PYXUS INTERNATIONAL, INC. (PYYX)
Company: Pyxus International, Inc. Business: Global leaf tobacco merchant and processor, serving major tobacco product manufacturers (e.g., PMI, CNTC, JTI). One reportable segment (Leaf), plus an “All Other” category. Operates worldwide, sourcing tobacco from Africa, Asia, South America, processi...
Pyxus International, Inc. (FY 2025 10-K Review)
Pyxus International, Inc. (Ticker: PYYX) sits at the heart of the global leaf tobacco industry, sourcing, processing, and delivering high-quality tobacco leaf to leading cigarette and consumer tobacco brands worldwide. With over 150 years of combined heritage through predecessor businesses, Pyxus is not only one of the two major publicly-held global leaf merchants but also a pioneer in sustainability, traceability, and data-driven agronomic services.
Warren.AI 💰 5.0 / 10
1. Business Overview (Item 1)
- Core operations: Purchase, processing, and sale of flue-cured, burley, and oriental leaf tobacco; agronomic inputs & financing
- Geographic footprint: ~12 processing locations in North America, South America, Europe, Africa, Asia
- Key services: Custom re-drying, blending, strip-cutting, bale packing, sustainability audits, and track-&-trace via SENTRI® platform
- Customers: Major tobacco product manufacturers (PMI, China National Tobacco, JTI); top three each account for ≥10% of revenues
- Segment reporting: 1 reportable segment (Leaf), “All Other” category (~<1% of revenues)
2. Risk Factors (Item 1A)
- Customer concentration & viability: Three customers each >10% of revenue; global consolidation
- Vertical integration: Cigarette makers in-source or acquire leaf merchants
- Regulatory & trade policy: Tariffs, FCTC crop-diversification, FDA nicotine reduction proposal
- Seasonality & weather: Crop size & quality (El Niño impacts in Africa & South America)
- Currency & interest: USD vs. foreign currencies (Brazil, Argentina); variable-rate debt exposure
- Leverage: $850 million in secured debt; needs high working capital
- ESG scrutiny: Child/forced labor risks; environmental footprint; human rights compliance
3. Results of Operations (Item 7 & 8)
Fiscal 2025 vs. 2024 (Year ended March 31, 2025 vs. 2024)
| Metric | FY ’25 | FY ’24 | Change | Comment |
|---|---|---|---|---|
| Sales & Other Revenues | $2,481.3 m | $2,032.6 m | +22.1% | +18% avg price/kg; +3.4% vol |
| Cost of Goods & Services Sold | $2,138.3 m | $1,720.2 m | +24.3% | Price inflation on green leaf |
| Gross Profit | $343.0 m | $312.3 m | +9.8% | 13.8% vs. 15.4% margin |
| SG&A | $171.0 m | $160.9 m | +6.3% | Personnel costs; equity comp |
| Other, net | $16.4 m | $9.4 m | +74.5% | Securitization & FX impacts |
| Operating Income | $153.3 m | $137.2 m | +11.7% | |
| Net Income attributable to Pyxus | $15.2 m | $2.7 m | +463% |
Key Rates & Unit Measures
- Avg price/kg: $6.09 (FY ’25) vs. $5.16 (FY ’24)
- Cost/kg: $5.25 vs. $4.38
- Gross profit/kg: $0.84 vs. $0.78
- Kilos sold: 383.4 million vs. 370.7 million
4. Balance Sheet & Liquidity
- Net Debt: $771.6 m ($849.9 m debt − $78.3 m cash)
- Working capital: $384.3 m vs. $405.0 m; current ratio 1.5×
- Inventory: $761.9 m vs. $931.7 m; uncommitted processed tobacco $7.6 m vs. $14.9 m
- Advances to suppliers: $35.7 m vs. $22.2 m
- Restricted cash: $7.3 m
- Seasonal lines: $906 m capacity, $388.6 m drawn at 9.4% avg rate
- ABL facility: $120 m capacity, $0 outstanding
5. Cash Flows & Capital Structure
- Operating activities: $(13.4) m in FY ’25 ( used ); vs. $(215.0) m in FY ’24
- Investing activities: $170.6 m provided; securitization collections $188.3 m
- Financing activities: $(167.3) m used; repaid term loans & notes
- Capital expenditures: $23.0 m (FY ’25); forecast $26.1 m (FY ’26)
6. Capital & Funding
| Facility | Amount ($m) | Rate | Use |
|---|---|---|---|
| ABL revolving credit | 120 | SOFR + 2.75%/Base + 2.00% | Working capital |
| Seasonal lines (committed & uncomm.) | 906 | ~9.4% avg | Crop financing |
| 8.50% Senior Secured Notes (2027) | 145.8 | 8.5% | Long-term secured debt |
| Pyxus term loans (2027 maturity) | 121.9 | SOFR + 8.0% / Base + 7.0% | |
| Intabex term loans (2027 maturity) | 187.1 | SOFR + 8.0% / Base + 7.0%; 1% exit | |
| fees on voluntary repayment | |||
| Other liabilities | 12 | 8.8% |
Total senior debt: $) ,*<2) 654.8 million ; Seasonal borrowings: $395.0 million ; Net Debt $771.6 million
7. Pension & Post-Retirement Benefits
- Defined benefit pension plans: $52.4 m obligation, $22.4 m plan assets (non-U.S.)
- Post-retirement health & life: $4.8 m obligation
- Annual expense: ~$5.0 m – $5.1 m
8. ESG & Governance Highlights
- Risk management: FCPA compliance, human rights audits, agronomic training
- Track and trace: SENTRI® platform for full lot-level transparency & sustainability
- Significant ESG engagement: zero forced/child labor policies, environmental stewardship
9. Key Risks & Outlook
- Customer concentration: Top 3 customers ~65% of revenue
- Regulatory uncertainty: Potential FDA nicotine limits, EU traceability rules
- Crop risk: Seasonality, climate change, El Niño impacts on volumes & prices
- High leverage: Interest cost ~$128 m; refinancing & covenant risk
- Currency exposure: Brazilian Real
- ESG pressure: Due diligence costs, compliance within a complex supply chain
Outlook: Pyxus is navigating tighter supply, rising costs, and robust demand in certain regions. While net income remains narrow (+$15.2 m) on $2.5 b in revenues, the Company is strategically enhancing its financial position (net debt −$153 m YoY), investing in sustainable agriculture, and optimizing its processing network. With tobacco industry headwinds accelerating (smoke-free products, regulation), Pyxusaces a challenging environment.
⚖️ Investment Score: **5.0/10**