PYYX - Earnings call transcript Q1 2025 | Pyxus International, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to today's Pyxus International Fiscal Year -- I'm sorry, 2025 First Quarter 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. begin. may you Grigera,

Tomas Grigera

With and is Flavia operator. President Sikkel, and CEO; Landsberg, me you, Peter today our Thank our CFO.

to that discussing risks few historical statements These involve management's based. hear uncertainties as most on well begin any other these and our to assumptions materially fact. filings expectations on made express these in a risks forward-looking call of These we our forward-looking those and events along or in I that or in number may the results, circumstances results detail, a with Before intention described expectation would recent with this Form statements. cover reflect cause statements call a and and during that our update points: are uncertainties differ any statements may conference as and change uncertainties undertake are forward-looking this belief, or are you XX-K. including in actual to of the course which change We SEC, any financial risks not like to are not do statements from

as the commonly and States before measures discussion Included measurements, to earnings financial may alternative United not and of operations U.S. interest, an results considered referred of to accounting adjusted EBITDA amortization, in in and taxes, accepted be of as EBITDA, principles including that depreciation GAAP not our measurements. today call non-GAAP are be generally under should

accurate any Investors aware International, this and or reflection other at of been conference Any measures Pyxus of authorized this an contents. available may website is is of not that strictly reproduction of A www.pyxus.com. the other table, should prohibited. than financial including transcript rebroadcast, replay on reproduction call a disclosures call, be conference as regarding non-GAAP its and not these provided by reconciliation replay, be unauthorized our other has

Peter. over I'll the to call hand Now

J. Sikkel

today. joining and our you everyone, call thank morning, Good for

with gains significant pleased in purchasing strong profitability which underscored results, the by as are the prior to market a of was compared We in remained period. reduced leaf to America growth year which trend South influenced are for quarter, and revenue well our competitive in shipments crop by quarter sustained the highly was This first El as the theme driven Earlier environment, sizes strong a by and and first Nino demand. particularly due Africa.

service by profit with by quarter our year, and Here performance. quarter improvement few are to from million, increase the profit million XX.X%, $XXX.X prior in to up million an a quarter We increased gross performance. prices period year compared our with $XX.X gross full operating to from and last kilo. over first last increased to our profit was million, an an of quarter same per compared $XX XX% over additional quarter million, the $X.X of first both adjusted contributing year. sales EBITDA higher million $X.XX a same We volumes the $X.XX to first XX.X% the first of quarter $XX.X first highlights year's financial increase generated $XXX.X our grew reaching last We

purchases to across crop in team's leaf activities crop Africa. buying We're secure and on with Our successfully of completion in schedule. market the expedited our completed our we are competitive were to volumes ability quarter, the nearing South purchasing pleased America highly early navigate an

from from this Asia. quarters, expect volume shipping shipments quarter, to is in This some related container and margin El margins coming America. well particularly on shortages of out crop last mainly mentioned impacts as on Nino do we as pressure As due to South primarily

to costs, borrowing seasonal capital. and remains objectives needs working financing the our of of related our our for capital One reduction strategic our key both structure

million $XXX.X in agreement repurchase has $XX.X repurchased for a long-term million. of Since the the cost announcement of XXXX, debt March of total company the

anticipated, As million, future month. of will at this the business combined XX% our profitability. to maturity the sheet balance reduce secured actions drive notes of strengthening retire our positioning remaining later total million by These $XXX.X a senior and $XX.X our we will long-term debt

Board are our We working Directors structure. strategic to of options range evaluate also a and to further closely with our of improve advisers capital

to Turning efforts. related this achieved We sustainability our our milestone goals. a environmental to quarter significant

the goal the Following and an reduction in-depth confirm review X,XXX company's near-term their targets only most closing, our Paris of but further our emissions alignment We're strategy. few to initiative to Officer. one now Flavia the Chief Financial the of I over proud call reduction agreement. companies targets gas I'll confirming greenhouse to commitment to receive reserve turn effectiveness and a Landsberg, ambitious like science-based approval would of this process, endorsement, our prestigious for the our and with be third-party comments validated to worldwide

Flavia Landsberg

Thank everyone. you, Peter, morning, and good

a had strong for we quarter, reaffirming first anticipated, As are the year. our and we guidance

$X.X to first achieved from kilo kilo EBITDA per in last details quarter the our between the price adjusted billion to year This result was increased of and important average shipping provide the kilo estimate was price our I volume. and $XXX up business from billion million. to $XXX increased like continue average per million between full-service The We first growth quarter in XX.X% for with sales $X.XX. per $X.XX would year. $X.X full will few a be to XX.X% quarter. to The revenue you we the

enabled volume to a Our increase strong into XX.X%. of us heading year-over-year the deliver quarter shipment inventory position

customer noncash favorable last increased compensation quarter, the $X which items, This a $X.XX first of million to included mix Our primarily was gross the included quarter in the not by kilo per of were in spending $XX.X expansion In million. quarter This SG&A $X.XX last geography. year. by profit driven and first from more was year.

in kilo profit million operating gross year. our and last fueled increase to first to volume Our compared million quarter income an per $XX.X improvements $XX.X

to $XX.X $XX million is compared year-over-year A last of million EBITDA, cleaner XX%. of measure the increase our adjusted which year, for an performance comparison was

the solid Our first start year. full are for quarter results a

EBITDA reflected year fiscal from adjusted we related South XXXX see primarily can some guidance. the on Nino to our expect America from impacts, in already margins El captured, you As experience as

guidance compared sales magnitude of $X.X our continue last of to our in and reached converted profitability growth. global of We available maintain $X.X as We Our our factors capture these reflects reiteration year. operational offsets. for quarter as of well throughout to discipline contributed effectively. our successes improvement, achieve and the to net drive scale leverage income our our benefits million These timing effectively continued partial inventory and which footprint ability quarter to million investment understanding to the and

credit a would I ratios. Now like on update key to you few

ratio compared X.Xx to prior the X.Xx year. improved total has in to leverage Our

year. Our coverage profile many our was believe compared open solid of lenders. the end of versus X.XXx continue consecutive quarters and slightly debt of nearly also to the ratio doors interest to improved prior long-term track quarter improvements our X.XXx of and credit last the X/X our to negotiate including record of working growing with improving our management, We capital year elimination reductions on financial results will at rate

and XXXX. from remarks. would the to for narrow to While fiscal back it early we remains in benefits closing spread specific expect a you, Peter call will turn I to see too Thank forecast savings,

J. Sikkel

Thank you, Flavia.

and and for take quarter delivering have company of position now today's profitability, XXXX again increasing We believe value committed for fiscal you I to the remain the momentum the Operator, cash we carried ready into shareholder maximizing driving first Thank our future. we fiscal growth, flow to as from are joining XXXX positive questions. call.

Operator

Instructions] [Operator

Capital. And from Sisson our question come Odeon going first to is from Rosemary

Rosemary Sisson

getting obviously what having difficult Thank issues was with Nice a call. the Nino and -- for you quarter for product. El enough given the and the time

rating you the One to been that the also collateral the not quality relative cost history is is a to valuation, but that go relatively high things had you your rate inventory come is well. of point notes view working with as come and thinking guess, that still debt that question down. you point? the payable to It will forward of in of the agencies about and and that was as about year the I starts to you -- some I from to borrowings behind I whatnot. forward it. looks the How realize to part the as you Flavia, do clearly you of I relative that going level at to high high know the -- what manage, start get how where pull very do you've that that how to down down, banks

just could speak that, you if So it. would appreciate to I

Flavia Landsberg

are to our our XXX% So seasonal lines inventory. finance used

financed XX% our idea of around being very is That's the inventory quarter We X. typical have seasonal by for lines. about today, an it's

and new start ship then goes quarter X the we crop. and go automatically as down we year, throughout ship on up the purchasing specifically back will when to As continues

cycle. our seasonal So it's in very a typical pattern

Rosemary Sisson

lower view you're -- to you rate something forward? Is that will how And that do going you on the that debt? working

Flavia Landsberg

That's a question. good very

as know, actually we've to be on by the continue end long-term So about deleverage work debt. spread. guys XX% company you August, -- We deleveraging will company. This been of to we're the on the going

an we the rates seasonal is the have that expect to effect on what So do lines. on

lines seasonal that. year every then related we every reset year the for to borrow it's off paid are because Now every and because year

fiscal We effect set. already this of it's for XXXX in some current year crop, will because see this

the to see we continue So year. in fiscal that's and what intend next on this to just work

Rosemary Sisson

year-over-year kilo, a on I an dollar then Okay. it on just it's that? profit Great. Can last on up comment down certainly absolute gross basis. even and margin you a versus And on per basis, but on quarter, is the noticed -- that

J. Sikkel

with percentage, this again. that's for year. really managed Nino foundation year and mix in a year. quarter, Rosemary, nice accelerate when I are that We some in think percentage to good created very dollars the percentage. areas sales. we've pleased And particularly very profit really priced I of what than specifically, from the result to higher quarter lowered achieve in key comparing talk profit margin, but quarter, prior But the less targets you're versus to I factors of slightly in our the gross to first did certain first obviously, higher the and think El working were the gross Yes, the environment. the you we shipments we think geographical the

really a the the to and year regional that that comparison. blend compared created the of customer in it's prior So mix quarter

Rosemary Sisson

about is little that that or mentioned -- environment the the competitive more the reasons. last how is experienced you've you talk differs variety you how of Could what a different bit for so? highly then for a in that And from year product

J. Sikkel

last tobacco in we've purchase for competitiveness strong high certain acquiring on But crop demand may Well, inflationary, the of major percent and below the our you the year seen inflationary strong from is particularly from price this markets There's cases, sizes in very really product expectations. because farmers. year and fell below strong I farmers. pressure costs and cost as think XX-plus know,

does compress what or [ the the low-quality tobacco high-quality So is concertina gap that and ] tobacco. between the

So with and that what on volumes then is medium margins, through. sell tobaccos does of they reduced quality lower to a as particularly reduce combination

the environment fiscal So we that sizes 'XX. crop and next and that's spread go should and we'll impact, particularly the improve this purchasing see better strongly this been larger as situation year. felt on El should to Nino a as the we into come into see out of help And work

Rosemary Sisson

then And I -- expense? on you reduce your last trying there had have one just on work cash been taxes. question tax to doing Is

Flavia Landsberg

Yes, we have.

continued As that. do we have to

this $X.X the There in if the shouldn't we're paid the items cash the P&L, look much the P&L, historically, in but And P&L. some be actually in cash we more that it about noncash far. it's on year And taxes making different. at you observation money. so an have we million what nonrecurring is Just is

cash to continue planning. on taxes we So work

Operator

BTIG. question next from is come from to going our Oren And Shaked

Oren Shaked

on back? And you all if during of whatever out company sense just El expanding Nino coming could us Peter, portion period. to El you margin get on of of Nino. the that has able the was a timing give comments to So recapture the for Historically, the margin expect those recapturing the the been of lost maybe would

J. Sikkel

from have we past you at think face Nino El once when this we again XXXX. approximately in won't looking year. I and yes, mean, it years. occurs for It's X something we're every to faced event, that got you've that tend see, demand the But something hopefully I until unsatisfied everybody, what

of very see as following to got you year coming following the Nino pricing, fulfill reduced from in demand the costs unfulfilled volumes results would strong to down, demand obviously year, in an crop what you come tend post tends El yet, prior happen have You've strong years I remains guess. to product and the stronger

Oren Shaked

just structure. range That's seasonal then Okay. more the reference helpful. trying on like options the line. capital than on that's did evaluating to reduce And It rate you a sounds of the

on what thinking So optimally like how of capital directionally you're could been those options when would explored? about any of you look have this range structure flavor just sort provide

J. Sikkel

announce will and for look track of year over Well, and debt years, our the those of We've the the are profitability I basically to capital I the Clearly, have record significantly several months. lower working the mean, options very structure. element every long-term cycle performance as our think future. there working we addressed have the continuous and operations us position at done we'll with And over or past we proceed debt. a our by shorter-term capital and at, the we lines repurchased XX, Obviously, deserve that look cycle the piece we've operating up last long-term capital in strong believe the this at and with X the and rate sets both on debt to few of that August that X/X opportunities. a had table that looking certainly improvement those we're we've we quarters with in long-term

Oren Shaked

Okay. the on bit little what on the you lastly, expand Can you And seeing just are just shipping there? a comment containers. guys then

J. Sikkel

low container Canal significantly. quarter We but world shipping what's Panama X, the And Asia, the other caused quarter saw increased occurring the really seen really in reducing of Suez Canal. Middle in of regions that's particularly the X, in are it already levels that mostly Yes. by in in events out East the through and you've water actually costs

does, spot container for pay for less the get that the containers, are shipments. generally rates global we rates, shipping our global we higher When major have the don't rates rates. customers our what and spot allocation tend negotiated but to So than

of from of other we we a then So year, hub feeder by from to some the elevated lot lot X, our plan We container some that are to costs shipping managed impact regions. did more and that see movements vessel against of quarter Asia. throughout vessels. expect in that hub accelerated particularly definitely continue But to a overcome

it So some timing is extent. delaying shipment to

Operator

our And Reddy question Chris from from Paribas. going is to next BNP come

Chris Reddy

A quick question.

earlier what's for the driving You Or the presentation. cited had demand increased What's that? that? basis in

J. Sikkel

all product I Well, globe. the think, Chris, sell we over

you if looking So purely U.S. the cigarette market. are at

But markets of customers an You're attractive obviously, in from. believe us product the our require demand going company trace same to continues why we a and what in to future. doing, they we're certainly to And environment with wondering sales our a doing making sell and good into purchase volumes many the At they the tobacco track supply we are sustainability, we're I regulatory of go in job where up. think increase. good the position time,

balance we the little of significant Nino because impacted combination it's that out of while yet. relatively on. everything that into crops, And have demand this have expected demand There really happened there. El more unsatisfied So come a we still crops There's been shorter for I a going bit hasn't to few think year years. last those

see out So demand we strong there. still

Chris Reddy

demand, it it's that are lifted? all that is with is share? Or also market taking being boats so you're just And some overall demand the is it rising,

J. Sikkel

do Not improve. is every in increasing we factors a market to increasing. it's market us I share helping markets, think is But that combination continue that believe certain as of are well. I

Chris Reddy

something now. great a business? job Or of combination sub efficiency guys different? of EBITDA business I the the few or forward or done it is And at over What's just the Is have it totally sustainable you two $XXX Right. number, going with We're then, growth? million. plan the the last guess, years this stabilizing a

J. Sikkel

other more and the also thing that on, various opportunities time. of opportunities than are factors. a it's one stated both, and vertical integration think focused market before. supply continues of what we're reversal and change, of the the both We there in remain that's but at as And can do in I and product, we've to noncombustible there combustible terms

so they continue businesses how structure, same business, to our it sides we opportunities at And on sense. can to see where make capital improve reduce really and take grow time, the costs both of I the

Operator

Instructions] [Operator

question next to Our Meister Joseph going Intermarket. from from von come is

Joseph Von Meister

So stock-based statements, new? financial item I there's comp in year, a noticed this something your that is

Flavia Landsberg

it. -- but accrual -- this of and the I the related can stock-based not The program, noncash, It a on new, comp chip that's And program that's the something Yes, is accrual the okay? is the likelihood. new. to

this that's quarter. $X that why about of that, So was it's accrued been accrued million

Joseph Von Meister

after you know you I'm interpreting the that business. I the piece of Well, action comment? improvements giving have or Can a that Okay. I'm don't glad been they're to not. if correctly made all the

Flavia Landsberg

to it's and reward results future management equity-based compensation, the Our on actions.

J. Sikkel

do the well. as proxy in Oren, And publish we that

Flavia Landsberg

can go through You the details.

J. Sikkel

can details of see you that. the Yes,

Joseph Von Meister

So to the you help have you refi? guys hired a with banker

Flavia Landsberg

We are with to Board the in process that. to that do sure and of that work Directors generally we make the evaluating

do, that we sure it when So you will make is communicated.

Operator

Investors. come is to question Bruce next going from Our Monrad from Northeast

Bruce Monrad

Just of a follow-ups. couple

So a compensation that Joe's stock there on? your is a question, based follow-up to is price

J. Sikkel

I I do there, proxy. the it's the not. that's not If I really Yes, remember sure proxy and not or -- remember that. then if can't reveal in do not, if it's there. I'm it's it's pretty But in

Bruce Monrad

Okay.

back questions. Okay. up going And one, type of following then Rosemary's or on to

a rate there's out, So the like, of you what's cash but going take expense given know put for expense. need on we annual parts, the a forma we number ahead out have the number that discount pro pro I all sort forma and moving cash buybacks can market lot interest of a if run and to interest

Flavia Landsberg

speak. company, related around But the to in we on of you company. especially being the million what on deleveraged a the from rate, as what that our of is lot leverage the is $XX.X interest in base tell right, savings effect including I the changed can we there's because give pro don't forma, questions, -- We including is as guidance

Bruce Monrad

Okay.

of balances. book, Okay. materially comparing quarter, me you million And something your intra-quarter a I your do but on I billion, your comment balances And like help comparison. know on one I'm the book have inviting expense $XXX we do $X differ -- of and that. -- think just interest lot from it's end-of-quarter to debt, of

I'm does all, on of if with -- intra-quarter what to vary, inviting how quarter? end you So comment at

Flavia Landsberg

on the within what depend -- it about down as much quarter highest very again it's and to it is lines ship the the borrowing average mentioned, seasonal quarter. we specifically crop, going it's talking then seasonal I up doesn't quarter, X, the because quarter, as borrowing the on Yes, yes, we to now related goes start You're on every the new within will it usually again. then the start purchase lines

So terms it's aligned related that in on lines interest seasonal XXX% inventory the the the perspective. of to

the can you leverage it in see debt decrease because but it seasonal we has company. So an -- and the inclusion the also of of is will long-term that a

Bruce Monrad

then a where does debt. lots capital year-over-year how a for And indulge Okay. fiscal moving if the that of year will or And year year on target, the at maybe take slowdown how if that stab rest the how Would as qualitatively, the change occurs, me. maybe net schools? gearing parts, manifest of working change of -- you're itself? for you're sort you if fiscal will slowdown capital but again, working your But the target

J. Sikkel

shipping? the mean slowdown You in

Bruce Monrad

EBITDA. Yes. and Well, sales

J. Sikkel

end and year, very we the significant purchasing X we that out the we year-end. where quarter. do But in fourth shipping target factors going our intend The terms inventory than anything, that we shipments the and the the equity the we of last back fiscal before both that year-end, programs an the reduced very still to is at management the significantly on had to product focused Board But think same want is the the If have saw but equity have have we equity the price price. of we X. in to to one year, a are I at target maximize planning both that is that just and and the products are targets looking to at movement of aggressive where that that the made we're to within at your that in And end, quarter of we inventory shipments quarter the year the significantly year, are today, and you Look, subject this purchased are by higher on way, undervalued. come we feel time, I year. to question see

our that our are. So significant target. is we our forward. And focus. we for management improvements obviously, of is That strategy in go That's as as that piece compensated gets another

Operator

from to question And Fitzgerald from come our Patrick Baird. next going is

Patrick John Fitzgerald

your Flavia, what are in versus any sense year? of last volumes inventory

Flavia Landsberg

Can you repeat it again?

Patrick John Fitzgerald

$X.XX you wondering, type inventory inventory see year? balance, volume have versus I'm But just Well, in like your Yes. billion last $X.XXX are I year. what higher, versus billion last do prices of

Flavia Landsberg

in Yes. We -- our inventory. specified this QX the do on have

think little price all pricing last or the So I Africa can And inventory. And than volume it's prices but increased lower, South we mostly take volumes related the are and effects you year. similar is that's mostly that a specifically, total higher America the to to on have.

J. Sikkel

Yes.

add year to the to in well. uncommitted inventory African levels the purchase And extraordinarily is did that I or remaining as either -- our volumes And earlier would are the we that, green. committed Just low. inventory of majority say

processing So we've of do a to shipping and got bit quite there.

have. So inventory we with the we that place a feel in good do

Patrick John Fitzgerald

how Okay. pattern weather volumes? the Any worldwide Nino is expected to of sense tobacco impact El

J. Sikkel

at of that's we tobacco I added in year-on-year. XXX,XXX declined at in I'd the Well, to which markets about And look crop probably XXX,XXX -- the particular, the tonnes. that, if expectation look was size, when by operate, -- you close volumes say the that to have of we tonnes if

were in we by impacted expecting in more the other also the so of think And got El Tanzania like key Zimbabwe, then XX% on, flavor think where Brazil, markets in you about if major probably where a those about world. kind the in growth weather. year-on-year this impacted reduction So markets Nino. is, markets, -- but major is you were We've volumes and by

get those as had markets growth in that didn't we well. the anticipated we So

in So of so to with offset the think key and particularly other considerable in been do and operational doing and But percentage, to volume foundation that in I it's we're what various markets. strong able we've a regions. our quarter -- a far, very first best a to combination

I we're doing good through think managing a situation. job the

Patrick John Fitzgerald

there thumb rule taxes? of good on any Okay. cash is Flavia,

Flavia Landsberg

again, don't we XX cash in guidance it's any at between provide XX. you historically, Well, But taxes. look if and it,

Patrick John Fitzgerald

Okay. And this working purchase you then transactions wondering, are in know just on like basically interim But done you debt front working comprehensive I here? on -- at refi. below-market additional the are on any like you're that that point? you would pursue Or

Flavia Landsberg

We always announce look but nothing for to point. opportunities, this at

Operator

there Please further time. Grigera. ahead. the to to back And I'd this conference are no over Tomas turn questions like go at

Tomas Grigera

Thank August you available results quarter XX, interested for joining any XXXX. for will our remain for call. financial Again, first thank fiscal playback earnings XXXX call in you The through our person year for call. participating

Operator

this today's conclude participation. call. We And your appreciate will

disconnect. now may You

Pyxus International (PYYX) 7 Aug 242025 Q1 Earnings call transcript