Pyxus International, Inc 10-Q for FY2027 Q1
Pyxus International, Inc. (PYYX)
10-Q
2026-08-05
For: 2026-06-30
View Original
Added on
August 05, 2026
About this 10-Q
Pyxus International, Inc filed this 10-Q on August 5, 2026, covering the quarter ended June 30, 2026 (FY2027 Q1).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $437.8M
- down 14.0% from $508.82M a year earlier
- Net loss
- $7.28M
- compared with a net loss of $15.83M a year earlier
- Diluted EPS
- -$0.28
- compared with -$0.62 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Commission File Number) | ||
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | ||||||||||
| | |||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(919 ) 379-4300
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 31, 2026, the registrant had 24,607,791 shares outstanding of Common Stock (no par value).
1
| Pyxus International, Inc. and Subsidiaries | |||||||||||
| Table of Contents | |||||||||||
| Page No. | |||||||||||
| Part I | Financial Information | ||||||||||
| Item 1. | Financial Statements (Unaudited) | ||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| Part II | Other Information | ||||||||||
| Item 1. | |||||||||||
| Item 1A. | |||||||||||
| Item 2. | |||||||||||
| Item 5. | |||||||||||
| Item 6. | |||||||||||
2
Part I. Financial Information
Item 1. Financial Statements
| Pyxus International, Inc. and Subsidiaries | ||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | ||||||||||||
| Sales and other operating revenues | $ | $ | ||||||||||||
| Cost of goods and services sold | ||||||||||||||
| Gross profit | ||||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||
| Other expense, net | ||||||||||||||
| Restructuring and asset impairment charges | ||||||||||||||
| Operating income | ||||||||||||||
| Interest expense, net | ||||||||||||||
| Loss before income taxes and other items | ( | ( | ||||||||||||
| Income tax (benefit) expense | ( | |||||||||||||
| Income (loss) from unconsolidated affiliates, net | ( | |||||||||||||
| Net loss | ( | ( | ||||||||||||
| Net income attributable to noncontrolling interests | ||||||||||||||
| Net loss attributable to Pyxus International, Inc. | $ | ( | $ | ( | ||||||||||
| Loss per share: | ||||||||||||||
| Basic | $ | ( | $ | ( | ||||||||||
| Diluted | $ | ( | $ | ( | ||||||||||
| Weighted average number of shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||||||||
3
| Pyxus International, Inc. and Subsidiaries | ||||||||||||||
| Condensed Consolidated Statements of Comprehensive Loss | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Other comprehensive income, net of tax: | ||||||||||||||
| Foreign currency translation adjustment | ( | |||||||||||||
| Cash flow hedges | ||||||||||||||
| Total other comprehensive income, net of tax | $ | $ | ||||||||||||
| Total comprehensive loss | ( | ( | ||||||||||||
| Comprehensive income attributable to noncontrolling interests | ||||||||||||||
| Comprehensive loss attributable to Pyxus International, Inc. | $ | ( | $ | ( | ||||||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||||||||
4
Pyxus International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
| Restricted cash | ||||||||||||||||||||
| Trade receivables, net | ||||||||||||||||||||
| Other receivables | ||||||||||||||||||||
| Inventories, net | ||||||||||||||||||||
| Advances to tobacco suppliers, net | ||||||||||||||||||||
| Recoverable income taxes | ||||||||||||||||||||
| Prepaid expenses | ||||||||||||||||||||
| Other current assets | ||||||||||||||||||||
| Total current assets | ||||||||||||||||||||
| Investments in unconsolidated affiliates | ||||||||||||||||||||
| Intangible assets, net | ||||||||||||||||||||
| Deferred income taxes, net | ||||||||||||||||||||
| Long-term recoverable income taxes | ||||||||||||||||||||
| Other noncurrent assets | ||||||||||||||||||||
| Right-of-use assets | ||||||||||||||||||||
| Property, plant, and equipment, net | ||||||||||||||||||||
| Total assets | $ | $ | $ | |||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Notes payable | $ | $ | $ | |||||||||||||||||
| Accounts payable | ||||||||||||||||||||
| Advances from customers | ||||||||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||||||||
| Income taxes payable | ||||||||||||||||||||
| Operating leases payable | ||||||||||||||||||||
| Total current liabilities | ||||||||||||||||||||
| Long-term taxes payable | ||||||||||||||||||||
| Long-term debt | ||||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||
| Liability for unrecognized tax benefits | ||||||||||||||||||||
| Long-term leases | ||||||||||||||||||||
| Pension, postretirement, and other long-term liabilities | ||||||||||||||||||||
| Total liabilities | $ | $ | $ | |||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||
Common Stock— | ||||||||||||||||||||
Authorized shares ( | ||||||||||||||||||||
Issued and outstanding shares ( | $ | $ | $ | |||||||||||||||||
| Retained deficit | ( | ( | ( | |||||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||||||||
| Total stockholders’ equity of Pyxus International, Inc. | ||||||||||||||||||||
| Noncontrolling interests | ||||||||||||||||||||
| Total stockholders’ equity | ||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | $ | |||||||||||||||||
See accompanying notes to condensed consolidated financial statements. | ||||||||||||||||||||
5
| Pyxus International, Inc. and Subsidiaries | |||||||||||||||||||||||
| Condensed Consolidated Statements of Stockholders' Equity | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Attributable to Pyxus International, Inc. | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income | |||||||||||||||||||||||
| (in thousands) | Common Stock | Retained Deficit | Currency Translation Adjustment | Pensions, Net of Tax | Derivatives, Net of Tax | Noncontrolling Interests | Total Stockholders' Equity | ||||||||||||||||
| Balance, March 31, 2026 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Net (loss) income | — | ( | — | — | — | ( | |||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive (loss) income, net of tax | — | — | ( | — | — | ||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Net (loss) income | — | ( | — | — | — | ( | |||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
See accompanying notes to condensed consolidated financial statements.
6
Pyxus International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| June 30, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Operating Activities: | ||||||||
| Net loss | $ | ( | $ | ( | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Debt amortization/interest | ||||||||
| Loss on foreign currency transactions | ||||||||
| Equity-based compensation | ||||||||
| Income (loss) from unconsolidated affiliates, net of dividends | ||||||||
| Changes in operating assets and liabilities, net | ||||||||
| Trade and other receivables | ( | |||||||
| Inventories and advances to tobacco suppliers | ( | ( | ||||||
| Deferred items | ( | |||||||
| Recoverable income taxes | ( | ( | ||||||
| Payables and accrued expenses | ( | |||||||
| Advances from customers | ( | ( | ||||||
| Prepaid expenses | ( | ( | ||||||
| Income taxes | ( | |||||||
| Other operating assets and liabilities | ||||||||
| Other, net | ( | ( | ||||||
| Net cash used in operating activities | $ | ( | $ | ( | ||||
| Investing Activities: | ||||||||
| Purchases of property, plant, and equipment | $ | ( | $ | ( | ||||
| Collections from beneficial interests in securitized trade receivables | ||||||||
| Other, net | ||||||||
| Net cash provided by investing activities | $ | $ | ||||||
| Financing Activities: | ||||||||
| Net proceeds from short-term borrowings | $ | $ | ||||||
| Proceeds from revolving loan facilities | ||||||||
| Repayment of revolving loan facilities | ( | ( | ||||||
| Debt issuance costs | ( | ( | ||||||
| Other, net | ||||||||
| Net cash provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes on cash | ( | ( | ||||||
| Increase in cash, cash equivalents, and restricted cash | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Restricted cash at beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||
| Other information: | ||||||||
| Cash paid for income taxes, net | $ | $ | ||||||
| Cash paid for interest, net | ||||||||
| Noncash investing activities: | ||||||||
| Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction | ||||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||
7
Pyxus International, Inc. and Subsidiaries | |||||||||||
Notes to Condensed Consolidated Financial Statements | |||||||||||
(Unaudited) | |||||||||||
| (in thousands, except per share data) | Page No. | ||||||||||
8
1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated interim financial statements represent the consolidation of Pyxus International, Inc. (the "Company," "Pyxus," "we," "us," or "our") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise. These condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the normal and recurring adjustments necessary for a fair presentation of the results of operations, financial position, and cash flows have been included.
These condensed consolidated interim financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026 filed on June 4, 2026. The year-end condensed consolidated balance sheet data was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. Due to the seasonal nature of the Company’s business, the results of operations for a fiscal quarter are not necessarily indicative of the operating results that may be attained for other quarters or a full fiscal year.
2. New Accounting Standards
Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Disaggregation of Income Statement Expenses, which requires a tabular disclosure of relevant expense captions into prescribed natural expense categories. The annual disclosure requirements are effective for the Company’s fiscal year ending March 31, 2028, and the interim period disclosure requirements are effective beginning April 1, 2028. Early adoption is permitted. This new standard will result in additional disclosures within the footnotes to the financial statements, and is not expected to have an impact on the Company’s financial condition, results of operations, or cash flows.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, which replaces the existing model used to determine when cost capitalization is to occur based on various project stages of software development with a more modern approach that introduces a probable-to-complete recognition threshold. The scope of this new guidance also includes the costs an entity incurs to implement a cloud computing arrangement as a customer. This amendment is effective for the Company's annual and interim periods beginning April 1, 2028. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.
In November 2025, the FASB issued ASU No. 2025-09, Hedge Accounting Improvements, to clarify certain aspects of existing hedge accounting guidance, and to more closely align hedge accounting with the economics of an entity's risk management activities. This amendment is effective for the Company’s annual and interim periods beginning April 1, 2027 and requires adoption on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.
In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. This new guidance is effective for the Company’s fiscal year beginning April 1, 2029, including interim periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.
9
3. Revenue Recognition
Product revenues are primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During such processing, ownership remains with the customers. All Other revenue is primarily composed of revenue from the sale of non-tobacco agriculture products. The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the condensed consolidated financial statements:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Leaf: | ||||||||||||||
| Product revenues | $ | $ | ||||||||||||
| Processing and other revenues | ||||||||||||||
| Leaf sales and other operating revenues | ||||||||||||||
| All Other: | ||||||||||||||
| All Other sales and other operating revenues | ||||||||||||||
| Total sales and other operating revenues | $ | $ | ||||||||||||
4. Income Taxes
The Company’s (benefit from) provision for income taxes for the three months ended June 30, 2026 and 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax loss and adjusting for discrete items that occurred during the period.
The effective tax rate for the three months ended June 30, 2026 and 2025 was a benefit of 40.3 % and an expense of 59.6 %, respectively. For the three months ended June 30, 2026, the difference between the Company's effective tax rate and the U.S. statutory rate of 21.0% is primarily due to a tax benefit related to foreign currency losses and the jurisdictional mix of earnings, partially offset by an increase in the Company’s deferred tax valuation allowance.
5. Loss Per Share
The following summarizes the computation of loss per share:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net loss attributable to Pyxus International, Inc. | $ | ( | $ | ( | ||||||||||
| Basic weighted average shares outstanding | ||||||||||||||
Plus: Dilutive equity awards(1) | ||||||||||||||
| Diluted weighted average shares outstanding | ||||||||||||||
| Loss per share: | ||||||||||||||
| Basic | $ | ( | $ | ( | ||||||||||
| Diluted | $ | ( | $ | ( | ||||||||||
(1) For the three months ended June 30, 2026 and 2025, | ||||||||||||||
10
6. Trade Receivables, Net
Trade receivables are net of an allowance for expected credit losses. The following summarizes activity in the allowance for expected credit losses:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Balance, beginning of period | $ | ( | $ | ( | ||||||||||
| Write-offs and other adjustments | ( | |||||||||||||
| Balance, end of period | ( | ( | ||||||||||||
| Trade receivables | ||||||||||||||
| Trade receivables, net | $ | $ | ||||||||||||
7. Inventories, Net
The following summarizes the composition of inventories, net, with the All Other category primarily composed of non-tobacco agricultural products:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||
| Processed tobacco | $ | $ | $ | ||||||||
| Unprocessed tobacco | |||||||||||
| Other tobacco related | |||||||||||
All Other | |||||||||||
| Total | $ | $ | $ | ||||||||
8. Equity Method Investments
The following summarizes the Company's equity method investments as of June 30, 2026:
| Investee Name | Location | Primary Purpose | Ownership Percentage | Basis Difference(1) | ||||||||||
| Adams International Ltd. | Thailand | Purchase and process tobacco | $ | ( | ||||||||||
| Alliance One Industries India Private Ltd. | India | Purchase and process tobacco | ( | |||||||||||
| China Brasil Tabacos Exportadora S.A. | Brazil | Purchase and process tobacco | ||||||||||||
| Oryantal Tütün Paketleme Sanayi ve Ticaret A.Ş. | Turkey | Process tobacco | ( | |||||||||||
| Purilum, LLC | U.S. | Produce flavor formulations and consumable nicotine products | ||||||||||||
| Siam Tobacco Export Corporation Ltd. | Thailand | Purchase and process tobacco | ( | |||||||||||
(1) Basis differences for the Company's equity method investments are due to fair value adjustments recorded during fiscal 2021. | ||||||||||||||
The following summarizes financial information for these equity method investments:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Statement of operations: | ||||||||||||||
| Sales | $ | $ | ||||||||||||
| Gross profit | ||||||||||||||
| Net income (loss) | ( | |||||||||||||
11
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||
| Balance sheet: | |||||||||||
| Current assets | $ | $ | $ | ||||||||
| Property, plant, and equipment and other assets | |||||||||||
| Current liabilities | |||||||||||
| Long-term obligations and other liabilities | |||||||||||
9. Variable Interest Entities
The Company holds variable interests in multiple entities that primarily procure or process inventory or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The following summarizes the Company's financial relationships with its unconsolidated variable interest entities:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||
| Investments in variable interest entities | $ | $ | $ | ||||||||
| Receivables with variable interest entities | |||||||||||
| Guaranteed amounts to variable interest entities (not to exceed) | |||||||||||
10. Intangible Assets, Net
The gross carrying amount and accumulated amortization of intangible assets consist of the following:
| June 30, 2026 | ||||||||||||||||||||
| Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||
| Technology | ( | |||||||||||||||||||
| Trade names | ( | |||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||
| June 30, 2025 | ||||||||||||||||||||
| Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||
| Technology | ( | |||||||||||||||||||
| Trade names | ( | |||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||
12
| March 31, 2026 | ||||||||||||||||||||
| Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||
| Technology | ( | |||||||||||||||||||
| Trade names | ( | |||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||
The following summarizes amortization expense for definite-lived intangible assets:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Amortization expense | $ | $ | ||||||||||||
13
11. Debt Arrangements
The following summarizes debt and notes payable:
Interest Rate(1) | June 30, 2026 | June 30, 2025 | March 31, 2026 | ||||||||||||||
| Senior secured credit facility: | |||||||||||||||||
| ABL Credit Facility | % | $ | $ | $ | |||||||||||||
| Senior secured notes: | |||||||||||||||||
| % | |||||||||||||||||
| Senior secured term loans: | |||||||||||||||||
Intabex Term Loans(3) | % | ||||||||||||||||
Pyxus Term Loans(4) | % | ||||||||||||||||
| Other debt: | |||||||||||||||||
Notes payable(5) | % | ||||||||||||||||
| Total debt | $ | $ | $ | ||||||||||||||
Short-term(5) | $ | $ | $ | ||||||||||||||
| Long-term | |||||||||||||||||
| Letters of credit | $ | $ | $ | ||||||||||||||
(1) Weighted average stated rate for the trailing twelve months ended June 30, 2026 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding. | |||||||||||||||||
(2) Balance of $ | |||||||||||||||||
(3) Balance of $ | |||||||||||||||||
(4) Balance of $ | |||||||||||||||||
(5) Primarily foreign seasonal lines of credit. | |||||||||||||||||
Outstanding Senior Secured Debt
ABL Credit Facility
The Company’s wholly owned subsidiary, Pyxus Holdings, Inc. ("Pyxus Holdings"), certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc. ("Pyxus Parent"), as parent guarantors, entered into an ABL Credit Agreement (as amended, the "ABL Credit Agreement"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, to establish an asset-based revolving credit facility (the "ABL Credit Facility"). The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $150,000 , subject to certain borrowing base limitations. The ABL Credit Facility includes a $20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $170,000 .
The ABL Credit Facility matures on May 12, 2030 or, if earlier, 90 days prior to the earliest stated maturity date of the outstanding senior secured notes and the senior secured term loans (each currently scheduled to mature on December 31, 2027). At June 30, 2026, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.
Intabex Term Loans
The Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan Credit Agreement"), is by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent. The Intabex Term Loan Credit Agreement established a term loan
14
credit facility in an aggregate principal amount of approximately $189,033 (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings, accrued and unpaid PIK interest thereon, and related fees. The Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum. The Intabex Term Loans are stated to mature on December 31, 2027. At June 30, 2026, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.
Pyxus Term Loans
The Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan Credit Agreement"), is by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent. It established a term loan credit facility in an aggregate principal amount of approximately $130,550 (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings and applicable accrued and unpaid PIK interest thereon. The Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum. The Pyxus Term Loans are stated to mature on December 31, 2027. At June 30, 2026, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.
Pursuant to an exchange offer made by Pyxus Holdings and accepted by holders of approximately 92.7 % of the aggregate principal amount of the outstanding 10.0 % Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $260,452 in aggregate principal amount of 8.5 % Senior Secured Notes due December 31, 2027 (the "2027 Notes") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes. The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the "2027 Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent. The 2027 Notes bear interest at a rate of 8.5 % per annum, which interest is computed on the basis of a 360-day year comprised of twelve 30-day months. At June 30, 2026, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.
Detailed descriptions of the instruments governing the Company's outstanding senior secured debt are included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Other Outstanding Debt
Foreign Seasonal Lines of Credit
Excluding long-term credit agreements, the Company typically finances its foreign operations with committed and uncommitted short-term seasonal lines of credit arrangements with a number of banks. These operating lines are generally seasonal in nature, typically extending for a term of 180 days to 365 days corresponding to the tobacco crop cycle in that location. For uncommitted facilities, the lenders have the right to cease making loans and demand repayment of loans at any time or at specified dates. These loans are generally renewed at the outset of each tobacco season. Certain of the seasonal lines of credit are secured by trade receivables and inventories as collateral and are guaranteed by the Company and certain of its subsidiaries. At June 30, 2026, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $1,170,392 , subject to limitations under the ABL Credit Agreement and the agreements governing the Intabex Term Loans, the Pyxus Term Loans, and the 2027 Notes. As of June 30, 2026, the total borrowing capacity under individual foreign seasonal lines of credit range up to $150,630 . As of June 30, 2026, the aggregate amount available for borrowing under the seasonal lines of credit was $351,395 . At June 30, 2026, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term foreign seasonal lines of credit.
12. Securitized Receivables
The Company sells trade receivables to unaffiliated financial institutions under various accounts receivable securitization facilities, two of which are subject to annual renewal.
Under the first facility with Finacity Corporation (the "Finacity Facility"), the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100 % of the receivables to an unaffiliated financial institution. Following the sale and transfer of the receivables to the special purpose entity, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights,
15
including the right to pledge or sell the receivables. This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution. The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5 % of serviced receivables per annum. The Company estimates the expected fee it receives in return for its obligation to service these receivables reflects fair value, and accordingly, no servicing assets or liabilities are recognized. Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the condensed consolidated statements of operations. Under this facility, the Company may request a temporary increase in the investment limit up to an additional $40,000 , applicable only for the period from January 1, 2027 through May 31, 2027. As of June 30, 2026, the investment limit of this facility was $120,000 of trade receivables.
Under the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based upon unobservable inputs, primarily discounted cash flow. As of June 30, 2026, the investment limit under the second facility was $160,000 of trade receivables.
As servicer for the Finacity Facility and the second facility, the Company may receive funds that are due to the unaffiliated financial institutions which are net settled on the next settlement date. As of June 30, 2026 and 2025, and March 31, 2026, trade receivables, net in the condensed consolidated balance sheets have been reduced by $10,817 , $1,056 , and $13,610 as a result of the net settlement, respectively. As of June 30, 2026 and 2025, and March 31, 2026, accrued expenses and other current liabilities in the condensed consolidated balance sheets include $15,681 , $0 , and $0 of net payables for the Finacity Facility. See "Note 15. Fair Value Measurements" for additional information.
Under the other facilities, the Company offers trade receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. As of June 30, 2026, the investment limits under these other facilities were variable based on qualifying sales.
The following summarizes the Company’s accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, applicable only to the first and second facilities, which represents the Company’s residual interest in receivables sold that have not been collected from the customer:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||
| Receivables outstanding in facility | $ | $ | $ | ||||||||
| Beneficial interests | |||||||||||
Cash proceeds from the sale of trade receivables are comprised of an initial cash payment received at the time of transfer and a deferred purchase price receivable, applicable only to the first and second facilities, which represents the Company's right to receive the remaining consideration upon collection of the underlying trade receivables by the purchasers. The following summarizes the Company’s cash collections from both the initial cash proceeds and the deferred purchase price receivable:
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash collections from: | ||||||||
| Initial proceeds | $ | $ | ||||||
| Deferred purchase price receivable | ||||||||
16
13. Guarantees
In certain sourcing regions, the Company guarantees bank loans for suppliers to finance their crops. The Company also guarantees bank loans of certain unconsolidated affiliates. See " Note 15. Fair Value Measurements" for the fair value of the Company's guarantee liability and corresponding fair value classification. The following summarizes amounts guaranteed:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||
| Amounts guaranteed (not to exceed) | $ | $ | $ | ||||||||
Amounts outstanding under guarantee(1) | |||||||||||
| Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing | |||||||||||
(1) The majority of the guarantees outstanding at June 30, 2026 expire within | |||||||||||
14. Derivative Financial Instruments
The Company is exposed to foreign currency exchange rate risk related to its international operations. Principal currencies hedged include the Brazilian real and the Malawian kwacha. The Company uses forward or option currency contracts to manage risks associated with changes in foreign currency exchange rates. These derivative contracts are either designated as cash flow hedges of forecasted transactions for the purchase of green tobacco, other processing-related costs, and selling, general, and administrative expenses, or are not designated as hedging instruments because they are used to partially offset the immediate earnings impact of exchange rate risk on certain foreign currency denominated transactions.
As of June 30, 2026 and 2025, and March 31, 2026, the Company's derivative financial instruments outstanding were designated as cash flow hedges. See "Note 15. Fair Value Measurements" for the fair values of the Company's outstanding derivative assets and liabilities and corresponding fair value classifications.
The following summarizes the U.S. dollar notional amount of derivative contracts outstanding:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||
| Foreign currency exchange contracts | $ | $ | $ | ||||||||
The following summarizes the pre-tax effects of derivative financial instruments in the condensed consolidated statements of comprehensive loss and the condensed consolidated statements of operations:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Foreign currency exchange contracts designated as cash flow hedges: | ||||||||||||||
Gain recognized in accumulated other comprehensive income(1) | $ | $ | ||||||||||||
Gain reclassified from accumulated other comprehensive income to earnings(2) | ||||||||||||||
| Foreign currency exchange contracts not designated as hedging instruments: | ||||||||||||||
Gain recognized in earnings(2) | $ | $ | ||||||||||||
(1) Amount represents the net change in fair value of derivative financial instruments. | ||||||||||||||
(2) These net gains are recognized in cost of goods and services sold within the condensed consolidated statements of operations. | ||||||||||||||
17
15. Fair Value Measurements
The following summarizes the financial assets and liabilities measured at fair value on a recurring basis, along with their corresponding level within the fair value hierarchy:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||||||||||||||||||||
| Level 2 | Level 3 | Total at Fair Value | Level 2 | Level 3 | Total at Fair Value | Level 2 | Level 3 | Total at Fair Value | |||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Securitized beneficial interests | |||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Long-term debt(1) | |||||||||||||||||||||||||||||
| Guarantees | |||||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
(1) This fair value measurement disclosure does not affect the condensed consolidated balance sheets. | |||||||||||||||||||||||||||||
The following summarizes the changes in Level 3 instruments measured on a recurring basis:
| Three Months Ended | ||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Securitized Beneficial Interests | Long-Term Debt | Guarantees | Securitized Beneficial Interests | Long-Term Debt | Guarantees | |||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Issuances | — | — | ||||||||||||||||||
| Settlements | ( | ( | ( | ( | ( | |||||||||||||||
| Losses recognized in earnings | ( | ( | ( | ( | ||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||
16. Contingencies and Other Information
Brazilian Tax Credits
The government in the Brazilian State of Parana ("Parana") issued a tax assessment on October 26, 2007 with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil. At June 30, 2026, the assessment for intrastate trade tax credits taken is $2,550 and the total assessment including penalties and interest is $11,538 . The Company believes it has properly complied with Brazilian law and will contest any assessment through the judicial process. Should the Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the financial statements of the Company.
Other Matters
In addition to the above-mentioned matter, the Company or certain of its subsidiaries are involved in other litigation or legal matters incidental to their business activities, including tax matters. While the outcome of these matters cannot be predicted with certainty, they are being vigorously defended and the Company does not currently expect that any of them will have a material adverse effect on its business or financial position. However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.
18
17. Equity-Based Compensation
Pursuant to the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the "Incentive Plan"), a total of 3,612 shares (which amounts are presented in thousands) have been authorized for grants of equity-based awards to certain employees and non-employee directors.
Restricted Stock Units
Restricted stock units granted under the Incentive Plan are earned ratably for certain employees, subject to their continued employment, from the date of the award to March 31, 2027, and for certain non-employee directors, subject to continued board service, from the date of the award to the Company's next annual meeting of shareholders. Restricted stock units vest upon the earlier of March 31, 2031 or the occurrence of a change-in-control event or a liquidity event as such terms are defined under the restricted stock unit award agreement. The following summarizes activity for restricted stock units:
| (in thousands, except grant date fair value) | Restricted Stock Units | Weighted Average Grant Date Fair Value Per Share | ||||||
| Nonvested, March 31, 2026 | $ | |||||||
| Canceled or forfeited | ( | |||||||
| Nonvested, June 30, 2026 | $ | |||||||
The following summarizes equity-based compensation expense for restricted stock units, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Equity-based compensation expense | $ | $ | ||||||||||||
Unrecognized compensation cost for restricted stock units is $668 as of June 30, 2026, and is expected to be recognized over a weighted average period of 0.72 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.
Performance-Based Stock Units
Under the terms of the performance-based stock units, the amount of shares to be issued to certain employees (ranging from 0 % to 200 % of the number of shares to be issued at the target performance level) will be contingent upon the per share price achieved in a liquidity event (as defined under the terms of the performance-based stock unit award agreement), subject to continued employment through the date of a liquidity event. The contingent liquidity event is not probable as of June 30, 2026, and accordingly, no equity-based compensation expense has been recognized for performance-based stock units. The following summarizes activity for performance-based stock units (at the target performance level):
| (in thousands, except grant date fair value) | Performance-Based Stock Units | Weighted Average Grant Date Fair Value Per Share | ||||||
| Nonvested, March 31, 2026 | $ | |||||||
| Canceled or forfeited | ( | |||||||
| Nonvested, June 30, 2026 | $ | |||||||
19
18. Related Party Transactions
The Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory. The following summarizes activities with the Company's equity method investees:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Sales | $ | $ | ||||||||||||
| Purchases | ||||||||||||||
| Dividends | ||||||||||||||
The Company included the following related party balances in its condensed consolidated balance sheets:
| June 30, 2026 | June 30, 2025 | March 31, 2026 | Location in Condensed Consolidated Balance Sheet | |||||||||||
| Accounts receivable, related parties | $ | $ | $ | Other receivables | ||||||||||
| Accounts payable, related parties | Accounts payable | |||||||||||||
| Advances from related parties | Advances from customers | |||||||||||||
Transactions with Significant Shareholders
Based on a Schedule 13D/A filed with the SEC on June 13, 2024 by Glendon Capital Management, L.P. (the "Glendon Investor"), Holly Kim Olsen, Glendon Opportunities Fund, L.P. and Glendon Opportunities Fund II, L.P., the Glendon Investor reported beneficial ownership of 8,315 shares of the Company’s common stock, representing approximately 33.8 % of the outstanding shares of the Company’s common stock. A representative of the Glendon Investor serves as a director of Pyxus. Based on a Schedule 13D/A filed with the SEC on March 25, 2024, by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, the Monarch Investor reported beneficial ownership of 6,125 shares of the Company’s common stock, representing approximately 24.9 % of the outstanding shares of the Company’s common stock. An individual designated by the Monarch Investor serves as a director of Pyxus. Based on a Schedule 13G/A filed with the SEC on September 3, 2024 by Owl Creek Asset Management, L.P. and Jeffrey A. Altman, Owl Creek Asset Management, L.P. is the investment manager of certain funds and reported beneficial ownership of 3,865 shares of the Company’s common stock on August 31, 2024, representing approximately 15.7 % of the outstanding shares of the Company’s common stock. During the three months ended June 30, 2026, funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") were holders, in part, of the Intabex Term Loans, the Pyxus Term Loans, and/or the 2027 Notes, which are described in "Note 11. Debt Arrangements."
Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of June 30, 2026 and 2025, and March 31, 2026, include $1,246 , $1,499 , and $1,352 , respectively, of interest payable to Investor-Affiliated Funds. Interest expense as presented in the condensed consolidated statements of operations includes $5,182 and $5,466 for the three months ended June 30, 2026 and 2025, respectively, that relates to the Investor-Affiliated Funds.
20
19. Segment Information
The following summarizes financial information relating to the Leaf segment (the Company's sole reportable segment), with the All Other category included for purposes of reconciliation of the Leaf segment balances to the condensed consolidated financial statements:
| Three Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Sales and other operating revenues: | ||||||||||||||
| Leaf | $ | $ | ||||||||||||
| All Other | ||||||||||||||
| Consolidated sales and other operating revenues | $ | $ | ||||||||||||
| Cost of goods and services sold: | ||||||||||||||
| Leaf | $ | $ | ||||||||||||
| All Other | ( | |||||||||||||
| Consolidated cost of goods and services sold | $ | $ | ||||||||||||
| Selling, general, and administrative expenses: | ||||||||||||||
| Leaf | $ | $ | ||||||||||||
| All Other | ||||||||||||||
| Consolidated selling, general, and administrative expenses | $ | $ | ||||||||||||
Other segment items:(1) | ||||||||||||||
| Leaf | $ | $ | ||||||||||||
| All Other | ( | ( | ||||||||||||
| Consolidated other segment items | $ | $ | ||||||||||||
| Leaf segment operating income | $ | $ | ||||||||||||
| All Other operating income (loss) | ( | |||||||||||||
| Restructuring and asset impairment charges | ||||||||||||||
| Consolidated operating income | $ | $ | ||||||||||||
| Interest expense, net | ||||||||||||||
| Loss before income taxes and other items | $ | ( | $ | ( | ||||||||||
(1) Represents the other expense, net caption within the condensed consolidated statements of operations. | ||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Leaf | All Other | Total | Leaf | All Other | Total | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Capital expenditures | ||||||||||||||||||||
21
| June 30, 2026 | June 30, 2025 | March 31, 2026 | |||||||||||||||||||||||||||
| Leaf | All Other | Total | Leaf | All Other | Total | Leaf | All Other | Total | |||||||||||||||||||||
| Assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Trade and other receivables, net | |||||||||||||||||||||||||||||
| Investments in unconsolidated affiliates | |||||||||||||||||||||||||||||
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Readers are cautioned that the statements contained in this report regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements, which are based on current expectations of future events, may be identified by the use of words such as "guidance", "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets," and other words of similar meaning. These statements also may be identified by the fact that they do not relate strictly to historical or current facts. If underlying assumptions prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected. These risks and uncertainties include those discussed in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended March 31, 2026, and in our other filings with the U.S. Securities and Exchange Commission. These risks and uncertainties include: our reliance on a small number of significant customers; continued vertical integration by our customers; global shifts in sourcing customer requirements, including as a result of the imposition of, and changes to, tariffs and other changes in international trade policies; variation in our financial results due to growing conditions, customer indications and other factors; loss of confidence in us by our customers, farmers and other suppliers; migration of suppliers who have historically grown tobacco and from whom we have purchased tobacco toward growing other crops; risks related to our advancement of inputs to tobacco suppliers to be settled upon the suppliers delivering us unprocessed tobacco at the end of the growing season; risks that the tobacco we purchase directly from suppliers will not meet our customers’ quality and quantity requirements; weather and other environmental conditions that can affect the quantity and marketability of our inventory; the impact of increased competition on our earnings; continued high inflation that may adversely affect our profitability and the demand for our leaf tobacco products; risks related to our capital structure, including risks related to our significant debt and our ability to continue to finance our non-U.S. local operations with uncommitted short-term operating credit lines at the local level, our ability to continue to access capital markets to obtain long-term and short-term financing, and our substantial debt which may adversely affect us by limiting future sources of financing, interfering with our ability to pay interest and principal on our indebtedness, and subjecting us to additional risks; potential failure of foreign banks in which our subsidiaries maintain deposits or the failure by such banks to transfer funds or honor withdrawals; the risk that, because our ability to generate cash depends on many factors beyond our control, we may be unable to generate the significant amount of cash required to service our indebtedness; our ability to refinance our current credit facilities at the same availability or at similar or reduced interest rates, including due to volatility and disruption of global credit markets; failure to achieve our stated goals, which may adversely affect our liquidity; developments with respect to our liquidity needs and sources of liquidity; failure by counterparties to derivative transactions to perform their obligations; international business risks, including unsettled political conditions, uncertainty in the enforcement of legal obligations, including the collection of accounts receivable, fraud risks, expropriation, import and export restrictions, exchange controls, inflationary economies, currency risks, risks related to the restrictions on repatriation of earnings or proceeds from liquidated assets of foreign subsidiaries and impacts of international sanctions on our ability to sell or source tobacco in certain regions; risks and uncertainties related to geopolitical conflicts, including the armed conflicts in the Middle East and disruptions in shipping in that area; risks related to our operations in jurisdictions that pose a high risk of potential violations of the Foreign Corrupt Practices Act; exposure to foreign tax regimes in which the rules are not clear, are not consistently applied and are subject to sudden change; fluctuations in foreign currency exchange and interest rates; disruption, failure or security breaches of our information technology systems and other cybersecurity risks; regulations regarding environmental matters that may substantially increase our costs and expose us to potential liability; changing sustainability regulatory requirements and expectations; exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death; certain shareholders have the ability to exercise controlling influence on various corporate matters; reductions in demand for cigarettes and other consumer tobacco products; legislative and regulatory initiatives that may reduce consumption of consumer tobacco products and demand for our services and increase regulatory burdens on us or our customers; government actions that significantly affect the sourcing of tobacco, including governmental actions to identify and assess crop diversification initiatives and alternatives to leaf tobacco growing in countries whose economies depend upon tobacco production; and governmental investigations into our business activities, including, but not limited to, leaf tobacco industry buying and other payment practices.
We do not undertake to update any forward-looking statements that we may make from time to time except to the extent required by law.
Overview
Pyxus is a global agricultural company with businesses having more than 150 years of experience delivering value-added products and services to businesses and customers. The Company is a trusted provider of responsibly sourced, independently verified, sustainable, and traceable products and ingredients.
23
Executive Summary
The Company's first quarter 2027 financial results were consistent with expectations following a strong finish to the prior fiscal year. The current quarter was impacted by lower average costs and sales prices for leaf tobacco in South America and Africa, and slightly lower leaf volumes sold mainly due to the timing of North America shipments, resulting in reduced consolidated sales and other operating revenues by $71.0 million, or 14.0%, compared to the same period a year ago. Total gross profit was similarly impacted over this same period, declining $4.2 million, or 6.4%, but the regional mix of sales, primarily from Europe, resulted in gross profit as a percent of sales increasing to 14.0% during the three months ended June 30, 2026 from 12.9% during the three months ended June 30, 2025, and contributed to little change in leaf gross profit per kilo over the same period.
Tobacco crop production remains elevated again this season across the Southern Hemisphere origins in which we operate, resulting in lower leaf purchase prices in our key sourcing locations. Two consecutive seasons of large crops have allowed us to slow our green tobacco purchases and be more deliberate in our buying approach this season, ensuring that we source lower cost, quality tobacco that meets our customers' requirements. At June 30, 2026, total tobacco inventories, comprised of unprocessed and processed tobacco, decreased by $24.6 million, or 2.3%, when compared to June 30, 2025. Unprocessed tobacco decreased $120.3 million, or 23.4%, to $393.5 million as of June 30, 2026 from $513.9 million as of June 30, 2025, mainly due to lower purchase prices and the slower timing of our green tobacco purchases in Africa and South America. Processed tobacco increased $95.7 million, or 16.6%, to $671.6 million as of June 30, 2026 from $575.9 million as of June 30, 2025, primarily due to higher levels of carry-over inventory from the prior year crop.
Weather Patterns and Crop Conditions
As an agricultural company, our results are inherently subject to major weather patterns, including recurring El Niño and La Niña cycles, which can affect crop size, quality, and the timing of harvesting and purchasing activities in the origins in which we operate. The current El Niño cycle is forecasted to reach its peak effects between the Company's third and fourth quarters of fiscal year 2027 and has been characterized by certain meteorological sources as a "Super" El Niño, with an intensity expected to exceed that of a typical cycle. Historically, our origins in Africa and South America tend to be adversely affected by an El Niño cycle that typically occurs when crops are still in the fields growing, while the crop seasons in Asia, Europe, and North America have largely remained unaffected by past cycles. We are actively monitoring this recent weather development, and while the ultimate impact, if any, on growing conditions and crop volumes cannot be predicted with certainty, we maintain geographically diversified sourcing and continue to assess its potential effect on availability, quality, and cost of leaf tobacco.
24
Results of Operations
Three Months Ended June 30, 2026 and 2025 | ||||||||||||||
| Three Months Ended June 30, | ||||||||||||||
| Change | ||||||||||||||
| (in millions, except per kilo amounts) | 2026 | 2025 | $ | % | ||||||||||
| Consolidated: | ||||||||||||||
| Sales and other operating revenues | $ | 437.8 | $ | 508.8 | (71.0) | (14.0) | ||||||||
| Cost of goods and services sold | 376.4 | 443.2 | (66.8) | (15.1) | ||||||||||
| Gross profit | 61.4 | 65.6 | (4.2) | (6.4) | ||||||||||
| Gross profit as a percent of sales | 14.0 | % | 12.9 | % | ||||||||||
| Selling, general, and administrative expenses | $ | 43.9 | $ | 40.4 | 3.5 | 8.7 | ||||||||
| Other expense, net | 1.3 | 4.2 | (2.9) | (69.0) | ||||||||||
| Restructuring and asset impairment charges | 0.6 | 0.1 | 0.5 | 500.0 | ||||||||||
| Operating income* | 15.7 | 21.0 | (5.3) | (25.2) | ||||||||||
| Interest expense, net | 29.8 | 29.8 | — | — | ||||||||||
| Loss before income taxes and other items* | (14.2) | (8.8) | (5.4) | (61.4) | ||||||||||
| Income tax (benefit) expense | (5.7) | 5.2 | (10.9) | (209.6) | ||||||||||
| Income (loss) from unconsolidated affiliates, net | 1.4 | (1.3) | 2.7 | 207.7 | ||||||||||
| Net income attributable to noncontrolling interests | 0.2 | 0.6 | (0.4) | (66.7) | ||||||||||
| Net loss attributable to Pyxus International, Inc.* | $ | (7.3) | $ | (15.8) | 8.5 | 53.8 | ||||||||
| Leaf: | ||||||||||||||
| Product revenues | $ | 393.0 | $ | 458.2 | (65.2) | (14.2) | ||||||||
| Tobacco costs | 316.9 | 375.7 | (58.8) | (15.7) | ||||||||||
| Transportation, storage, and other period costs | 22.6 | 25.1 | (2.5) | (10.0) | ||||||||||
| Total product cost of goods sold | 339.5 | 400.8 | (61.3) | (15.3) | ||||||||||
| Product gross profit | 53.5 | 57.4 | (3.9) | (6.8) | ||||||||||
| Product gross profit as a percent of sales | 13.6 | % | 12.5 | % | ||||||||||
| Kilos sold | 63.5 | 66.9 | (3.4) | (5.1) | ||||||||||
| Average price per kilo | $ | 6.19 | $ | 6.85 | (0.66) | (9.6) | ||||||||
| Average cost per kilo | 5.35 | 5.99 | (0.64) | (10.7) | ||||||||||
| Average gross profit per kilo | 0.84 | 0.86 | (0.02) | (2.3) | ||||||||||
| Processing and other revenues | $ | 42.8 | $ | 50.2 | (7.4) | (14.7) | ||||||||
| Processing and other costs of services sold | 36.2 | 42.6 | (6.4) | (15.0) | ||||||||||
| Processing and other gross profit | 6.6 | 7.6 | (1.0) | (13.2) | ||||||||||
| Processing and other gross profit as a percent of sales | 15.4 | % | 15.1 | % | ||||||||||
| All Other: | ||||||||||||||
| Sales and other operating revenues | $ | 2.0 | $ | 0.4 | 1.6 | 400.0 | ||||||||
| Cost of goods and services sold | 0.7 | (0.2) | 0.9 | 450.0 | ||||||||||
| Gross profit | 1.3 | 0.6 | 0.7 | 116.7 | ||||||||||
| Gross profit as a percent of sales | 65.0 | % | 150.0 | % | ||||||||||
| * Amounts may not equal column totals due to rounding. | ||||||||||||||
25
Sales and other operating revenues decreased $71.0 million, or 14.0%, to $437.8 million for the three months ended June 30, 2026 from $508.8 million for the three months ended June 30, 2025. This decrease was due to the impact of lower average sales prices primarily for leaf products in South America and Africa, and a decline in volumes sold mainly driven by the timing of shipments in North America. The current crop in North America was substantially shipped in the fourth quarter of fiscal year 2026, whereas comparable crop shipments in the prior year occurred during the first quarter of fiscal year 2026.
Cost of goods and services sold decreased $66.8 million, or 15.1%, to $376.4 million for the three months ended June 30, 2026 from $443.2 million for the three months ended June 30, 2025, corresponding to the reduction in sales and other operating revenues, as well as lower purchasing costs for tobacco.
Gross profit decreased $4.2 million, or 6.4%, to $61.4 million for the three months ended June 30, 2026 from $65.6 million for the three months ended June 30, 2025. This decrease was mainly due to the timing of shipments in North America and customer mix in Africa, partially offset by improved pricing in Europe. These same factors led to a slight reduction in average leaf gross profit per kilo of $0.84 for the three months ended June 30, 2026 compared to average leaf gross profit per kilo of $0.86 for the three months ended June 30, 2025.
Income tax (benefit) expense decreased $10.9 million, or 209.6%, to a benefit of $5.7 million for the three months ended June 30, 2026 from an expense of $5.2 million for the three months ended June 30, 2025. This decrease was primarily attributable to favorable foreign currency impacts recognized during the current-year period, and a decrease in the expense associated with unrecognized tax benefits. See "Note 4. Income Taxes" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
26
Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash generated from operations, short-term borrowings under our foreign seasonal lines of credit, availability under our ABL Credit Facility, and cash collections from our securitized receivables. Our liquidity requirements are affected by various factors from our tobacco leaf business, including crop seasonality, foreign currency and interest rates, green tobacco prices, customer mix, crop size, and quality. Our leaf tobacco business is seasonal, and purchasing, processing, and selling activities have several associated peaks where cash on-hand and outstanding indebtedness may vary significantly compared to year end. The first two quarters of our fiscal year generally represent the peak of our working capital requirements.
We believe that our sources of liquidity will be sufficient to fund our anticipated operating needs for the next twelve months. During such time, our liquidity needs for operations may approach the levels of our anticipated available cash and permitted borrowings under our credit facilities. Unanticipated developments affecting our liquidity needs, including with respect to the foregoing factors, and sources of liquidity, including impacts affecting our cash flows from operations and the availability of capital resources (including an inability to renew or refinance seasonal lines of credit), may result in a deficiency in liquidity. To address a potential liquidity deficiency, we may undertake plans to minimize cash outflows, which could include exiting operations that do not generate positive cash flow. It is possible that, depending on the occurrence of events affecting our liquidity needs and sources of liquidity, such plans may not be sufficient to adequately or timely address a liquidity deficiency.
Debt Financing
We continue to finance our business with a combination of short-term and long-term credit lines, the long-term debt securities, advances from customers, and cash from operations when available. See "Note 11. Debt Arrangements" to the "Notes to Condensed Consolidated Financial Statements" for a summary of our short-term and long-term debt.
We continuously monitor and, as available, adjust funding sources as needed to enhance and drive various business opportunities. From time to time we may take steps to reduce our debt or otherwise improve our financial position. Such actions could include prepayments, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, and refinancing of debt. The amount of prepayments or the amount of debt that may be repurchased, refinanced, or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.
The following summarizes our total borrowing capacity at June 30, 2026 and 2025 under our short-term and long-term credit lines and letter of credit facilities and the remaining available amount after the reduction for outstanding borrowings and amounts reserved for outstanding letters of credit:
| June 30, 2026 | June 30, 2025 | |||||||||||||
| (in millions) | Total Borrowing Capacity | Remaining Amount Available | Total Borrowing Capacity | Remaining Amount Available | ||||||||||
| Senior secured credit facility: | ||||||||||||||
| ABL Credit Facility | $ | 150.0 | $ | 150.0 | $ | 150.0 | $ | 150.0 | ||||||
| Foreign seasonal lines of credit | 1,170.4 | 351.4 | 1,025.2 | 171.2 | ||||||||||
| Letters of credit | 10.9 | 2.6 | 12.3 | 3.4 | ||||||||||
| Total | $ | 1,331.3 | $ | 504.0 | $ | 1,187.5 | $ | 324.6 | ||||||
The total borrowing capacity of our foreign seasonal lines of credit increased $145.2 million and the remaining amount available also increased by $180.2 million when compared to the prior year. Our foreign seasonal lines of credit are utilized to purchase green tobacco in our sourcing origins and provide us with purchasing flexibility. Lower green tobacco prices and the slower pace of our purchasing in the current year have resulted in an increase in the remaining amount available for borrowing under our foreign seasonal lines of credit, which are subject to limitations based on the level of receivables and inventories as collateral and by certain restrictive covenants.
27
Net Debt
We refer to "Net debt," a non-GAAP measure, as total debt liabilities less cash and cash equivalents. We believe this non-GAAP financial measure is useful to monitor leverage and to evaluate changes to the Company's capital structure. A limitation associated with using net debt is that it subtracts cash and cash equivalents, and therefore, may imply that management intends to use cash and cash equivalents to reduce outstanding debt and that cash held in certain jurisdictions can be applied to repay obligations owing in other jurisdictions and without reduction for applicable taxes. In addition, net debt suggests that our debt obligations are less than the most comparable GAAP measure indicates. The following summarizes the computation of net debt:
| (in millions) | June 30, 2026 | June 30, 2025 | March 31, 2026 | ||||||||
| Notes payable | $ | 828.6 | $ | 880.9 | $ | 477.1 | |||||
Long-term debt(1) | 456.0 | 455.1 | 455.8 | ||||||||
| Total debt liabilities | $ | 1,284.6 | $ | 1,336.0 | $ | 932.9 | |||||
| Less: Cash and cash equivalents | 175.9 | 96.4 | 134.3 | ||||||||
| Net debt | $ | 1,108.7 | $ | 1,239.6 | $ | 798.6 | |||||
(1) Long-term debt includes outstanding indebtedness under the ABL Credit Facility. There were no outstanding amounts under the ABL Credit Facility as of each period end shown. Weighted average borrowings outstanding under the ABL Credit Facility were $42.1 million and $57.6 million for the three months ended June 30, 2026 and 2025, respectively. | |||||||||||
Net debt decreased as of June 30, 2026 when compared to June 30, 2025 primarily due to higher cash and cash equivalents from the collection of trade receivables, net, as well as reduced borrowings on our foreign seasonal lines of credit due to lower green tobacco prices and a slower pace of purchasing primarily at our sourcing locations in Africa and South America.
Working Capital
The following summarizes our working capital:
| (in millions except for current ratio) | June 30, 2026 | June 30, 2025 | March 31, 2026 | ||||||||
| Cash, cash equivalents, and restricted cash | $ | 179.5 | $ | 101.4 | $ | 137.7 | |||||
| Trade and other receivables, net | 186.6 | 223.3 | 264.9 | ||||||||
| Inventories and advances to tobacco suppliers, net | 1,192.8 | 1,183.5 | 854.3 | ||||||||
| Recoverable income taxes | 14.4 | 11.7 | 2.9 | ||||||||
| Prepaid expenses and other current assets | 79.7 | 71.1 | 70.8 | ||||||||
| Total current assets* | $ | 1,652.9 | $ | 1,591.0 | $ | 1,330.5 | |||||
| Notes payable | $ | 828.6 | $ | 880.9 | $ | 477.1 | |||||
| Accounts payable | 114.6 | 124.3 | 146.8 | ||||||||
| Advances from customers | 166.7 | 87.4 | 175.0 | ||||||||
| Accrued expenses and other current liabilities | 131.5 | 104.2 | 114.8 | ||||||||
| Income taxes payable | 10.8 | 10.4 | 9.1 | ||||||||
| Operating leases payable | 10.1 | 9.6 | 9.9 | ||||||||
| Total current liabilities* | $ | 1,262.3 | $ | 1,216.8 | $ | 932.8 | |||||
| Current ratio | 1.3 to 1 | 1.3 to 1 | 1.4 to 1 | ||||||||
| Working capital | $ | 390.6 | $ | 374.2 | $ | 397.7 | |||||
| * Amounts may not equal column totals due to rounding. | |||||||||||
Working capital increased $16.4 million, or 4.4%, from June 30, 2025 to June 30, 2026. The improvement was driven by higher cash and cash equivalents resulting from the collection of trade and other receivables, net, and the receipt of cash advances from customers, together with lower outstanding borrowings on our foreign seasonal lines of credit. These improvements were partially offset by higher contract liabilities associated with our obligation to ship tobacco to certain customers at a future date.
28
Inventories
The following summarizes inventory committed to a customer and uncommitted inventory balances for processed tobacco:
| (in millions) | June 30, 2026 | June 30, 2025 | March 31, 2026 | ||||||||
| Committed | $ | 611.3 | $ | 562.3 | $ | 462.2 | |||||
| Uncommitted | 60.3 | 13.6 | 45.2 | ||||||||
| Total processed tobacco | $ | 671.6 | $ | 575.9 | $ | 507.4 | |||||
Total processed tobacco increased by $95.7 million, or 16.6%, from June 30, 2025 to June 30, 2026. This increase is primarily from larger carry-over crop volumes in Africa. The level of uncommitted processed tobacco at June 30, 2026 is higher than the prior-year period, reflecting the current oversupply market environment, compared with more balanced supply and demand conditions a year ago. See "Note 7. Inventories, Net" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
Sources and Uses of Cash
We typically finance our non-U.S. tobacco operations with committed and uncommitted short-term foreign seasonal lines of credit, normally extending for a term of 180 to 365 days, corresponding to the tobacco crop cycle in that market. For uncommitted facilities, the lenders have the right to cease making loans and demand repayment of loans. These short-term seasonal lines of credit are generally renewed at the outset of each tobacco season. We maintain various other financing arrangements to meet the cash requirements of our businesses. See "Note 11. Debt Arrangements" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
We utilize capital in excess of cash flow from operations to finance accounts receivable, inventory, and advances to tobacco suppliers in foreign countries. In addition, we may periodically elect to purchase, redeem, repay, retire, or cancel indebtedness prior to stated maturity under our various foreign credit lines.
As of June 30, 2026, our cash, cash equivalents, and restricted cash was $179.5 million, of which approximately $130.9 million was held in foreign jurisdictions for working capital needs, a majority of which is subject to exchange controls and a portion of which is subject to tax consequences upon repatriation, which could limit our ability to fully repatriate these funds. Fluctuation of the U.S. dollar versus many of the currencies in which we have costs may have an impact on our working capital requirements. We will continue to monitor and hedge foreign currency costs, as needed.
The following summarizes the sources and uses of our cash flows:
| Three Months Ended | ||||||||
| June 30, | ||||||||
| (in millions) | 2026 | 2025 | ||||||
| Net loss | $ | (7.0) | $ | (15.3) | ||||
| Trade and other receivables | 9.6 | (52.4) | ||||||
| Inventories and advances to tobacco suppliers | (339.6) | (388.0) | ||||||
| Payables and accrued expenses | (13.8) | 0.4 | ||||||
| Advances from customers | (6.7) | (49.8) | ||||||
| Other | (2.2) | 9.8 | ||||||
| Net cash used in operating activities | $ | (359.7) | $ | (495.3) | ||||
| Collections from beneficial interests in securitized trade receivables | 58.5 | 41.0 | ||||||
| Other | (3.9) | (3.4) | ||||||
| Net cash provided by investing activities | $ | 54.6 | $ | 37.6 | ||||
| Net proceeds from short-term borrowings | 353.6 | 476.9 | ||||||
| Other | (5.1) | (2.4) | ||||||
| Net cash provided by financing activities | $ | 348.5 | $ | 474.5 | ||||
| Effect of exchange rate changes on cash | (1.5) | (1.0) | ||||||
| Increase in cash, cash equivalents, and restricted cash | $ | 41.9 | $ | 15.8 | ||||
The change in cash, cash equivalents, and restricted cash for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 increased by $26.1 million. This increase was due to higher collections of cash from customers to
29
satisfy outstanding trade receivables and advances from customers in exchange for our promise to deliver processed tobacco at a future date, partially offset by reduced proceeds from short-term borrowings due to lower green tobacco prices in Africa and South America.
Planned Capital Expenditures
Capital spend for fiscal year 2027 includes strategic projects to drive long-term efficiencies and cost optimization at our largest operations in Africa and South America. Capital expenditures are also planned for the routine replacement of machinery and equipment, and investments in other such assets to enhance our operational effectiveness and to support our ongoing sustainability efforts. For the three months ended June 30, 2026, we incurred approximately $4.2 million in capital expenditures, and are expecting to incur an additional $34.2 million for the remainder of the fiscal year ending March 31, 2027.
Pension and Postretirement Health and Life Insurance Benefits
The following summarizes cash contributions to pension and postretirement health and life insurance benefits:
| Three Months Ended | |||||
| (in millions) | June 30, 2026 | ||||
| Contributions made during the period | $ | 1.2 | |||
| Contributions expected for the remainder of the fiscal year | 3.3 | ||||
| Total | $ | 4.5 | |||
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates since March 31, 2026. For information regarding our critical accounting estimates, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risk exposures since March 31, 2026. For a discussion of our exposure to market risk, see Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) designed to provide reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Due to inherent limitations, our disclosure controls and procedures, however well designed and operated, can provide only reasonable assurance (not absolute) that the objectives of the disclosure controls and procedures are met.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as required by Rule 13a-15(b) of the Exchange Act) as of June 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective to provide reasonable assurance as of June 30, 2026.
Changes in Internal Control over Financial Reporting
As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that no changes in our internal control over financial reporting occurred during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
30
Part II. Other Information
Item 1. Legal Proceedings
See "Note 16. Contingencies and Other Information" to the "Notes to Condensed Consolidated Financial Statements" for additional information with respect to legal proceedings, which are incorporated by reference herein.
Item 1A. Risk Factors
In addition to the other information set forth in this report and in our other filings with the Securities and Exchange Commission, investors should carefully consider our risk factors, which could materially affect our business, financial condition, or operating results. As of the date of this report, there are no material changes or updates to the risk factors previously disclosed in Part I, Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The Company did not repurchase any of its equity securities during the three months ended June 30, 2026.
On August 15, 2024, the Board of Directors authorized a program to repurchase up to $10,000,000 plus fees and expenses of our common stock in the open market or through privately negotiated transactions, subject to limitations under the Company's debt agreements (which currently limit the aggregate amount that may be applied to repurchase shares of common stock to $1,000,000). The repurchase by the Company on August 21, 2024 of shares of its common stock for approximately $1,000,000, inclusive of brokerage fees, was applied to this limit. This program expires on August 15, 2027. If current restrictions under applicable debt agreements are modified to permit further repurchases of common stock by the Company, the number, price, structure and timing of any further share repurchases will be at the Company's sole discretion, and any such future repurchases of our common stock are dependent on market conditions, liquidity needs, and certain restrictions under our debt arrangements, among other factors.
No cash dividends on shares of common stock of Pyxus International, Inc. were paid to shareholders during the three months ended June 30, 2026. As of June 30, 2026, the payment of such dividends is restricted under the terms of our debt agreements.
Item 5. Other Information
During the three months ended June 30, 2026, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
Item 6. Exhibits
| Exhibit No. | Description | |||||||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | ||||||||
| Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | ||||||||
| Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | ||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (filed herewith) | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema (filed herewith) | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith) | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase (filed herewith) | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase (filed herewith) | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith) | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
31
| SIGNATURE | ||||||||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | ||||||||
| Pyxus International, Inc. | ||||||||
Date: August 5, 2026 | /s/ Christopher G. Meredith | |||||||
| Christopher G. Meredith | ||||||||
| Corporate Controller | ||||||||
| (Principal Accounting Officer) | ||||||||
32
Exhibit 31.1
CERTIFICATION
I, J. Pieter Sikkel, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Pyxus International, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ J. Pieter Sikkel | ||
| J. Pieter Sikkel President and Chief Executive Officer | ||
August 5, 2026 | ||
Exhibit 31.2
CERTIFICATION
I, Dustin L. Styons, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Pyxus International, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ Dustin L. Styons | ||
| Dustin L. Styons Executive Vice President and Chief Financial Officer | ||
August 5, 2026 | ||
Exhibit 32
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
In connection with the Quarterly Report on Form 10-Q of Pyxus International, Inc. (the "Company") for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), to their knowledge, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 5, 2026
| /s/ J. Pieter Sikkel | ||
| J. Pieter Sikkel President and Chief Executive Officer | ||
| /s/ Dustin L. Styons | ||
| Dustin L. Styons Executive Vice President and Chief Financial Officer | ||