PYYX 10-K & 10-Q changes, risk factors and insider trading
Pyxus International, Inc. · OTC · Wholesale-Farm Product Raw Materials · CIK 939930 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Shifts in customer requirements for sourcing tobacco could negatively affect our organizational structure, asset base, and results of operations, including shifts resulting from the imposition of tariffs.”
New heading “Risks Related to Our Financial Condition and Capital Structure”
New heading “Failure of foreign banks in which our subsidiaries deposit funds or the failure of those foreign banks to transfer funds or honor withdrawals, may affect our results of operations.”
New heading “We face risks related to global conflicts, which could significantly disrupt our operations and access to capital.”
New heading “We cannot assure you that material weaknesses in our internal control over financial reporting ("ICFR") will not be identified in the future.”
New heading “Our joint venture manufactures and supplies e-liquid and consumable nicotine-related products, which inherently carry the risk of exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death, and the Company and our related joint venture could be affected by such actions through reputational impact or claims alleging that our supplied materials contributed to the alleged harm.”
Removed heading “Shifts in customer requirements for sourcing tobacco may negatively affect our organizational structure, asset base, and results of operations, including shifts resulting from the imposition of tariffs.”
Removed heading “We cannot assure you that material weaknesses in our internal controls over financial reporting will not be identified in the future.”
Removed heading “Our e-liquids business faces inherent risk of exposure to product liability claims, regulatory action, and litigation if its products are alleged to have caused significant loss, injury, or death.”
Removed heading “Failure of foreign banks in which our subsidiaries deposit funds or the failure to transfer funds or honor withdrawals may affect our results of operations.”
Largest changes
“We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing conflicts in the Middle East, including conflicts involving Iran and Israel. Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy and capital markets resulting from such conflicts or any other geopolitical tensions. U.S. …”see in full comparison
“Although we monitor our internal controls, and improve them as needed, we cannot assure you that material weaknesses will not occur in the future. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations or result in misstatements in our financial statements in amounts that could be material. …”see in full comparison
“Although we monitor our ICFR, and improve them as needed, we cannot assure you that material weaknesses will not occur in the future. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations or result in misstatements in our financial statements in amounts that could be material. …”see in full comparison
“The risk of class-based litigation (and individual litigation) for manufacturers and distributors of e-liquids and other consumable nicotine products, and others involved in the consumable nicotine industry, is significant, particularly in the face of increasing health and marketing concerns, the potential for product recalls, or other product-related issues. The U.S. has a highly active plaintiffs’ bar. Recent years have seen several purported class action lawsuits in the U.S. against manufacturers, distributors and suppliers of e-liquid and other consumable nicotine-related products. …”see in full comparison
“The risk of class-based litigation (and individual litigation) for manufacturers and distributors of e-liquids and other vaping products, and others involved in the vaping industry, is significant, particularly in the face of increasing health and marketing concerns, the potential for product recalls, or other product-related issues. The U.S. has a highly active plaintiffs’ bar. Recent years have seen several purported class action lawsuits in the U.S. against manufacturers and distributors of e-liquids and other vaping products. …”see in full comparison
“We are subject to the FCPA, which generally prohibits companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or maintaining business and/or other benefits. Certain of our customers, including China National Tobacco Corporation, are state-owned, and their officers and employees may qualify as foreign officials under the FCPA. In addition, we operate in certain jurisdictions that pose a high risk of potential FCPA violations. …”see in full comparison
Full comparison: every changed paragraph (64)
The following risk factors should be read carefully in connection with evaluating our business and the forward-looking statements contained in this Annual Report. Any of the following risks could materially adversely affect our business, our operating results, our financial condition, and the actual outcome of matters as to which forward-looking statements are made in this Annual Report. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
The customers of our leaf tobacco business are manufacturers of cigarette and other tobacco products. Several of these customers individually may account for a significant portion of our sales in a normal year. For the year ended March 31, 2025, Philip Morris International Inc., China National Tobacco Corporation, and Japan Tobacco International each accounted for 10% or more of our total sales and other operating revenues. In addition, tobacco product manufacturers have experienced consolidation, and further consolidation among our customers could decrease customer demand for our leaf tobacco or processing services. The loss of one or more of our significant customers could have a material adverse effect on our financial results.
Shifts in customer requirements for sourcing tobacco may negatively affect our organizational structure, asset base, and results of operations, including shifts resulting from the imposition of tariffs.
If our customers significantly alter their requirements for tobacco volumes from certain regions, we may have to change our production facilities and alter our fixed asset base in certain origins. Shifts in sourcing of tobacco may occur as a result of currency fluctuations, including changes in currency exchange rates against the United States Dollar ("USD"), the imposition of tariffs and other changes in international trade policies. For example, tariffs imposed in 2018 by China on U.S. agricultural products, including tobacco, in response to U.S.-imposed tariffs on Chinese manufactured goods, adversely impacted our shipping volumes from the U.S. at that time since impacted customers sought to source tobacco from jurisdictions not subject to these tariffs. This shift in customer sourcing requirements adversely affected our results of operations for some time, as it is not possible to immediately adjust to such customer-driven shifts in sourcing origins.
Recent tariffs announced by the U.S. government, including, for example, on goods from China, Canada, and Mexico, has resulted in the imposition of retaliatory tariffs by impacted governments, and additional tariffs may be imposed. For example, in March 2025, China's Ministry of Finance announced tariffs on certain agricultural imports from the U.S. While we continue to monitor trade discussions that could impact our business, we may not be able to timely or efficiently adjust to shifts in sourcing origins as a result of such tariffs, or any other tariffs and retaliatory tariffs that may be imposed in the future, which could similarly adversely affect our results of operations.
We have incurred, and may continue to incur, restructuring charges as we continue to adjust to shifts in sourcing. Adjusting our capacity and adjusting to shifts in sourcing may have an adverse impact on our ability to manage our costs and could have an adverse effect on our financial performance. In addition, certain of our most significant customers, including Philip Morris International Inc. and British American Tobacco, have publicly announced intentions to move toward smoke-free products, with smoke-free products replacing traditional cigarettes. Generally, smoke-free products require less tobacco in production than traditional cigarettes. An increasing trend toward the replacement of traditional cigarettes with smoke-free products, whether driven by our customers or by consumers, could materially adversely affect our results of operations.
Our financial results may be significantly affected by fluctuations in tobacco growing season conditions and crop sizes, which affect the supply of tobacco to our customers. Crop sizes may be affected by, among other things, precipitation levels, crop infestation and disease, the volume of annual tobacco plantings and yields realized by suppliers, and suppliers' elections to grow crops other than tobacco. The cultivation period for tobacco is dependent upon a number of factors, including the weather and other natural events, such as hurricanes, floods, and tornadoes, and our processing schedule and results of operations for any quarterly period can be significantly altered by these factors. The unpredictability may be exacerbated by the effects of climate change, which could increase the likelihood or severity of disruptive weather events.
The cost of acquiring tobacco can fluctuate greatly due to crop sizes and increased competition in certain markets where we purchase tobacco. For example, short crops in periods of high demand translate into higher average green prices, higher throughput costs, and less volume to sell. Furthermore, large crops translate into lower average green prices, lower throughput costs, and excess volume to sell.
The timing and unpredictability of customer indications, orders, and shipments could require us to keep tobacco in inventory, which increases our balance sheet risk and could result in variations in financial results. The timing of shipments can be materially impacted by shortages of containers and vessels for shipping, increased spot-prices for shipping prompting vessel operators to reduce cargo allocations of our customers' containers covered by lower-priced, long-term shipping arrangements, and infrastructure and accessibility issues in the ports we use for shipment.
We may, from time to time in the ordinary course of business, keep a significant amount of processed tobacco in inventory for our customers. Control is transferred and revenue is recognized for the sale of inventory at a point in time, in accordance with the shipping terms of the contract. As individual shipments may represent significant amounts of revenue, our financial results may vary significantly depending on our customers’ needs and shipping instructions. These fluctuations result in varying volumes and sales in given periods, which also reduces your ability to compare our financial results in different periods or in the same periods in different years.
Our arrangements with suppliers vary depending on our predictions of future supply and demand dynamics, local historical practice, and availability of capital. In some locales, we purchase seeds, fertilizer, pesticides, and other products related to growing tobacco, which represent prepaid inventory, and issue them to suppliers with whom we have purchase contracts. The suppliers then utilize these inputs to grow tobacco, which we are contractually obligated to purchase if they meet our specifications. These advances to tobacco suppliers are settled as part of the consideration paid upon the suppliers delivering us unprocessed tobacco at market prices. The quantity and quality of tobacco delivered, both of which are outside of our control at the time we make advances to suppliers, ultimately determine the market value of the tobacco sourced. Unsatisfactory quantities or quality of the tobacco delivered could result in losses with respect to the advances made to these suppliers or the deferral of those advances.
The leaf tobacco industry is highly competitive. Competition is based primarily on the prices charged for products and services as well as the merchant’s ability to meet customer specifications in the buying, processing, and financing of tobacco. The loss or substantial reduction of one or more of our significant customers could reduce our earnings. Although Pyxus is one of only two primary global independent publicly held leaf tobacco merchants, cigarette manufacturers also buy tobacco directly from local and regional suppliers. We face increasing competition from new local and regional independent leaf merchants with low fixed costs and overhead and good local customer connections, where the new entrants have been able to capitalize in the global transition to those markets. Any of these sources of new competition may result in less tobacco available for us to purchase and process in the applicable markets.
We are subject to the FCPA, which generally prohibits companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or maintaining business and/or other benefits. Certain of our customers, including China National Tobacco Corporation, are state-owned, and their officers and employees may qualify as foreign officials under the FCPA. In addition, we operate in certain jurisdictions that pose a high risk of potential FCPA violations. Although our corporate policy prohibits foreign bribery and we have adopted procedures to promote compliance, we cannot assure you that our policy, procedures, and controls will operate effectively at all times to protect us against liability under the FCPA for actions taken by our agents, employees, and intermediaries with respect to our business or any businesses that we may acquire. Failure to comply with the FCPA, other anti-corruption laws and other laws governing the conduct of business with government entities (including local laws) could lead to criminal and civil penalties and other remedial measures (including further changes or enhancements to our procedures, policies, and controls, the imposition of a compliance monitor at our expense, potential personnel changes and/or disciplinary actions), any of which could have an adverse impact on our business, financial condition, results of operations, and liquidity. Investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities also could have an adverse impact on our business, financial condition, and results of operations.
Though we conduct business in many countries around the world, our sales of tobacco, consistent with the business of the leaf tobacco industry, are generally conducted in USD. We generally must purchase tobacco in foreign countries using local currency. As a result, local country operating costs, including the purchasing and processing costs for tobaccos, are subject to the effects of exchange fluctuations of the local currency against the USD. When the USD weakens against foreign currencies, our costs for purchasing and processing tobacco in such currencies increases. Although we operate in many foreign countries and are exposed to fluctuations in the currencies of numerous foreign countries, exchange fluctuation in the Brazilian Real against the USD has the greatest potential for impact on our financial results. We attempt to reduce such currency risks by matching the timing of our working capital borrowing needs against the tobacco purchasing and processing funds requirements in the currency of the country where the tobacco is grown. Fluctuations in the value of foreign currencies can significantly affect our operating results.
We rely on information technology systems, including systems hosted by third-party service providers. For example, our enterprise resource planning system and our domestic employee payroll system are hosted by external service providers. Although we have disaster recovery plans and intrusion preventive mitigating tools and services in-place, our portfolio of hardware and software products, solutions and services and our enterprise IT systems, including those hosted by service providers, may be vulnerable to damage or disruption caused by circumstances beyond our control, such as catastrophic events, power outages, natural disasters, computer system, or network failures, computer viruses or other malicious software programs, and cyber-attacks, including system hacking and other cyber-security breaches. The failure or disruption of our IT systems to perform as anticipated could disrupt our business and result in decreased performance, significant remediation costs, transaction errors, loss of data, processing inefficiencies, downtime, litigation, and the loss of suppliers or customers. A significant disruption or failure could have a material adverse effect on our business operations, financial performance, and financial condition.
We cannot assure you that material weaknesses in our internal controls over financial reporting will not be identified in the future.
Although we monitor our internal controls, and improve them as needed, we cannot assure you that material weaknesses will not occur in the future. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations or result in misstatements in our financial statements in amounts that could be material. Ineffective internal controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on the value of our common stock and/or publicly traded debt and could also require additional restatements of our prior reported financial information. In addition, because we are not an "accelerated filer" under applicable SEC regulations, we are not required to obtain and present a report of our independent accounting firm with respect to the effectiveness of our internal control over financial reporting and we have not obtained such a report with respect to an evaluation of our internal controls as of March 31, 2025 and, accordingly, no such report is included in this Form 10-K.
We are subject to environmental, health, and safety laws and regulations in the jurisdictions where we operate. Such regulations govern, among other things, emissions of pollutants into the air, wastewater discharges, waste disposal, the investigation and remediation of soil and groundwater contamination, and the health and safety of our employees. For example, our products and the raw materials used in its production processes are subject to numerous environmental laws and regulations. We may be required to obtain environmental permits from governmental authorities for certain of its current or proposed operations. From time to time, we may not be in full compliance with such laws, regulations, and permits. If we violate or fail to comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators.
In addition, several governments have implemented or are considering implementing due diligence procedures to ensure strict compliance with environmental, labor, and government regulations. For example, the European Union enacted broad due diligence reporting requirements for all industries operating within Europe. Due to general uncertainty regarding the timing, content, and extent of any such regulatory changes, we cannot predict the impact, if any, that these changes could have to our business, financial condition, and results of operations.
Our e-liquids business faces inherent risk of exposure to product liability claims, regulatory action, and litigation if its products are alleged to have caused significant loss, injury, or death.
As a manufacturer and distributor of products that are ingested or otherwise consumed by humans, our e-liquids business faces the risk of exposure to product liability claims, regulatory action, and other litigation (including class proceedings and individual proceedings) if its products are alleged to have caused loss, injury, or death. Our e-liquids business may be subject to these types of claims, including that: (i) its products caused or contributed to injury, illness, or death; (ii) it made false, misleading or impermissible claims; (iii) it failed to include adequate labeling and instructions for use; and/or (iv) it failed to include adequate warnings concerning possible side effects or interactions with other substances. Previously unknown adverse reactions resulting from human consumption of these e-liquids products alone or in combination with other medications or substances could also occur. In addition, the manufacture and sale of any ingested or consumable product involves a risk of injury to consumers due to tampering by unauthorized third parties or product contamination. Our e-liquids business may in the future have to recall certain of its products due to potential contamination and quality assurance concerns. Product liability claims or regulatory actions against our e-liquids business could result in increased costs and could adversely affect its reputation and goodwill with its consumers. We cannot assure you that product liability insurance can be maintained on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could result in the Company's becoming subject to significant liabilities that are uninsured.
The risk of class-based litigation (and individual litigation) for manufacturers and distributors of e-liquids and other vaping products, and others involved in the vaping industry, is significant, particularly in the face of increasing health and marketing concerns, the potential for product recalls, or other product-related issues. The U.S. has a highly active plaintiffs’ bar. Recent years have seen several purported class action lawsuits in the U.S. against manufacturers and distributors of e-liquids and other vaping products. These circumstances create enhanced risk and exposure for the Company given the nature of its operations, the products it manufactures, distributes, and sells, and its business environment.
Risks Related to Our Capital StructureIndebtedness
We may not be able to renew or refinance our senior secured indebtedness, including our ABL credit facility, or other indebtedness on substantially similar terms, or at all, whether due to volatility and disruption of global credit markets or otherwise. We may have to pay additional fees and expenses that we might not have to pay under normal circumstances, and we may have to agree to terms that could increase the cost of our debt structure. If we are unable to renew or refinance our ABL credit facility and other senior secured indebtedness on terms that are substantially similar to the terms currently available to us or obtain alternative or additional financing arrangements, we may not be able to repay the ABL credit facility, our senior secured indebtedness, or certain of our other indebtedness, which may result in a default.
Despite current indebtedness levels, we may still be able to incur substantiallyadditional moredebt, debt. Thiswhich could exacerbate furtherincrease the risks associated with our significant leverage.
We may be able to incur substantial additional indebtedness in the future to the extent permitted under our existing credit arrangements. As of March 31, 2025,2026, $650.2$747.3 million was available for borrowing under our short and long-term credit facilities, including letters of credit. If new debt is added to our current debt levels, the risks discussed above could intensify.
The customers of our leaf tobacco business are manufacturers of cigarette and other tobacco products. Several of these customers individually may account for a significant portion of our sales in a normal year. For the year ended March 31, 2026, Philip Morris International Inc., China National Tobacco Corporation, and Japan Tobacco International each accounted for 10% or more of our total sales and other operating revenues. In addition, tobacco product manufacturers have experienced consolidation, and further consolidation among our customers could decrease customer demand for our leaf tobacco or processing services. The loss of one or more of our significant customers could have a material adverse effect on our financial results.
Shifts in customer requirements for sourcing tobacco could negatively affect our organizational structure, asset base, and results of operations, including shifts resulting from the imposition of tariffs.
We procure and process leaf tobacco across multiple countries and regions, and customer procurement strategies and decisions may be influenced by prevailing macroeconomic conditions, including currency fluctuations, such as changes in currency exchange rates relative to the United States Dollar (“USD”), the imposition of tariffs and other changes in international trade policies.
For example, tariffs announced by the U.S. government have resulted in the imposition of retaliatory tariffs by impacted governments, and recent tariff actions, and future tariff actions, by the U.S. government may result in additional tariffs being imposed. As a result, we have experienced, and continue to experience, shifts in customer purchasing behavior in affected jurisdictions. In addition to risks that we may not be able to fully supply customer needs from unaffected regions in response to such shifts in purchasing behavior, such shifts have required, and may continue to require, the Company to evaluate and adjust how we conduct our business and operations in affected regions. While we continue to monitor trade developments that could impact our customers and our business, our sales opportunities may be adversely affected by such shifts in customer purchasing behavior and we may not be able to adjust our operations in a timely or efficient manner, which could adversely affect our results of operations.
We have incurred, and may continue to incur, costs as we continue to adjust to shifts in sourcing, including in response to tariff actions. If our customers significantly alter their requirements for tobacco volumes from certain regions, we may have to change our production facilities and alter our fixed asset base in certain origins. Adjusting our capacity and adjusting to shifts in sourcing may have an adverse impact on our ability to manage our costs and could have an adverse effect on our financial performance.
In addition, certain of our most significant customers, including Philip Morris International Inc. and British American Tobacco, have publicly announced intentions to move toward smoke-free, alternative tobacco and nicotine products replacing traditional cigarettes. Generally, these alternative tobacco and nicotine products require less, and in some cases no, tobacco in production as compared to traditional cigarettes and other combustible tobacco products. An increasing shift toward alternative tobacco and nicotine products, whether driven by our customers or by consumer preferences, could materially adversely affect our results of operations.
Our financial results may be significantly affected by fluctuations in tobacco growing season conditions and crop sizes, which affect the supply of tobacco to our customers. Crop sizes may be affected by, among other things, precipitation levels, crop infestation and disease, the volume of annual tobacco plantings and yields realized by suppliers, the availability of crop inputs, and suppliers' elections to grow crops other than tobacco. The cultivation period for tobacco is dependent upon a number of factors, including the weather and other natural events, such as hurricanes, floods, and tornadoes, and our processing schedule and results of operations for any quarterly period can be significantly altered by these factors. The unpredictability may be exacerbated by the effects of climate change, which could increase the likelihood or severity of disruptive weather events.
The cost of acquiring tobacco can fluctuate greatly due to crop sizes and increased competition in certain markets where we purchase tobacco. For example, short crops in periods of high demand translate into higher average green tobacco prices, higher throughput costs, and less volume to sell. Conversely, large crops translate into lower average green tobacco prices, lower throughput costs, and excess volume to sell.
From time to time in the ordinary course of business, we may hold significant quantities of processed tobacco in inventory due to the timing and unpredictability of customer indications, orders, and shipments, which increases our balance sheet risk and may contribute to variability in financial results. The timing of shipments can be materially impacted by shortages of containers and vessels for shipping, increased spot-prices for shipping prompting vessel operators to reduce cargo allocations of our customers' containers covered by lower-priced, long-term shipping arrangements, and infrastructure and accessibility issues in the ports we use for shipment.
Control of processed tobacco is transferred and revenue is recognized for the sale of inventory at a point in time, in accordance with the shipping terms of the contract. As individual shipments may represent significant amounts of revenue, our financial results may vary significantly depending on our customers’ needs and shipping instructions. These fluctuations result in varying volumes and sales in given periods, which may limit your ability to compare our financial results in different periods or in the same periods in different years.
Our arrangements with suppliers vary depending on our predictions of future supply and demand dynamics, local historical practice, and availability of capital. In some locales, we purchase seeds, fertilizer, pesticides, and other products related to growing tobacco, which represent prepaid inventory, and issue them to suppliers with whom we have purchase contracts. The suppliers then utilize these inputs to grow tobacco, which we are contractually obligated to purchase if it meets our specifications. These advances to tobacco suppliers are settled as part of the consideration paid upon the suppliers delivering us unprocessed tobacco at market prices. The quantity and quality of tobacco delivered, both of which are outside of our control at the time we make advances to suppliers, ultimately determine the market value of the tobacco sourced. Unsatisfactory quantities or quality of the tobacco delivered could result in losses with respect to the advances made to these suppliers or the deferral of those advances.
The leaf tobacco industry is highly competitive. Competition is based primarily on the prices charged for products and services as well as the merchant’s ability to meet customer specifications in the buying, processing, and financing of tobacco. The loss or substantial reduction of one or more of our significant customers could reduce our earnings. Although Pyxus is one of only two primary global independent publicly held leaf tobacco merchants, cigarette manufacturers also buy tobacco directly from local and regional suppliers. We face increasing competition from new local and regional independent leaf merchants with low fixed costs and overhead and good local customer connections, where the new entrants have been able to capitalize in the global transition to those markets. Due to their lower cost structures, these merchants may offer prices on products and services that are lower than our prices. Additionally, some of our customers may also directly source leaf tobacco from farmers to meet some of their raw material needs. Any of these sources of new competition may result in less tobacco available for us to purchase and process in the applicable markets.
Risks Related to Our Financial Condition and Capital Structure
We may not be able to renew or refinance our ABL credit facility or other indebtedness, including our senior secured indebtedness, on substantially similar terms, or at all, because of volatility and disruption of global credit markets. We may have to pay additional fees and expenses that we might not have to pay under normal circumstances, and we may have to agree to terms that could increase the cost of our debt structure. If we are unable to renew or refinance our ABL credit facility and other senior secured indebtedness on terms that are substantially similar to the terms currently available to us or obtain alternative or additional financing arrangements, we may not be able to repay the ABL credit facility, our senior secured indebtedness, or certain of our other indebtedness, which may result in a default.
Failure of foreign banks in which our subsidiaries deposit funds or the failure to transfer funds or honor withdrawals may affect our results of operations.
Failure of foreign banks in which our subsidiaries deposit funds or the failure of those foreign banks to transfer funds or honor withdrawals, may affect our results of operations.
We face risks related to global conflicts, which could significantly disrupt our operations and access to capital.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing conflicts in the Middle East, including conflicts involving Iran and Israel. Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy and capital markets resulting from such conflicts or any other geopolitical tensions. U.S. and global markets have experienced and will likely continue to experience volatility and disruption following the escalation of geopolitical tensions and the start of the conflicts in the Middle East. Although the length and impact of the ongoing military conflict is highly unpredictable, the impact of these military conflicts could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Disruption of global financial markets and a recession or market correction, including the significant tariffs imposed by the United States on imports from other countries and other global macroeconomic factors such as inflation and rising interest rates, could reduce our ability to access capital, which could in the future negatively affect our liquidity and could materially affect our business.
In addition, we maintain a number of operations in the Middle East, including a processing facility in Jordan, and supply a number of customers in that region. The scope of the ongoing military conflicts in the Middle East is highly unpredictable, and nations in the Middle East not directly involved in the conflict have been targeted for attacks. Accordingly, such hostilities may directly impact our operations and customers in that region, which could have a material adverse effect on our business and results of operations. Further, such armed conflicts have adversely affected shipping in that region. The timing of shipments of our tobacco can be materially impacted by shortages of containers and vessels for shipping, increased spot-prices for shipping prompting vessel operators to reduce cargo allocations of our customers' containers covered by lower-priced, long-term shipping arrangements, and infrastructure and accessibility issues in the ports we use for shipment. Our results of operations may be materially adversely affected if such conflicts continue to disrupt shipping to the extent that our shipments cannot be made as anticipated or at all.
We are subject to the FCPA, which generally prohibits companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or maintaining business and/or other benefits. Certain of our customers, including China National Tobacco Corporation, are state-owned, and their officers and employees may qualify as foreign officials under the FCPA. In addition, we operate in certain jurisdictions that pose a high risk of potential FCPA violations. Although our corporate policy prohibits foreign bribery and we have adopted procedures to promote compliance, we cannot assure you that our policy, procedures, and controls will operate effectively at all times to protect us against liability under the FCPA for actions taken by our agents, employees, and intermediaries with respect to our business or any businesses that we may acquire. Failure to comply with the FCPA, other anti-corruption laws and other laws governing the conduct of business with government entities (including local laws) could lead to criminal and civil penalties and other remedial measures (including further changes or enhancements to our policies, procedures, and controls, the imposition of a compliance monitor at our expense, potential personnel changes and/or disciplinary actions), any of which could have an adverse impact on our business, financial condition, results of operations, and liquidity. Investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities also could have an adverse impact on our business, financial condition, and results of operations.
Though we conduct business in many countries around the world, our sales of tobacco, consistent with the business of the leaf tobacco industry, are generally conducted in USD. Generally, we are required to purchase tobacco in foreign countries using local currency. As a result, local country operating costs, including the purchasing and processing costs for tobaccos, are subject to the effects of exchange fluctuations of the local currency against the USD. When the USD weakens against foreign currencies, our costs for purchasing and processing tobacco in such currencies increases. Although we operate in many foreign countries and are exposed to fluctuations in the currencies of numerous foreign countries, exchange fluctuation in the Brazilian Real against the USD has the greatest potential for impact on our financial results. We attempt to reduce such currency risks by matching the timing of our working capital borrowing needs against the tobacco purchasing and processing funds requirements in the currency of the country where the tobacco is grown. Fluctuations in the value of foreign currencies can significantly affect our operating results.
We rely on information technology systems, including systems hosted by third-party service providers. For example, our enterprise resource planning system and our domestic employee payroll system are hosted by external service providers. Although we have disaster recovery plans and intrusion preventive mitigating tools and services, our portfolio of hardware and software products, solutions and services and our enterprise IT systems, including those hosted by service providers, may be vulnerable to damage or disruption caused by circumstances beyond our control, such as catastrophic events, power outages, natural disasters, computer system, or network failures, computer viruses or other malicious software programs, and cyber-attacks, including system hacking and other cyber-security breaches. We may face more sophisticated cyber-security attacks as a result of the proliferation of generative artificial intelligence providing bad actors with advanced cyber-attack tools. The failure or disruption of our IT systems to perform as anticipated could disrupt our business and result in decreased performance, significant remediation costs, transaction errors, loss of data, processing inefficiencies, downtime, litigation, and the loss of suppliers or customers. A significant disruption or failure could have a material adverse effect on our business operations, financial performance, and financial condition.
We cannot assure you that material weaknesses in our internal control over financial reporting ("ICFR") will not be identified in the future.
Although we monitor our ICFR, and improve them as needed, we cannot assure you that material weaknesses will not occur in the future. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations or result in misstatements in our financial statements in amounts that could be material. Ineffective ICFR could cause investors to lose confidence in our reported financial information, which could have a negative effect on the value of our common stock and/or publicly traded debt and could also require additional restatements of our prior reported financial information. In addition, because we are not an "accelerated filer" under applicable SEC regulations, we are not required to obtain and present a report of our independent accounting firm with respect to the effectiveness of our ICFR and we have not obtained such a report with respect to an evaluation of our internal controls as of March 31, 2026. Accordingly, no such report is included in this Form 10-K.
We are subject to environmental, health, and safety laws and regulations in the jurisdictions where we operate. Such regulations govern, among other things, emissions of pollutants into the air, wastewater discharges, waste disposal, the investigation and remediation of soil and groundwater contamination, and the health and safety of our employees. For example, our products and the raw materials used in their production processes are subject to numerous environmental laws and regulations. We may be required to obtain environmental permits from governmental authorities for certain of its current or proposed operations. From time to time, we may not be in full compliance with such laws, regulations, and permits. If we violate or fail to comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators.
In addition, several governments have implemented or are considering implementing due diligence procedures to ensure strict compliance with environmental, labor, and government regulations. For example, the European Union enacted broad due diligence reporting requirements applicable to all industries operating within its Member States. Due to general uncertainty regarding the timing, content, and extent of any such regulatory changes, we cannot predict the impact, if any, that these changes could have to our business, financial condition, and results of operations.
Our joint venture manufactures and supplies e-liquid and consumable nicotine-related products, which inherently carry the risk of exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death, and the Company and our related joint venture could be affected by such actions through reputational impact or claims alleging that our supplied materials contributed to the alleged harm.
As a contract manufacturer of, and supplier of inputs for, products that are ingested or otherwise consumed by humans, our joint venture business faces the risk of exposure to product liability claims, regulatory action, and other litigation (including class proceedings and individual proceedings) if such products are alleged to have caused loss, injury, or death. E-liquids and other consumable nicotine product manufacturers and their suppliers may be subject to these types of claims, including that: (i) the products caused or contributed to injury, illness, or death; (ii) the manufacturer or supplier made false, misleading or impermissible statements regarding the products; (iii) the products lacked adequate labeling and instructions for use; and/or (iv) the products failed to include sufficient warnings concerning potential side effects or interactions with other substances.
Previously unknown adverse reactions resulting from human consumption of these e-liquids and other consumable nicotine products alone or in combination with other medications or substances could also occur. In addition, the manufacture and sale of any ingested or consumable product involves a risk of injury to consumers due to tampering by unauthorized third parties or product contamination, and our joint venture engaged in e-liquids and other consumable nicotine business may in the future have to recall certain of its manufactured products due to potential quality assurance concerns. Product liability claims or regulatory actions involving e-liquids and other consumable nicotine could increase costs and adversely affect our reputation and relationships with our customers and their consumers. We cannot assure you that product liability insurance held by the Company or our joint venture can be maintained on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could result in the Company or our joint venture becoming subject to significant liabilities that are uninsured.
The risk of class-based litigation (and individual litigation) for manufacturers and distributors of e-liquids and other consumable nicotine products, and others involved in the consumable nicotine industry, is significant, particularly in the face of increasing health and marketing concerns, the potential for product recalls, or other product-related issues. The U.S. has a highly active plaintiffs’ bar. Recent years have seen several purported class action lawsuits in the U.S. against manufacturers, distributors and suppliers of e-liquid and other consumable nicotine-related products. These circumstances create enhanced risk and exposure for the Company given the nature of its operations, the products it manufactures, distributes, and sells, and its business environment.
In addition, our joint venture’s customers operate in a highly regulated industry. Changes in federal, state, and local regulations applicable to e-liquids and other consumable nicotine products (e.g., nicotine content limits, prohibitions on sales of flavored products, imposition of or increases in the rates of excise taxes) could inhibit these customers’ ability to market products in certain jurisdictions or generally. Further, even under existing laws, these customers may not obtain required regulatory authorizations for some or all products manufactured by, or containing inputs supplied by, our joint venture. Should changes in regulations or regulatory actions inhibit our joint venture’s customers’ ability to market such products, the Company’s business, financial condition, and results of operations could in turn be adversely affected.
Two shareholders and their respective affiliates, Glendon Capital Management LP (together with its affiliates, the "Glendon Investor") and Monarch Alternative Capital LP (together with its affiliates, the "Monarch Investor;" the Glendon Investor and the Monarch Investor are together referred to as the "Significant Shareholders") beneficially own in the aggregate approximately 59% of our issued and outstanding common stock and, therefore, have significant control on the outcome of matters submitted to a vote of shareholders, including, but not limited to, electing directors and approving corporate transactions. Pursuant to the terms of a Shareholders Agreement dated as of August 24, 2020, as amended, among the Company and certain shareholders, including the Significant Shareholders, each of the Glendon Investor and the Monarch Investor has the right (depending on its continued ownership of a specified percentage of the outstanding shares of our common stock) to nominate up to two individuals for election as directors, and each of them and the other shareholders that are parties to the Shareholders Agreement have agreed to take the necessary action to elect such nominees as directors. Under our articles of incorporation, the affirmative vote of each of the Glendon Investor and the Monarch Investor, so long as it continues to maintain an Investor Percentage Interest (as defined in the Shareholders Agreement) of at least five percent, is required for the approval of any amendment to the articles of incorporation. It is our understanding that each of the Glendon Investor and the Monarch Investor holdholds a significant amount of our senior secured indebtedness. Circumstances may occur where the interests of the Significant Shareholders could conflict with the interests of other shareholders, and the Significant Shareholders could have substantial influence to cause us to take actions that align with their interests. Should conflicts arise, we can provide no assurance that the Significant Shareholders would act in the best interests of other shareholders or that any conflicts of interest would be resolved in a manner favorable to our other shareholders.
Reductions in demand for cigarettes and other consumer tobacco products could adversely affect our results of operations.
The tobacco industry continues to face several issues that may reduce the consumption of cigarettes and other consumer tobacco products, which could adversely affect our business, sales volume, results of operations, cash flows, and financial condition.
Management's Discussion & Analysis (MD&A)
Removed heading “Related Party Transactions”
Removed heading “Cash Paid for Income Taxes, net”
Largest changes
“During fiscal 2026, the global tobacco market transitioned from an undersupply position at the beginning of the fiscal year to an oversupply by its conclusion on March 31, 2026. Against this evolving market backdrop, which also included the introduction of new tariff regulations and the continuation of geopolitical conflicts, our consolidated results continued to include gross profit expansion and increased operating income when compared to the prior year. …”see in full comparison
The total borrowing capacity of our foreign seasonal lines of credit increased $147.2 million when compared to the prior year and were primarily utilized to purchase larger volumes of green tobacco. The amounts presented assee in full comparisonavailable undertheABL Credit Facility are subject to further limitations from thetotal borrowingbase consisting of certain eligible accounts receivablecapacity andinventory, reduced by specified reserves. The amounts presented asthe remaining amount available for borrowing under the foreign seasonal lines of credit are subject to limitations based on the level of receivables and inventories as collateral and by certain restrictivecovenants.covenants, including covenants under the ABL Credit Agreement and the agreements governing the Senior Secured Term Debt.
“Management periodically reviews actual demographic experience as it compares to the actuarial assumptions. Changes in assumptions are made if there are significant deviations or if future expectations change significantly. The Company terminated one of its defined benefit pension plans in the United Kingdom ("U.K. Pension Plan") during the year ended March 31, 2024.”see in full comparison
“Loss on pension settlement of $12.0 million for the year ended March 31, 2024, was due to the termination of an over-funded defined benefit pension plan in the U.K. See "Note 20. Pension and Other Postretirement Benefits" to the "Notes to Consolidated Financial Statements" for additional information.”see in full comparison
Full comparison: every changed paragraph (87)
Fiscal 2026 results were influenced by larger crops in several of our key operating origins, notably those in Africa and South America, a consistent factor throughout the fiscal year. Larger crops generally reduce the per-unit cost of procuring green tobacco and provide us with opportunities to source higher volumes from our global supplier base. Lower purchasing costs, together with increased processing volumes, contributed to current year cost efficiencies, including the dilution of conversion costs on a per-kilo basis.
During fiscal 2026, the global tobacco market transitioned from an undersupply position at the beginning of the fiscal year to an oversupply by its conclusion on March 31, 2026. Against this evolving market backdrop, which also included the introduction of new tariff regulations and the continuation of geopolitical conflicts, our consolidated results continued to include gross profit expansion and increased operating income when compared to the prior year. Our financial performance demonstrates our team's ability to adapt to changing, and sometimes challenging, market conditions, by leveraging our globally diversified footprint, supporting our suppliers, and working with our customers to ensure their requirements are met.
The Company enters fiscal year 2027 with a total of $786.7 million of tobacco inventories on hand, higher than the $732.2 million at the same time a year ago. The higher tobacco inventories are expected to result in more carry-over sales versus fiscal 2026. Crop purchases have commenced in our key sourcing origins within the Southern Hemisphere, and for the second consecutive year we are observing the production of large crops across most of these origins. We are taking a measured approach in our buying strategy to ensure we are procuring the volumes necessary to meet our customers' needs.
Sales and other operating revenues increased by 22.1% to $2,481.3 million for the year ended March 31, 2025 from $2,032.5 million for the year ended March 31, 2024. This growth was driven by a 18.0% increase in average price per kilo, which was influenced by short crops in certain markets, affecting overall industry supply, and by inflation on tobacco prices. Additionally, kilo volume increased by 3.4% due to growth in Africa and Asia and accelerated shipments from Africa and North America. These increases were partially offset by lower volume from South America compared to the prior-year period due to the impact of El Niño on crop sizes.
Gross profit for fiscal 2025 increased to $343.0 million compared to $312.3 million in the prior fiscal year. This growth was primarily due to a 3.4% increase in kilo volume and a 7.7% increase in average gross profit per kilo driven by favorable customer and product mix.
Undersupply conditions in the market continue, which is reflected in our low uncommitted inventory of $7.6 million as of March 31, 2025. Our total processed tobacco inventory level at fiscal year end was $490.4 million, down from $585.3 million a year ago. Despite the pressures to fund purchasing more expensive green tobacco in the year ended March 31, 2025, we continued to reduce our senior debt. During the 2025 fiscal year, we repaid or repurchased an aggregate of $64.9 million in aggregate principal amount of senior notes and term loans, which followed our repurchase in March 2024 of an aggregate of $77.9 million of senior notes.
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. The Company has one reportable segment for financial reporting purposes: Leaf. An All Other category is included for purposes of reconciliation of the results of the Leaf reportable segment to the consolidated results. See "Note 1.26. BasisSegment of Presentation and Summary of Significant Accounting PoliciesInformation" to the "Notes to the Consolidated Financial Statements" for additional information.
Sales and other operating revenues increased $448.8 million, or 22.1%, to $2,481.3 million for the year ended March 31, 2025 from $2,032.5 million for the year ended March 31, 2024. This increase was due to a 18.0% increase in average price per kilo driven by higher tobacco costs and a 3.4% increase in kilo volume from growth in Africa and Asia and accelerated shipments from Africa and North America, partially offset by lower volume from South America compared to the prior-year period from the El Niño weather effects reducing crop sizes.
Cost of goods and services sold increased $418.1 million, or 24.3%, to $2,138.3 million for the year ended March 31, 2025 from $1,720.2 million for the year ended March 31, 2024, driven by a 19.9% increase in average cost per kilo primarily due to undersupply conditions and inflation.
GrossSales profitand increasedother $30.7operating revenues decreased $68.3 million, or 9.8%,2.8%, to $343.0$2,413.0 million for the year ended March 31, 20252026 from $312.3$2,481.3 million for the year ended March 31, 2024,2025. mainlyThis duedecrease towas a 3.4%result increased kilo volume andof a 7.7%3.8% increasedecrease in average gross profitprice per kilokilo, primarily in Africa, with pricing reflective of the lower costs to $0.84purchase asthe compared to $0.78crop in the prior-yearcurrent periodfiscal year, and lower leaf product revenues driven by favorablea customerdecline in value-added tobacco products sales volumes. The decrease in leaf product revenues was partially offset by volume growth in processing and productother mix.revenues mainly from Africa and North America.
Cost of goods and services sold decreased $73.0 million, or 3.4%, to $2,065.3 million for the year ended March 31, 2026 from $2,138.3 million for the year ended March 31, 2025, corresponding to the reduction in sales and other operating revenues, principally driven by lower costs incurred to purchase and process the current crop.
Gross profit increased $4.7 million, or 1.4%, to $347.7 million for the year ended March 31, 2026 from $343.0 million for the year ended March 31, 2025, mainly attributable to increased leaf product sales volumes in South America and higher volumes from processing and other revenues in Africa and North America. The larger processing and other revenues contributed to the improvement in gross profit as a percent of sales to 14.4%, compared to 13.8% in the prior fiscal year.
Selling, general, and administrative expenses as a percent of sales decreased to 6.9% for the year ended March 31, 2025 from 7.9% for the year ended March 31, 2024. Selling, general, and administrative expenses increased $10.1 million, or 6.3%, to $171.0 million for the year ended March 31, 2025 from $160.9 million for the year ended March 31, 2024, primarily due to higher personnel costs, including the recognition of $4.1 million for non-cash equity-based compensation pursuant to the Amended and Restated 2020 Incentive Plan and a higher accrual for variable bonus compensation. See "Note 24. Equity-Based Compensation" to the "Notes to Consolidated Financial Statements" for additional information.
Other expense, net increased $7.0 million, or 74.5%, to $16.4 million for the year ended March 31, 2025 from $9.4 million for the year ended March 31, 2024 mostly due to increased utilization of the Company's securitization facilities.
Loss on pension settlement of $12.0 million for the year ended March 31, 2024, was due to the termination of an over-funded defined benefit pension plan in the U.K. See "Note 20. Pension and Other Postretirement Benefits" to the "Notes to Consolidated Financial Statements" for additional information.
Gain on debt retirement of $8.2 million for the year ended March 31, 2025 was due to the repurchase of $10.3 million of aggregate principal amount of the Pyxus Term Loans for $9.1 million, a 12.0% discount to par, and the repurchase of $34.2 million aggregate principal amount of the 2027 Notes for $26.3 million, a 23.0% discount to par. Gain on debt retirement of $15.9 million for the year ended March 31, 2024 was due to the repurchase of $77.9 million aggregate principal amount of the 2027 Notes for $60.0 million, a 23.0% discount to par. See "Note 15. Debt Arrangements" to the "Notes to Consolidated Financial Statements" for additional information.
IncomeSelling, fromgeneral, unconsolidatedand affiliates,administrative netexpenses decreased $6.9$8.1 million, or 46.0%,4.7%, to $8.1$162.9 million for the year ended March 31, 20252026 from $15.0$171.0 million for the year ended March 31, 2024,2025, dueprimarily principallydriven toby a lower volumeaccrual for variable incentive compensation and averageless grossequity-based margincompensation perexpense kilo from South America compareddue to the prior-yearnon-recurrence periodof frommodifications to restricted stock awards effected in the Elprior Niñofiscal weatheryear, effectspartially reducingoffset cropby sizes.increased personnel costs.
Gain on debt retirement of $8.2 million for the year ended March 31, 2025 was due to the repurchase of $10.3 million of aggregate principal amount of the Pyxus Term Loans for $9.1 million, a 12.0% discount to par, and the repurchase of $34.2 million aggregate principal amount of the 2027 Notes for $26.3 million, a 23.0% discount to par. There were no repurchases of senior secured notes or term loans during the year ended March 31, 2026. See "Note 25. Related Party Transactions" to the "Notes to Consolidated Financial Statements" for additional information.
Interest expense, net increased $6.4 million, or 5.0%, to $134.4 million for the year ended March 31, 2026 from $128.0 million for the year ended March 31, 2025 due to higher average balances outstanding on our foreign seasonal lines of credit primarily in Africa and South America, partially offset by a decrease in weighted average interest rates on our foreign seasonal lines of credit and senior secured term loans.
Income tax expense increased $5.2 million, or 20.7%, to $30.3 million for the year ended March 31, 2026 from $25.1 million for the year ended March 31, 2025 mainly due to the partial release of the valuation allowance applied against certain U.S. deferred tax assets in the prior fiscal year.
Income from unconsolidated affiliates, net increased $9.3 million, or 114.8%, to $17.4 million for the year ended March 31, 2026 from $8.1 million for the year ended March 31, 2025. This increase was primarily due to higher profitability generated at our equity method investment in South America as a result of lower purchasing costs for the current crop that was sold during the current fiscal year. Also contributing to the increase was higher net income from one of our Asian equity method investments due to larger crop volumes sold, as well as a gain on the sale of certain fixed assets and from the receipt of insurance recoveries following severe flooding that impacted operations in the prior year.
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 (defined below),Facility, and cash collections from our securitized receivables. Our liquidity requirements are affected by various factors from our core 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 threetwo quarters of our fiscal year generally represent the peak of our working capital requirements.
OurThe 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,Agent (the "ABL Agent"), which was subsequently amended on January 5, 2023, May 23, 2023 and2023, October 24, 2023.2023, Referand toMay "Note12, 27. Subsequent Events" to the "Notes to Consolidated Financial Statements" for additional information regarding the Fourth Amendment to the ABL Credit Facility.2025.
The ABL Credit Agreement establishes the ABL Credit Facility, an asset-based revolving credit facility (the "ABL Credit Facility"), the proceeds of which may be used to provide for the ongoing working capital and general corporate purposes of the Borrowers, the Company, Pyxus Parent, and their subsidiaries.subsidiaries, and for other permitted purposes described in the ABL Credit Agreement. 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 $120.0$150.0 million, subject to the borrowing base limitations described below in this paragraph. The ABL Credit Facility includes a $20.0 million 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 $140.0$170.0 million. The amount available under the ABL Credit Facility is limited by a borrowing base consisting of certain eligible accounts receivable and the value of inventory, as reduced by specified reserves, as follows:
•85% of the book value of eligible accounts receivable, plus
•90% of eligible credit insured accounts receivable,receivable (to the extent the ABL Agent is named as a beneficiary or loss payee with respect to the applicable policy), plus
•the lesser of (i) 70% of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85% of the net-orderly-liquidation value percentage of eligible inventory, minusplus
•the least of (i) 70% of the eligible foreign in-transit inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits), (ii) 85% of the net-orderly-liquidation value percentage of eligible foreign in-transit inventory, and (iii) $10.0 million, minus
•applicable reserves established by the ABL Agent from time to time.
•applicable reserves.
The ABL Credit Facility permits both base rate borrowings and borrowings based upon the Secured Overnight Financing Rate ("SOFR"). Borrowings under the ABL Credit Facility bear interest at an annual rate equal to one, three, or six-month reserve-adjusted SOFR Rate plus 300275 basis points or 200175 basis points above base rate, as applicable, with a fee on unutilized commitments at an annual rate of 25.0 basis points if the outstanding borrowings equal or exceed $60.0 million and 37.5 basis points if the outstanding borrowings are less than $60.0 million.points.
As of March 31, 2025, there are no amounts outstanding under the ABL Credit Facility.
The ABL Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or premium, subject to a termination fee upon the permanent reduction of some or all of the commitments under the ABL Credit Facility of 300 basis points for terminations in the firstamount yearof (i) 2% of the amount of commitments permanently reduced on or prior to May 12, 2026 and (ii) 1% of the amount of commitments permanently reduced on or prior to May 12, 2027 but after entryMay into12, the2026. ABLNo Creditsuch Agreement,termination 200fee basisis pointspayable for terminationsreductions inafter theMay second12, year and 100 basis points for termination in the third year.2027. In addition, customary mandatory prepayments of the loans under the ABL Credit Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base, certain dispositions of assets outside of the ordinary course of business in respect of certain collateral securing the ABL Credit Facility and certain casualty and condemnation events. With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to SOFR loans, accrued interest is payable monthly and on the last day of any applicable interest period.
Cash Dominion. Under the terms of the ABL Credit Facility, if (i) an event of default has occurred and is continuing, (ii) excess borrowing availability under the ABL Credit Facility (based on the lesser of the commitments thereunder and the borrowing base) (the "Excess Availability") falls below the greater of $10.0$12.5 million orand 10% of the lesser of total revolving loan commitments under the ABL Credit Facility at such time and the borrowing base at such time, or (iii) Domestic Availability (as defined in the ABL Credit Agreement) being less than the greater of $20.0$25.0 million orand 20% of the lesser of total revolving loan commitments under the ABL Credit Facility at such time and the borrowing base at such time, the ABL Loan Parties will become subject to cash dominion, which will require daily prepayment of loans under the ABL Credit Facility with the cash deposited in certain deposit accounts of the ABL Loan Parties, including concentration accounts, and will restrict the ABL Loan Parties’ ability to transfer cash from their concentration accounts to their disbursement accounts. Such cash dominion period (a "Dominion Period") shall end when (i) if arising as a result of a continuing event of default, such event of default ceases to exist, (ii) if arising as a result of non-compliance with the Excess Availability threshold, no event of default is continuing and, for a period of 30 consecutive days, Excess Availability is equal to or greater than the greater of $10.0$12.5 million orand 10% of the lesser of total revolving loan commitments under the ABL Credit Facility and the borrowing base, or (iii) if arising as a result of Domestic Availability being less than the threshold, no event of default is continuing and, for a period of 30 consecutive days, Domestic Availability is greater than $20.0$25.0 million orand 20% of the lesser of total revolving loan commitments under the ABL Credit Facility and the borrowing base.
Covenants. The ABL Credit Agreement governing the ABL Credit Facility contains (i) a springing covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any Dominion Period and (ii) a covenant requiring Domestic Availability greater than $20.0 million at all times until audited financial statements for fiscal year ending March 31, 2023 are delivered under the ABL Credit Agreement.Period.
•enter into transactions with affiliates, and
•engage directly or indirectly in any business other than the businesses engaged in by the Company,
•directly or indirectly open, maintain or otherwise have accounts other than permitted accounts under the ABL Credit Agreement, and
On March 31, 2025, the Borrowers were in compliance with the covenants under the ABL Credit Agreement. See "Note 15. Debt Arrangements" to the "Notes to Consolidated Financial Statements" for additional information.
On May 12, 2025, the ABL Credit Agreement was amended to, among other things:
•increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility by $30.0 million from $120.0 million to $150.0 million,
•reduce the margin for the interest rate by 0.25% per annum from 3.00% to 2.75% and eliminate the SOFR adjustment charge,
•reduce the commitment fee for the unused amounts of the ABL Credit Facility to 0.25%, and
•extendMaturity. theThe maturityABL toCredit Facility matures on May 12, 2030 or, if earlier, 90 days prior to the earliest stated maturity date of (i) the outstandingCompany's existing senior secured notes and the senior secured term loans (each currently scheduled to mature on December 31, 2027) in the event any such notes or loans remain outstanding or (ii) any indebtedness that refinances any of the foregoing.
On March 31, 2026, the Borrowers were in compliance with the covenants under the ABL Credit Agreement. See "Note 16. Debt Arrangements" to the "Notes to Consolidated Financial Statements" for additional information.
Pursuant to the Exit Facility Exchange, on February 6, 2023, Pyxus Holdings entered into the Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent, to establish a term loan credit facility in an aggregate principal amount of approximately $130.6 million (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans" and, together with the Intabex Term Loans, the "NewSenior Secured Term Loans") were deemed made in exchange for 60.0% of the outstanding principal amount of Exit Term Loans (including the applicable accrued and unpaid PIK interest thereon).
Pursuant to an exchange offer (the "Notes Exchange" and, together with the DDTL Facility Exchange and the Exit Facility Exchange, the "Debt Exchange Transactions") 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 $260.5 million in aggregate principal amount of 8.5% Senior Secured Notes due December 31, 2027 (the "2027 Notes" and, together with the NewSenior Secured Term Loans, the "NewSenior Secured Term Debt") 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 obligations of Pyxus Holdings under the ABL Credit Agreement and the NewSenior Secured Term Debt are fully and unconditionally guaranteed by the Company, Pyxus Parent and all of the Company’s domestic subsidiaries and certain of the Company’s foreign subsidiaries, subject to certain limitations (the "Senior Secured Debt Obligors"). In addition, under the Intabex Term Loan Credit Facility, Intabex and Alliance One International Tabak B.V. (which were obligors under the DDTL Term Loans) also guarantee the Intabex Credit Facility (together, the "Specified Intabex Obligors") but do not guarantee the 2027 Notes, the Pyxus Term Loans or obligations under the ABL Credit Agreement. In addition, certain assets of the Specified Intabex Obligors (which were pledged as collateral for the DDTL Term Loans) are pledged as collateral to secure the Intabex Term Loans (the "Intabex Collateral") but do not secure the 2027 Notes, the Pyxus Term Loans, or obligations under the ABL Credit Agreement. On March 27, 2024, Alliance One International Tabak B.V. was merged with and into Intabex.
The Senior Secured Debt Obligors’ obligations under the ABL Credit Agreement are secured by (i) a first-priority senior lien the ABL Priority Collateral (as defined in the ABL/NewSenior Secured Term Debt Intercreditor Agreement (as defined below)), which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets and proceeds of the foregoing of the Senior Secured Debt Obligors, and (ii) a junior-priority lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral. The NewSenior Secured Term Debt is secured by (i) a first-priority senior lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral and (ii) a junior-priority lien on the ABL Priority Collateral. The Intabex Term Loans are further secured by a first-priority lien on the Intabex Collateral.
The obligations under the NewSenior Secured Term Debt share a single lien, held by Alter Domus, as senior collateral agent (the "Senior Collateral Agent"), on the Collateral (as defined below) subject to the payment waterfall pursuant to the intercreditor arrangements described below. See "Note 15.16. Debt Arrangements" to the "Notes to Consolidated Financial Statements" for additional information.
The priority of the obligations under the ABL Credit Agreement and the NewSenior Secured Term Debt are set forth in the two intercreditor agreements entered into in connection with consummation of the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange.
ABL/NewSenior Secured Term Debt Intercreditor Agreement. On February 6, 2023, Pyxus Holdings, Inc., the guarantors party thereto, PNC Bank, National Association, as ABL Agent, Alter Domus, as Pyxus Term Loan Administrative Agent, Intabex Term Loan Administrative Agent and Senior Collateral Agent, and Wilmington Trust, National Association, as Senior Notes Trustee entered into an Amended and Restated ABL Intercreditor Agreement, dated as of February 6, 2023 (the "ABL/NewSenior Secured Term Debt Intercreditor Agreement") to provide for the intercreditor relationship between, (i) on one hand, the holders of obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations and (ii) on the other hand, the holders of obligations under the NewSenior Secured Term Debt, the guarantees thereof and certain related obligations. Pursuant to the terms of the ABL/Term Loan/Notes Intercreditor Agreement, Pyxus Holdings’ obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations have first-priority senior liens on the ABL Priority Collateral, which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets of the foregoing entities and proceeds of the foregoing, with the obligations under the NewSenior Secured Term Debt having junior-priority liens on the ABL Priority Collateral. Pursuant to the ABL/NewSenior Secured Term Debt Intercreditor Agreement, Pyxus Holdings’ collective obligations under the NewSenior Secured Term Debt, the guarantees thereof and certain related obligations have first-priority senior liens on the collateral that is not ABL Priority Collateral, including owned material real property in the U.S., capital stock of subsidiaries owned directly by Pyxus Holdings or a guarantor (other than the Intabex Collateral), existing and after acquired intellectual property rights, equipment, related general intangibles and instruments and certain other assets related to the foregoing and proceeds of the foregoing, with the obligations under the ABL Credit Facility having junior-priority liens on such collateral, other than real property. The ABL Credit Facility is not secured by real property.
Secured Debt Intercreditor Agreement. On February 6, 2023, the NewSenior Secured Debt Obligors, together with the representative for the holders of the NewSenior Secured Term Debt and the Senior Collateral Agent, entered into the Intercreditor and Collateral Agency Agreement, dated as of February 6, 2023 (the "NewSenior Secured Term Debt Intercreditor Agreement"), pursuant to which the Senior Collateral Agent, serves as joint collateral agent for the benefit of the holders of the 2027 Notes, the Pyxus Term Loans and the Intabex Term Loans with respect to all common collateral securing such indebtedness (the "CollateralCollateral,"; which excludes Intabex Collateral). The NewSenior Secured Term Debt Intercreditor Agreement provides that Collateral or proceeds thereof received in connection with or upon the exercise of secured creditor remedies will be distributed (subject to the provisions described in the next paragraph) first to holders of the NewSenior Secured Term Debt on a pro rata basis based on the aggregate principal amount of each class of NewSenior Secured Term Debt, and then to holders of future junior debt secured by such Collateral on a pro rata basis based on the aggregate principal amount of each class of future junior debt (and in each case permitted refinancing indebtedness thereof).
Exercise of rights and remedies against the Collateral and certain rights in a bankruptcy or insolvency proceeding (including the right to object to debtor-in-possession financing or to credit bid) by the Senior Collateral Agent will be controlled first by the holders of a majority in principal amount of the NewSenior Secured Term Loans (including, in any event, each holder holding at least 20.0% of the NewSenior Secured Term Loans as of February 6, 2023, provided such holder holds at least 15.0% of the NewSenior Secured Term Loans as of the date of determination), second, after repayment in full of the NewSenior Secured Term Loans, by the holders of a majority in principal amount of the 2027 Notes and last, after repayment in full of the NewSenior Secured Term Loans and the 2027 Notes, by holders of a majority in principal amount of any future junior debt secured by the Collateral. Any such future junior debt will be subject to certain customary waivers of rights in a bankruptcy or insolvency proceeding in favor of the Senior Collateral Agent, including, but not limited to, with respect to debtor-in-possession financing, adequate protection, and credit bidding. See "Note 15.16. Debt Arrangements" to the "Notes to Consolidated Financial Statements" for additional information.
2024 Notes
The 2024 Notes bore interest at a rate of 10.0% per year, payable semi-annually in arrears in cash on February 15 and August 15 of each year. On August 26, 2024, upon maturity of the 2024 Notes, Pyxus Holdings paid $20.4 million, which included less than $0.1 million for accrued and unpaid interest, to retire the 2024 Notes.
Related Party Transactions
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 million shares of the Company’s common stock, representing approximately 24.5% of the then outstanding shares of the Company’s common stock. An individual designated by the Monarch Investor serves as a director of Pyxus.
On March 21, 2024, Pyxus Holdings entered into an agreement (the "Debt Repurchase Agreement") with funds affiliated with the Monarch Investor to purchase $77.9 million of aggregate principal amount of their holdings in the 2027 Notes for $60.0 million, a 23.0% discount to par value, plus accrued and unpaid interest and specified customary fees. The purchase of $77.9 million aggregate principal amount of the 2027 Notes for a total of $62.3 million (including fees and accrued and unpaid interest) was completed on March 28, 2024.
The Debt Repurchase Agreement also included the right of Pyxus Holdings, at its option, to purchase from such holders an additional $34.2 million aggregate principal amount of the 2027 Notes for $26.3 million, a 23.0% discount to par value, plus accrued and unpaid interest, and $10.3 million aggregate principal amount of the Pyxus Term Loans for $9.1 million, a 12.0% discount to par value, plus accrued and unpaid interest. On April 12, 2024, Pyxus Holdings exercised its right to complete these repurchases by September 30, 2024.
What changed in the latest 10-Q
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.
Removed heading “Our joint ventures manufacture and supply e-liquid and consumable nicotine-related products, which inherently carry the risk of exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death, and the Company and our related joint ventures could be affected by such actions through reputational impact or claims alleging that our supplied materials contributed to the alleged harm.”
Largest changes
“The risk of class-based litigation (and individual litigation) for manufacturers and distributors of e-liquids and other consumable nicotine products, and others involved in the consumable nicotine industry, is significant, particularly in the face of increasing health and marketing concerns, the potential for product recalls, or other product-related issues. The U.S. has a highly active plaintiffs’ bar. Recent years have seen several purported class action lawsuits in the U.S. against manufacturers, distributors and suppliers of e-liquid and other consumable nicotine-related products. …”see in full comparison
“Our joint ventures manufacture and supply e-liquid and consumable nicotine-related products, which inherently carry the risk of exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death, and the Company and our related joint ventures could be affected by such actions through reputational impact or claims alleging that our supplied materials contributed to the alleged harm.”see in full comparison
“Previously unknown adverse reactions resulting from human consumption of these e-liquids and other consumable nicotine products alone or in combination with other medications or substances could also occur. In addition, the manufacture and sale of any ingested or consumable product involves a risk of injury to consumers due to tampering by unauthorized third parties or product contamination, and our joint ventures engaged in e-liquids and other consumable nicotine business may in the future have to recall certain of its manufactured products due to potential quality assurance concerns. …”see in full comparison
“As a contract manufacturer of, and supplier of inputs for, products that are ingested or otherwise consumed by humans, our joint ventures business faces the risk of exposure to product liability claims, regulatory action, and other litigation (including class proceedings and individual proceedings) if such products are alleged to have caused loss, injury, or death. …”see in full comparison
Full comparison: every changed paragraph (5)
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. Except as set forth below, asAs 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, 2025.2026.
Our joint ventures manufacture and supply e-liquid and consumable nicotine-related products, which inherently carry the risk of exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death, and the Company and our related joint ventures could be affected by such actions through reputational impact or claims alleging that our supplied materials contributed to the alleged harm.
As a contract manufacturer of, and supplier of inputs for, products that are ingested or otherwise consumed by humans, our joint ventures business faces the risk of exposure to product liability claims, regulatory action, and other litigation (including class proceedings and individual proceedings) if such products are alleged to have caused loss, injury, or death. E-liquids and other consumable nicotine product manufacturers and their suppliers may be subject to these types of claims, including that: (i) the products caused or contributed to injury, illness, or death; (ii) the manufacturer or supplier made false, misleading or impermissible statements regarding the products; (iii) the products lacked adequate labeling and instructions for use; and/or (iv) the products failed to include sufficient warnings concerning potential side effects or interactions with other substances.
Previously unknown adverse reactions resulting from human consumption of these e-liquids and other consumable nicotine products alone or in combination with other medications or substances could also occur. In addition, the manufacture and sale of any ingested or consumable product involves a risk of injury to consumers due to tampering by unauthorized third parties or product contamination, and our joint ventures engaged in e-liquids and other consumable nicotine business may in the future have to recall certain of its manufactured products due to potential quality assurance concerns. Product liability claims or regulatory actions involving e-liquids and other consumable nicotine could increase costs and adversely affect our reputation and relationships with our customers and their consumers. We cannot assure you that product liability insurance held by the Company or our joint ventures can be maintained on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could result in the Company or our joint ventures becoming subject to significant liabilities that are uninsured.
The risk of class-based litigation (and individual litigation) for manufacturers and distributors of e-liquids and other consumable nicotine products, and others involved in the consumable nicotine industry, is significant, particularly in the face of increasing health and marketing concerns, the potential for product recalls, or other product-related issues. The U.S. has a highly active plaintiffs’ bar. Recent years have seen several purported class action lawsuits in the U.S. against manufacturers, distributors and suppliers of e-liquid and other consumable nicotine-related products. These circumstances create enhanced risk and exposure for the Company given the nature of its operations, the products it manufactures, distributes, and sells, and its business environment.
Management's Discussion & Analysis (MD&A)
New heading “Weather Patterns and Crop Conditions”
Largest changes
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,see in full comparison2025,2026, 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 impositionofof, and changes to, tariffs and other changes in international trade policies; shifts in the global supply and demand position for tobacco products; 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;international business risks, including unsettled political conditions, uncertainty intheenforcementimpact oflegalincreasedobligations, including the collection of accounts receivable, fraud risks, expropriation, import and export restrictions, exchange controls, inflationary economies, currency risks and risks related to the restrictions on repatriation of earnings or proceeds from liquidated assets of foreign subsidiaries; many of our operations are located in jurisdictions that pose a high risk of potential violations of the Foreign Corrupt Practices Act; risks and uncertainties related to geopolitical conflicts, including the conflicts in the Middle East and disruptions affecting shipping in that area; impacts of international sanctionscompetition on ourability to sell or source tobacco in certain regions; 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; competition with the other primary global independent leaf tobacco merchant and independent leaf merchants; disruption, failure or security breaches of our information technology systems and other cybersecurity risksearnings; continued high inflation;regulationsthatregardingmayenvironmentaladverselymattersaffect 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 locallevel;level, our ability to continue to access capital markets to obtain long-term and short-termfinancingfinancing, 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 interestratesrates, 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;the volatility and disruption of global credit markets;failure by counterparties to derivative transactions to perform their obligations;increasinginternationalscrutinybusiness risks, including unsettled political conditions, uncertainty in the enforcement of legal obligations, including the collection of accounts receivable, fraud risks, expropriation, import andchangingexportexpectationsrestrictions, exchange controls, inflationary economies, currency risks, risks related to the restrictions on repatriation of earnings or proceeds fromgovernments,liquidatedasassetswellofasforeignother stakeholders such as investorssubsidiaries andcustomers,impactswithofrespectinternational 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 ourenvironmental,operationssocialinandjurisdictionsgovernancethatpolicies,poseincludingasustainability policies; inherenthigh 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, regulatoryactionaction, and litigationifinourthe event such products are alleged to have causedsignificantinjury,loss, 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; risks and uncertainties related to pandemics or other widespread health crises and any related shipping constraints, labor shortages and supply-chain impacts; 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 intothe Company'sour business activities,includingincluding, but not limited to, leaf tobacco industry buying and other paymentpractices; and impact of proposed regulations to prohibit the sale of cigarettes and certain other tobacco products in the United States other than low-nicotine versions of those products.practices.
“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. …”see in full comparison
“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. …”see in full comparison
“The Company's third quarter results and working capital continue to reflect the impact of larger crops, a trend that has persisted throughout fiscal year 2026. Operational and financial performance remains aligned with expectations, and after our successful buying season, the Company continues to support customers by ensuring their leaf requirements are met. The larger crop environment across many of our operating origins, together with various timing-related accelerations and deferrals of shipments, resulted in lower leaf product sales volumes. …”see in full comparison
“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. …”see in full comparison
Full comparison: every changed paragraph (36)
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, 2025,2026, 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 ofof, and changes to, tariffs and other changes in international trade policies; shifts in the global supply and demand position for tobacco products; 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; international business risks, including unsettled political conditions, uncertainty in the enforcementimpact of legalincreased obligations, including the collection of accounts receivable, fraud risks, expropriation, import and export restrictions, exchange controls, inflationary economies, currency risks and risks related to the restrictions on repatriation of earnings or proceeds from liquidated assets of foreign subsidiaries; many of our operations are located in jurisdictions that pose a high risk of potential violations of the Foreign Corrupt Practices Act; risks and uncertainties related to geopolitical conflicts, including the conflicts in the Middle East and disruptions affecting shipping in that area; impacts of international sanctionscompetition on our ability to sell or source tobacco in certain regions; 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; competition with the other primary global independent leaf tobacco merchant and independent leaf merchants; disruption, failure or security breaches of our information technology systems and other cybersecurity risksearnings; continued high inflation; regulationsthat regardingmay environmentaladversely mattersaffect 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;level, our ability to continue to access capital markets to obtain long-term and short-term financingfinancing, 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 ratesrates, 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; the volatility and disruption of global credit markets; failure by counterparties to derivative transactions to perform their obligations; increasinginternational scrutinybusiness risks, including unsettled political conditions, uncertainty in the enforcement of legal obligations, including the collection of accounts receivable, fraud risks, expropriation, import and changingexport expectationsrestrictions, exchange controls, inflationary economies, currency risks, risks related to the restrictions on repatriation of earnings or proceeds from governments,liquidated asassets wellof asforeign other stakeholders such as investorssubsidiaries and customers,impacts withof respectinternational 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 environmental,operations socialin andjurisdictions governancethat policies,pose includinga sustainability policies; inherenthigh 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 actionaction, and litigation ifin ourthe event such products are alleged to have caused significantinjury, loss, 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; risks and uncertainties related to pandemics or other widespread health crises and any related shipping constraints, labor shortages and supply-chain impacts; 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 the Company'sour business activities, includingincluding, but not limited to, leaf tobacco industry buying and other payment practices; and impact of proposed regulations to prohibit the sale of cigarettes and certain other tobacco products in the United States other than low-nicotine versions of those products.practices.
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.
The Company's third quarter results and working capital continue to reflect the impact of larger crops, a trend that has persisted throughout fiscal year 2026. Operational and financial performance remains aligned with expectations, and after our successful buying season, the Company continues to support customers by ensuring their leaf requirements are met. The larger crop environment across many of our operating origins, together with various timing-related accelerations and deferrals of shipments, resulted in lower leaf product sales volumes. This decline was partially offset by strong volume growth in processing and other revenues, which favorably impacted gross margin as a percent of sales. Larger crops led to improved performance in the Company's equity method investments, particularly in South America and Asia, resulting in higher income from unconsolidated affiliates in both the quarterly and year-to-date periods.
Quarterly results were affected by lower average selling prices in leaf product revenues, along with volume-related declines due to shifts in shipment timing. Sales and other operating revenues were $655.8 million for the three months ended December 31, 2025, compared to $778.3 million for the three months ended December 31, 2024, representing a decrease of 15.7%, or $122.5 million. Despite the decrease in sales and other operating revenues, gross margin as a percent of sales for the quarterly period increased slightly from 15.0% for the prior-year period to 15.2%, due to favorable product mix.
Year-to-date sales and other operating revenues reflect the timing of shipments, including the continued impact of lower carry-over sales from the prior fiscal year. These factors affected leaf product revenues and contributed to a 12.4%, or $244.7 million, decrease in sales to $1,734.8 million for the nine months ended December 31, 2025 from $1,979.5 million for the nine months ended December 31, 2024. Larger crop volumes for processing and other revenues partially mitigated the decline in leaf product revenues and contributed to an improvement in gross margin as a percent of sales to 14.6%, compared to 13.9% in the prior year.
Current crop tobacco purchases were principally completed by the end of the third quarter. During the second half of the fiscal year, the Company's operations are primarily focused on processing remaining current crop volumes and fulfilling customer shipments of processed tobacco. Consistent with trends from the first and second quarters of fiscal year 2026, our total tobacco inventory at the end of the third quarter remained elevated, representative of the larger crop volumes from Africa and South America. As of December 31, 2025, total processed and unprocessed tobacco inventories were $959.8 million. This higher inventory position will support ongoing customer demand and is anticipated to contribute to seasonally higher shipment activity in the remainder of the fiscal year.
Sales and other operating revenues decreased $122.5$71.0 million, or 15.7%,14.0%, to $655.8$437.8 million for the three months ended DecemberJune 31,30, 20252026 from $778.3$508.8 million for the three months ended DecemberJune 31,30, 2024.2025. This decrease was adue resultto the impact of lower average sales prices primarily for leaf productproducts revenuesin dueSouth toAmerica and Africa, and a decline in volumes sold mainly driven by the timing of customershipments 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 Africathe andprior Europe,year asoccurred wellduring asthe afirst lower average price per kilo primarily in South America, with pricing reflectivequarter of thefiscal loweryear costs to purchase the current crop.2026.
Cost of goods and services sold decreased $106.0$66.8 million, or 16.0%,15.1%, to $555.9$376.4 million for the three months ended DecemberJune 31,30, 20252026 from $661.9$443.2 million for the three months ended DecemberJune 31,30, 2024,2025, corresponding to the reduction in sales and other operating revenues, as well as thelower lowerpurchasing costs incurredfor to purchase the current crop.tobacco.
Gross profit decreased $16.6$4.2 million, or 14.2%,6.4%, to $99.9$61.4 million for the three months ended DecemberJune 31,30, 20252026 from $116.5$65.6 million for the three months ended DecemberJune 31,30, 2024.2025. This decrease was mainly due to the timing of certainshipments leafin productNorth revenuesAmerica and thecustomer declinemix in Africa, partially offset by improved pricing in Europe. These same factors led to a slight reduction in average gross profit per kilo. Averageleaf gross profit per kilo wasof lower by $0.11, or 12.1%, to $0.80$0.84 for the three months ended DecemberJune 31,30, 20252026 fromcompared $0.91to average leaf gross profit per kilo of $0.86 for the three months ended DecemberJune 31,30, 2024, which was impacted unfavorably by lower average sales prices due to product mix and customer mix.2025.
Selling, general, and administrative expenses decreased $8.2 million, or 17.6%, to $38.3 million for the three months ended December 31, 2025 from $46.5 million for the three months ended December 31, 2024. This decrease was primarily due to a lower accrual for variable incentive compensation.
Other expense, net increased $5.0 million, or 131.6%, to $8.8 million for the three months ended December 31, 2025 from $3.8 million for the three months ended December 31, 2024. This increase was primarily due to the resolution of a discrete customs dispute in the current-year period.
Income tax (benefit) expense decreased $7.8$10.9 million, or 43.1%,209.6%, to $10.3a benefit of $5.7 million for the three months ended DecemberJune 31,30, 20252026 from $18.1an expense of $5.2 million for the three months ended DecemberJune 31,30, 2024.2025. This decrease was primarily attributable to reduced unfavorablefavorable foreign currency impacts recognized in income tax expense during the current-year period.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.
Income from unconsolidated affiliates, net increased $8.1 million, or 188.4%, to $12.4 million for the three months ended December 31, 2025 from $4.3 million for the three months ended December 31, 2024. This increase was mainly due to higher profitability in South America as a result of lower purchasing costs for the current crop that was sold during the period.
Sales and other operating revenues decreased $244.7 million, or 12.4%, to $1,734.8 million for the nine months ended December 31, 2025 from $1,979.5 million for the nine months ended December 31, 2024, largely due to the 10.4% decline in kilo volumes sold as a result of the timing of certain leaf product customer shipments, including the continued impact of lower carry-over sales from accelerated shipments in Africa and North America during the fourth quarter of fiscal year 2025.
Cost of goods and services sold decreased $222.3 million, or 13.0%, to $1,481.5 million for the nine months ended December 31, 2025 from $1,703.8 million for the nine months ended December 31, 2024. This decrease is mainly due to the reduction in sales and other operating revenues.
Gross profit decreased $22.5 million, or 8.2%, to $253.3 million for the nine months ended December 31, 2025 from $275.8 million for the nine months ended December 31, 2024, due to the decline in leaf product revenues, partially offset by increased gross profit in processing and other revenues primarily from larger crops in Africa. Average gross profit per kilo was lower by $0.04, or 4.7%, to $0.81 for the nine months ended December 31, 2025 from $0.85 for the nine months ended December 31, 2024, mainly due to product mix. Despite these declines, the larger crop sales for processing and other revenues contributed to an improvement in gross profit as a percent of sales to 14.6%, compared to 13.9% in the prior year.
Selling, general, and administrative expenses decreased $7.2 million, or 5.7%, to $118.8 million for the nine months ended December 31, 2025 from $126.0 million for the nine months ended December 31, 2024. The decrease was driven by a lower accrual for variable incentive compensation and less equity-based compensation expense due to the non-recurrence of modified restricted stock awards, partially offset by increased personnel costs.
Other expense, net increased $4.2 million, or 43.3%, to $13.9 million for the nine months ended December 31, 2025 from $9.7 million for the nine months ended December 31, 2024. This increase was due to the resolution of a discrete customs dispute in the current period, along with an unfavorable impact from foreign currency fluctuations. These higher expenses were partially offset by lower utilization of the Company's securitization facilities.
The gain on debt retirement of $8.2 million for the nine months ended December 31, 2024 was due to the repurchase of $10.3 million of aggregate principal amount of the Pyxus Term Loans for $9.4 million, a 12.0% discount to par, and the repurchase of $34.2 million aggregate principal amount of the 2027 Notes for $26.3 million, a 23.0% discount to par. There were no repurchases of senior secured notes or term loans during the nine months ended December 31, 2025. See "Note 18. Related Party Transactions" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
Income tax expense decreased $6.5 million, or 20.1%, to $25.8 million for the nine months ended December 31, 2025 from $32.3 million for the nine months ended December 31, 2024. This decrease was due to lower income before income taxes and other items and from a reduction in unfavorable foreign currency impacts recognized in income tax expense during the current year-to-date period, partially offset by an increase in the reserves for unrecognized tax benefits. See "Note 4. Income Taxes" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
Income from unconsolidated affiliates, net increased $4.3 million, or 58.1%, to $11.7 million for the nine months ended December 31, 2025 from $7.4 million for the nine months ended December 31, 2024. This increase was due to higher profitability generated from larger crop volumes sold in South America and Asia, along with additional income from Asia due to a gain on the sale of certain fixed assets and from the receipt of insurance recoveries following severe flooding that impacted operations in the prior year.
Although weWe believe that our sources of liquidity will be sufficient to fund our anticipated operating needs for the next twelve months,months. weDuring anticipatesuch periods during whichtime, our liquidity needs for operations willmay 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.
The following summarizes our total borrowing capacity at DecemberJune 31,30, 20252026 and 20242025 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:
The total borrowing capacity under the ABL Credit Facility increased $30.0 million when compared to the prior period as a result of the Fourth Amendment to the ABL Credit Agreement entered into on May 12, 2025, which among other things, increased the aggregate amount of revolving loan commitments from $120.0 million to $150.0 million. The amounts presented as available under the ABL Credit Facility are subject to further limitations from the borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves.
The total borrowing capacity of our foreign seasonal lines of credit increased $183.8$145.2 million and the remaining amount available also increased by $180.2 million when compared to the prior yearyear. andOur wereforeign primarilyseasonal lines of credit are utilized to purchase largergreen volumestobacco in our sourcing origins and provide us with purchasing flexibility. Lower green tobacco prices and the slower pace of greenour tobacco.purchasing Thein amountsthe presentedcurrent asyear have resulted in an increase in the remaining amount available for borrowing under theour foreign seasonal lines of creditcredit, which are subject to limitations based on the level of receivables and inventories as collateral and by certain restrictive covenants.
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.
Net debt increased as of December 31, 2025 when compared to December 31, 2024 due to higher borrowings on our foreign seasonal lines of credit.
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.
The change in working capital from December 31, 2024 to December 31, 2025 represents a modest decline of $2.5 million, or 0.6%, and reflects increased borrowings under foreign seasonal lines of credit to support purchases of higher volumes of green tobacco, particularly in Africa and South America, mostly offset by the increase in inventories and advances to tobacco suppliers, net funded by such borrowings.
Total processed tobacco increased by $165.3$95.7 million, or 27.4%,16.6%, from DecemberJune 31,30, 20242025 to DecemberJune 31,30, 2025.2026. TheThis increase is primarily reflectsfrom larger carry-over crop volumes purchased and processed in Africa,Africa. includingThe volumeslevel affected by shipment delays from certain African origins during the period. Whileof uncommitted levels of processed tobacco remainedat lowJune as30, of2026 Decemberis 31,higher 2025,than largerthe prior-year period, reflecting the current season crop volumes, particularly from Africa and South America, led to a shift in the global tobaccooversupply market towardenvironment, acompared with more balanced supply environmentand during the current fiscal year, compared to undersupplydemand conditions ina prioryear years. Early indications from the upcoming crop season suggest continued strong production, which is expected to result in oversupply levels at the beginning of fiscal 2027.ago. See "Note 7. Inventories, Net" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
As of DecemberJune 31,30, 2025,2026, our cash, cash equivalents, and restricted cash was $134.5$179.5 million, of which approximately $75.2$130.9 million was held in non-U.S.foreign jurisdictions for non-U.S. 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 change in cash, cash equivalents, and restricted cash for the ninethree months ended DecemberJune 31,30, 20252026 compared to the ninethree months ended DecemberJune 31,30, 20242025 increased by $39.1$26.1 million. This increase was due to higher netcollections proceedsof receivedcash from foreigncustomers seasonalto linessatisfy ofoutstanding credittrade receivables and theadvances non-recurrencefrom of partial repayments made on long-term debtcustomers in theexchange prior-yearfor period,our promise to deliver processed tobacco at a future date, partially offset by anreduced increaseproceeds from short-term borrowings due to lower green tobacco prices in cashAfrica usedand toSouth purchase larger crop volumes.America.
Capital investmentsspend for fiscal year 2027 includes strategic projects to drive long-term efficiencies and cost optimization at our largest operations in ourAfrica leafand operationsSouth wereAmerica. primarilyCapital expenditures are also planned for the routine replacement of machinery and equipment, as well asand investments in other such assets to enhance our sustainabilityoperational effortseffectiveness or increase efficiencies, which we believe will add valueand to support our customers.ongoing Wesustainability efforts. For the three months ended June 30, 2026, we incurred approximately $15.8$4.2 million in capital expenditures for the nine months ended December 31, 2025,expenditures, and are expecting to incur an additional $10.3$34.2 million for the remainder of the fiscal year ending March 31, 2026.2027.
PYYX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding PYYX (13F)
None of the 59 investors we track reported a position in their latest 13F.