You

Pyxus International (PYYX) 10 Nov 222023 Q2 Earnings call transcript