Pyxus Reports Third Quarter and Nine-Month Results

Pyxus International reported sales and other operating revenues of $428.9 million for the three months ended Dec. 31, 2021, up 13 percent over those reported in the 2020 third quarter. Gross profit increased 4.3 percent to $65.2 million. As a share of sales, however, gross profit decreased to 15.2 percent.

For the nine months ended Dec. 31, 2021, sales and other operating revenues increased 22.4 percent to $1.16 billion. Gross profit increased 35.2 percent to $159.4 million. As a percent of sales, gross profit increased to 13.8 percent for the nine months.

“We are pleased that our leaf operations’ volume, revenue, and gross margin continued to improve on a year-to-date basis,” said Pyxus President and CEO Pieter Sikkel in a statement. “As of Dec. 31, 2021, more than 90 percent of the company’s inventory was committed to specific customers to meet near-term forecasted demand. In addition, our uncommitted inventory decreased compared to the prior year, is near the low end of our target range of between $50 million and $150 million, and is expected to remain near the low end of our targeted range through fiscal year-end.”

Sikkel said Pyxus would remain proactive in its efforts to accelerate shipments delayed by Covid-related logistical challenges. However, the company expects these challenges to linger for the remainder of its fiscal year, which will delay shipments of committed inventory from the fourth quarter of fiscal 2022 into the first half of fiscal 2023.

The company said it would maintain its focus on liquidity. To address upcoming maturities in its capital structure, Pyxus recently entered into a new $100 million ABL credit facility.

Meanwhile, continued delays of enforcement activities in the e-liquids industry have resulted in lower than anticipated revenue and adjusted EBITDA through the third quarter, according to Sikkel. In November 2021, Pyxus disposed of interests in Humble Juice Co. in exchange for royalties on future revenues.

In December 2021, Pyxus unveiled its environmental, social, and governance framework, demonstrating the company’s commitment to operating its business in a responsible manner.

Earlier this week, the company completed the sale of its FIGR Norfolk assets, the final the final key step in the company’s strategic decision to exit its cash flow negative cannabinoid operations.