MORRISVILLE, N.C., Aug. 8, 2019 /CNW/ -- Pyxus International,
Inc. (NYSE: PYX), a global value-added agricultural company, today
announced results for its fiscal quarter ended June 30,
2019.
Highlights
- Sales and other operating revenues decreased $14.3 million or 4.9% to $276.7 million for the three months ended
June 30, 2019 from $291.0 million for the three months ended
June 30, 2018 primarily due to a
decrease in leaf volume resulting from impacts from Hurricane
Florence, foreign tariffs on U.S. tobacco and the timing of
shipments from Africa.
- Gross profit as a percent of sales increased to 14.3% for the
three months ended June 30, 2019 from
14.2% for the three months ended June 30,
2018 primarily due to increased sales in the Other Products
and Services segment and favorable leaf product mix.
- Selling, general and administrative expense ("SG&A")
increased $11.3 million or 29.7% to
$49.4 million for the three months
ended June 30, 2019 from $38.1 million for the three months ended
June 30, 2018 primarily due to
startup costs associated with branding, marketing, and advertising
expenses for the FIGR cannabinoid and Humble Juice e-liquid brands
and the evaluation of a partial monetization of a portion of the
Other Products and Services segment.
- Net loss attributable to Pyxus International, Inc. increased
$61.0 million to $61.8 million for the three months ended
June 30, 2019 from $0.8 million for the three months ended
June 30, 2018.
- Adjusted EBITDA* for the three months ended June 30, 2019 was $11.5
million.
___________
*Adjusted EBITDA is not a measure of results under generally
accepted accounting principles in the
United States. See the reconciliation tables included in
this press release for details regarding the calculation of
Adjusted EBITDA.
___________
Pieter Sikkel, Chairman,
President and CEO said, "Following a transformative fiscal year
2019, we remain dedicated to execution of our strategy and
opportunities to drive enhanced shareholder value. As we move into
the next phase of our 'One Tomorrow' journey, we are taking
additional steps to further position Pyxus for long-term
success.
"We are committed to driving improved results and we remain
focused on strengthening our leaf business while continuing to
execute on our 'One Tomorrow' initiative by investing in our new
startup business ventures to position them for growth. In addition,
we are continuing to evaluate the consolidation of Pyxus' ownership
in its two majority-owned Canadian cannabis businesses with two of
its minority-owned U.S. hemp and e-liquids businesses under the
common control of a subsidiary separate from Pyxus' other
operations, as well as assess related opportunities to monetize a
portion of its interests in this subsidiary in fiscal
2020.
"Balance sheet management and operational optimization will
remain key focus areas as we move into the second half of 2019. We
are encouraged by the great strides we continue to make in legal
Canadian cannabis, industrial hemp and e-liquids, and we are
continuing to pursue aggressive growth and drive these businesses
toward profitability.
"We are maintaining our previously provided full fiscal year
2020 revenue guidance and modifying our adjusted EBITDA range to
$150 million to $170 million as a result of a contemplated
third-party cannabis supply arrangement that did not occur. Our
team in Canada will continue to
work to secure additional supply on similar terms and conditions.
Also included in our guidance is $9.3
million of adjusted EBITDA that may be adversely impacted by
trade issues related to continuing and new tariffs in a number of
jurisdictions that may not be favorably resolved.
"The Alliance One leaf team continues to drive ongoing
improvements in this business. These include leveraging our
international footprint and customer relationships to improve
market share globally, recognizing that challenging trade
conditions and crop sizes will continue to impact certain origins.
While we saw a 4.9% decrease in sales and operating revenues in the
first quarter compared to the same quarter last year, this was
primarily due to the impact of Hurricane Florence and foreign
tariffs in the United States, as
well as the timing of shipments from Africa, and was partially offset by a 7.2%
increase in sales price due to favorable leaf product mix. Based on
previous performance and expected full year results, we anticipate
sales will be more heavily weighted toward the back half of the
year. Alliance One customers continue to recognize our
transformation and our commitment to working closely with them to
identify potential growth opportunities.
"FIGR, Inc., our wholly-owned indirect Canadian cannabis
subsidiary, is executing against its growth strategy, maintaining
strong market share and making progress against its commitment to
increase local capacity. Following its entrance into New Brunswick earlier this summer, the company
quickly established itself as a leader in the market and achieved a
7% share of sales in the first few weeks of its launch.
"New Brunswick marks the third
province in which FIGR products are now available for sale and FIGR
has more than doubled its retail footprint, while maintaining its
commitment to building strong retail relationships and working to
enhance yields and product mix while meeting consumer demand. With
regards to the expansion of its Prince
Edward Island and Ontario
facilities, the expansion of FIGR East (licensed as "Canada's Island Garden") is substantially
complete and the license amendment was submitted as planned. We
expect the new square footage to be operational by the end of the
calendar year. The target completion date for phase two of the FIGR
Norfolk buildout is the end of 2020.
"We continue to make progress in the industrial hemp and
e-liquids categories as well. Criticality, LLC, our unconsolidated
industrial hemp joint venture, recently announced that it is
launching its line of roll-on liniments, the latest CBD product
format under its Korent cannabidiol brand. Looking at the e-liquids
business, Bantam continues to take market share and sales continue
to grow as expected, keeping pace with the success we've seen in
previous quarters. Likewise, Purilum sales are strong and we
continue to see growth in line with projections for the year.
"The farmer remains at the heart of everything we do and our
expansion into value-added agricultural products remains a key area
of focus as we work to help diversify farmer incomes. The
refurbishment and expansion work being done to the oil mill and
refinery operation in Dodoma, Tanzania, is moving forward as planned and we
expect to go into commercial production for sunflower oil
extraction in late 2019. Our strong relationships with farmers will
be a substantial differentiator as we work to develop high-quality,
traceable, sustainable sunflower oil in various product
formats.
"Moving forward in fiscal year 2020, we are committed to the
ongoing execution of our strategy in the next chapter of our
transformation as we work together to achieve our shared purpose to
transform people's lives so that we can grow a better world. Our
team remains focused on pursuing growth opportunities, enhancing
the balance sheet and unlocking value for the benefit of our
shareholders, customers, affiliates and employees."
Performance Summary for Three Months Ended June 30,
2019
Sales and other operating revenues decreased $14.3 million or 4.9% to $276.7 million for the three months ended
June 30, 2019 from $291.0 million for the three months ended
June 30, 2018. This decrease was
primarily due to an 11.5% decrease in Leaf volumes, attributable to
Hurricane Florence reducing the U.S. crop size and foreign tariffs
on U.S. tobacco in North America
and timing of shipments from Africa. This decrease was partially offset by
the continued development of the Other Products and Services
segment and a 7.2% increase in average sales price due to favorable
Leaf product mix.
Cost of goods sold decreased $12.6
million or 5.0% to $237.0
million for the three months ended June 30, 2019 from $249.6
million for the three months ended June 30, 2018. This decrease was primarily due to
the decrease in Leaf volume in North
America.
Gross profit as a percent of sales increased to 14.3% for the
three months ended June 30, 2019 from
14.2% for three months ended June 30,
2018. This increase was primarily due to increased sales in
the Other Products and Services segment and favorable Leaf product
mix.
Selling, general and administrative expense ("SG&A")
increased $11.3 million or 29.7% to
$49.4 million for the three months
ended June 30, 2019 from $38.1 million for the three months ended
June 30, 2018. SG&A as a percent
of sales increased to 17.9% for the three months ended June 30, 2019 from 13.1% for the three months
ended June 30, 2018. These increases
were primarily due to startup costs associated with branding,
marketing, and advertising expenses for the FIGR cannabinoid and
Humble Juice e-liquid brands and the evaluation of a partial
monetization of the Other Products and Services segment.
Restructuring and asset impairment charges decreased
$1.3 million or 86.7% to $0.2 million for the three months ended
June 30, 2019 from $1.5 million for the three months ended
June 30, 2018 primarily due to a
cost-saving and restructuring associated with the closure of a
processing facility in the Leaf - Other Regions segment in
2018.
Income tax expense increased $48.8
million or 192.9% to $23.5
million for three months ended June
30, 2019 from $(25.3) million
for the three months ended June 30,
2018. This increase was primarily due to the change in the
effective tax rate from 92.7% to (59.2)% for the three months ended
June 30, 2018 and 2019, respectively,
and the occurrence of certain discrete items during the three
months ended June 30, 2019.
Earnings Per Share
For the three months ended June 30, 2019, the Company
reported a net loss of $61.8 million,
or $6.79 per basic share, compared to
a net loss of $0.8 million, or
$0.08 per basic share, for the three
months ended June 30, 2018. The
decrease is primarily due to a $48.8
million increase in income tax expense and $11.3 million of additional SG&A costs
primarily due to startup costs associated with branding, marketing,
and advertising expenses for the FIGR cannabinoid and Humble Juice
e-liquid brands and the evaluation of a partial monetization of the
Other Products and Services segment.
Liquidity and Capital Resources
The Company's liquidity requirements are affected by various
factors including crop seasonality, foreign currency and interest
rates, green tobacco prices, customer mix, crop size and quality,
and the extent and timing of facility expansions. As of
June 30, 2019, the Company's available credit lines and cash
totaled $505.5 million. The Company
will continue to monitor and adjust funding sources as needed to
enhance and drive various business opportunities that maintain
flexibility and meet cost expectations.
Financial Results Investor Call
The Company will hold a conference call to report financial
results for the period ended June 30,
2019, on August 8, 2019 at
5:30 P.M. ET. The dial in number for
the call is (929) 477-0324 or (800) 289-0571, using conference ID
8639060. Those seeking to listen to the call may access a live
broadcast on the Pyxus International website. Please visit
www.pyxus.com 15 minutes in advance to register.
For those who are unable to listen to the live event on
August 8, 2019, a replay will be
available for five days by dialing (719) 457-0820 or (888) 203-1112
and entering the access code 8639060. Any replay, rebroadcast,
transcript or other reproduction of this conference call, other
than the replay accessible by calling the number above, has not
been authorized by Pyxus International and is strictly prohibited.
Investors should be aware that any unauthorized reproduction of
this conference call may not be an accurate reflection of its
contents.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
These statements are based on current expectations of future
events. Such statements include, but are not limited to, statements
about future financial and operating results, plans, objectives,
expectations and intentions and other statements that are not
historical facts. Such statements are based on the current beliefs
and expectations of management and are subject to significant risks
and uncertainties. If underlying assumptions prove inaccurate or
known or unknown risks or uncertainties materialize, actual results
may differ materially from those currently anticipated expected or
projected. The following factors, among others, could cause actual
results to differ from those expressed or implied by the
forward-looking statements: changes in the timing of anticipated
shipments, changes in anticipated geographic product sourcing,
political instability, currency and interest rate fluctuations,
shifts in the global supply and demand position for tobacco
products, changes in tax laws and regulations or the interpretation
of tax laws and regulations, resolution of tax matters, adverse
weather conditions, changes in costs incurred in supplying products
and related services, uncertainties with respect to the impact of
regulation associated with new business lines, including the risk
of obtaining anticipated regulatory approvals in Canada, uncertainties regarding the regulation
of the production and distribution of hemp products and continued
compliance with applicable regulatory requirements, uncertainties
with respect to the development of the industries and markets of
the new business lines, consumer acceptance of products offered by
the new business lines, uncertainties with respect to the timing
and extent of retail and product-line expansion; the impact of
increasing competition in the new business lines, uncertainties
regarding obtaining financing to fund planned facilities expansions
in Prince Edward Island and
Ontario, the possibility of delays
in the completion of these and other facilities expansions and
uncertainties regarding the potential production yields of new or
expanded facilities, as well as the progress of legalization of
cannabis for medicinal and adult recreational uses in other
jurisdictions. Additional factors that could cause results to
differ materially from those expressed or implied by
forward-looking statements can be found in Pyxus's most recent
Annual Report on Form 10-K for the period ended March 31, 2019
and the other filings with the Securities and Exchange Commission
(the "SEC") which are available at the SEC's Internet site
(http://www.sec.gov).
About Pyxus International, Inc.
Pyxus International Inc. (NYSE: PYX) is a global agricultural
company with 145 years' experience delivering value-added products
and services to businesses and customers. Driven by a united
purpose—to transform people's lives, so that together we can grow a
better world—Pyxus International, its subsidiaries and affiliates,
are trusted providers of responsibly sourced, independently
verified, sustainable and traceable products and ingredients. For
more information, visit www.pyxus.com.
Condensed
Consolidated Statements of Operations
|
|
|
Three Months Ended
June 30,
|
(in thousands,
except per share data)
|
2019
|
2018
|
Sales and other
operating revenues
|
$
|
276,670
|
$
|
290,989
|
Cost of goods and
services sold
|
236,958
|
249,594
|
Gross
profit
|
39,712
|
41,395
|
Selling, general, and
administrative expenses
|
49,377
|
38,084
|
Other income,
net
|
2,948
|
2,921
|
Restructuring and
asset impairment charges
|
212
|
1,541
|
Operating (loss)
income
|
(6,929)
|
4,691
|
Debt retirement
expense (benefit)
|
—
|
(84)
|
Interest expense
(includes debt amortization of $2,208 and
$2,329 for 2019 and 2018, respectively)
|
33,812
|
32,912
|
Interest
income
|
1,154
|
888
|
Loss before income
taxes and other items
|
(39,587)
|
(27,249)
|
Income tax expense
(benefit)
|
23,453
|
(25,270)
|
Equity in net income
of investee companies
|
877
|
566
|
Net loss
|
(62,163)
|
(1,413)
|
Net loss attributable
to noncontrolling interests
|
(366)
|
(654)
|
Net loss attributable
to Pyxus International, Inc.
|
$
|
(61,797)
|
$
|
(759)
|
|
|
|
Loss per
share:
|
|
|
Basic
|
$
|
(6.79)
|
$
|
(0.08)
|
Diluted
|
$
|
(6.79)
|
$
|
(0.08)
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
Basic
|
9,100
|
9,027
|
Diluted
|
9,100
|
9,027
|
Reconciliation of
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted
EBITDA")(1) (Unaudited)
|
|
|
Three Months
Ended
|
Fiscal Year
Ended
|
LTM(10)
|
|
|
|
|
(in
thousands)
|
June 30,
2019
|
June 30,
2018
|
June 30,
2017
|
March 31,
2019
|
March 31,
2018
|
June 30,
2019
|
June 30,
2018
|
Net (loss) income
attributable to Pyxus International, Inc.
|
$
|
(61,797)
|
$
|
(759)
|
$
|
(32,543)
|
$
|
(70,467)
|
$
|
52,436
|
$
|
(131,505)
|
$
|
84,220
|
Plus: Interest
expense(2)
|
33,812
|
32,912
|
34,442
|
135,553
|
134,279
|
136,453
|
132,749
|
Plus: Income tax
expense (benefit)
|
23,453
|
(25,270)
|
646
|
37,840
|
(58,764)
|
86,563
|
(84,680)
|
Plus: Depreciation
and amortization expense
|
8,810
|
9,277
|
8,387
|
35,747
|
33,598
|
35,280
|
34,488
|
EBITDA(1)
|
4,278
|
16,160
|
10,932
|
138,673
|
161,549
|
126,791
|
166,777
|
Plus: Reserves for
(recoveries on) doubtful customer receivables
|
1
|
293
|
—
|
6,821
|
(152)
|
6,529
|
141
|
Plus: Non-cash
employee stock based compensation
|
429
|
295
|
291
|
1,544
|
1,135
|
1,678
|
1,139
|
Less: Other
income
|
2,948
|
2,921
|
4,304
|
14,217
|
14,382
|
14,244
|
12,999
|
Plus: Fully reserved
recovery of tax(3)
|
2,724
|
2,297
|
2,375
|
10,418
|
11,835
|
10,845
|
11,757
|
Plus: Restructuring
and asset impairment charges
|
212
|
1,541
|
—
|
4,946
|
382
|
3,617
|
1,923
|
Plus: Costs
associated with transformation related to "One Tomorrow"
new business initiatives, not anticipated to be recurring
costs(4)
|
5,829
|
—
|
740
|
8,127
|
6,593
|
13,956
|
5,853
|
Plus: Costs
associated with reorganization of legal entities(5)
|
296
|
147
|
—
|
1,543
|
469
|
1,692
|
616
|
Plus: Costs
associated with the 2017 U.S. Tax Reform Act(6)
|
—
|
680
|
—
|
1,657
|
531
|
977
|
1,211
|
Plus: Debt retirement
benefit
|
—
|
(84)
|
(2,975)
|
(1,753)
|
(2,975)
|
(1,669)
|
(84)
|
Plus: Amortization of
basis difference - CBT investment(7)
|
328
|
326
|
318
|
1,551
|
1,519
|
1,553
|
1,527
|
Plus: One time impact
of newly imposed Argentinian Excise Tax(8)
|
—
|
—
|
—
|
2,818
|
—
|
2,818
|
—
|
Plus: Kenyan
investigation legal & professional costs
|
—
|
161
|
1,556
|
308
|
1,980
|
147
|
585
|
Less: Kenyan green
leaf operation Adjusted EBITDA(9)
|
(337)
|
(1,306)
|
(1,072)
|
(882)
|
(2,329)
|
87
|
(2,563)
|
Adjusted
EBITDA(1)
|
$
|
11,486
|
$
|
20,201
|
$
|
10,005
|
$
|
163,318
|
$
|
170,813
|
$
|
154,603
|
$
|
181,009
|
Total debt
|
|
|
|
|
|
1,420,834
|
1,491,036
|
Less: Cash
|
|
|
|
|
|
164,135
|
202,107
|
Total debt less
cash
|
|
|
|
|
|
$
|
1,256,699
|
$
|
1,288,929
|
(Total debt less
cash) /Adjusted EBITDA(1)
|
|
|
|
|
|
8.13x
|
7.12x
|
|
1.
|
Earnings before
interest, taxes, depreciation and amortization ("EBITDA") and
adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") are not measures of results of
operations under generally accepted accounting principles in the
United States ("U.S. GAAP") and should not be considered as an
alternative to other U.S. GAAP measurements. We have
presented EBITDA and Adjusted EBITDA to adjust for the items
identified above because we believe that it would be helpful to the
readers of our financial information to understand the impact of
these items on our reported results. This presentation enables
readers to better compare our results to similar companies that may
not incur the sporadic impact of various items identified
above. Management acknowledges that there are many items that
impact a company's reported results and this list is not intended
to present all items that may have impacted these results. EBITDA,
Adjusted EBITDA and any ratios calculated based on these measures
are not necessarily comparable to similarly-titled measures used by
other companies or appearing in our debt obligations or agreements.
EBITDA and Adjusted EBITDA as presented may not equal column or row
totals due to rounding.
|
2.
|
As a result of
adoption of standard ASU No. 2017-07 related to
Compensation-Retirement Benefits on April 1, 2018, the three months
ended June 30, 2017 reflects a reclassification of $341 from
SG&A to Interest expense. The fiscal year ended March 31,
2018 reflects a reclassification of $1,301 from SG&A to
Interest expense.
|
3.
|
Represents income
(included in Other income (expense)) from cash received in the
period presented from the sale of Brazilian intrastate trade tax
credits that had been generated by intrastate purchases of tobacco
primarily in prior crop years. The Brazilian states of Rio
Grande do Sul and Santa Catarina permit the sale or transfer of
excess credits to third parties subject to approval by the related
tax authorities. The Company has long-term agreements with
these Brazilian state governments regarding the amounts and timing
of credits that can be sold. Intrastate trade tax credits
that are not able to be sold under existing agreements are
capitalized into the cost of the current crop and are expensed as
cost of goods and services sold as that crop is sold.
|
4.
|
Includes expenses
incurred associated with the development and initial implementation
of the "One Tomorrow" business transformation strategy and
exploration of potential monetization transactions involving the
Company's interest in these businesses, including legal, strategic
consulting, business brokerage and other professional fees,
communications expenses consisting principally of fees to branding
consultants and for translation services, and human resources
expenses, including primarily professional fees related to
recruiting and employee communications.
|
5.
|
Includes expenses
incurred associated with the internal reorganization of legal
entities within the leaf tobacco segments of the company to align
with operations, including legal, strategic and tax consulting
expenses.
|
6.
|
Includes consulting
expenses incurred associated with the implementation of the 2017
U.S. Tax Reform Act, which became effective January 1,
2018.
|
7.
|
Related to a former
Brazilian subsidiary that is now deconsolidated following the
completion of a joint venture in March 2014.
|
8.
|
The initial impact of
the recently imposed Argentinian Excise Tax was $2,818 for
the fiscal year ended March 31, 2019. The cost of the newly
imposed excise tax could not be addressed with customers due to the
timing of enactment and the nature of our customer contracts.
Customer contracts for the current fiscal year contemplate the
newly imposed excise tax.
|
9.
|
Adjusted EBITDA of
our former green leaf sourcing operation in Kenya is
calculated on the same basis as Adjusted EBITDA presented in this
table. In fiscal year 2016 we decided to exit green leaf sourcing
in the Kenyan market as part of our restructuring
program.
|
10.
|
Items for the twelve
months ended June 30, 2019 are derived by adding the items for the
three months ended June 30, 2019 and the fiscal year ended March
31, 2019 and subtracting the items for the three months ended
June 30, 2018. Items for the twelve months ended June 30,
2018 are derived by adding the items for the three months ended
June 30, 2018 and the fiscal year ended March 31, 2018 and
subtracting the items for the three months ended June 30,
2017.
|
Reconciliation of
Combined Leaf Segments Adjusted EBITDA ("Leaf Segments Adjusted
EBITDA")(1) (Unaudited)
|
|
|
Three Months
Ended
|
Fiscal Year
Ended
|
LTM(9)
|
|
|
|
|
(in
thousands)
|
June 30,
2019
|
June 30,
2018
|
June 30,
2017
|
March 31,
2019
|
March 31,
2018
|
June 30,
2019
|
June 30,
2018
|
Leaf - North America
segment Operating income (loss)
|
$
|
762
|
$
|
1,293
|
$
|
(1,513)
|
$
|
10,113
|
$
|
26,446
|
$
|
9,582
|
$
|
29,252
|
Leaf - Other Regions
segment Operating income
|
7,034
|
7,654
|
950
|
112,180
|
88,742
|
111,560
|
95,446
|
Total Combined Leaf
Segments Operating income (loss)
|
7,796
|
8,947
|
(563)
|
122,293
|
115,188
|
121,142
|
124,698
|
Less: Debt retirement
benefit(2)
|
—
|
(80)
|
(2,975)
|
(1,633)
|
(2,867)
|
(1,553)
|
28
|
Plus: Interest
income
|
1,161
|
886
|
967
|
3,367
|
3,271
|
3,642
|
3,190
|
Plus: Equity in net
(loss) income of investee companies
|
(38)
|
(63)
|
(687)
|
7,408
|
8,947
|
7,433
|
9,571
|
Less: Net (loss)
income attributable to noncontrolling interests
|
(83)
|
(240)
|
(90)
|
(108)
|
(434)
|
49
|
(584)
|
Plus: Depreciation
and amortization expense
|
7,853
|
8,533
|
8,387
|
32,760
|
33,189
|
32,080
|
33,335
|
Leaf Segments
EBITDA(1)
|
16,855
|
18,623
|
11,169
|
167,569
|
163,896
|
165,801
|
171,350
|
Plus: Reserves for
(recoveries on) doubtful customer receivables
|
1
|
293
|
—
|
6,749
|
(152)
|
6,457
|
141
|
Plus: Non-cash
employee stock based compensation
|
194
|
261
|
291
|
1,190
|
1,109
|
1,123
|
1,079
|
Less: Other
income
|
2,937
|
2,976
|
4,304
|
13,989
|
14,379
|
13,950
|
13,051
|
Plus: Fully reserved
recovery of tax(3)
|
2,724
|
2,297
|
2,375
|
10,418
|
11,835
|
10,845
|
11,757
|
Plus: Restructuring
and asset impairment charges
|
212
|
1,541
|
—
|
4,946
|
382
|
3,617
|
1,923
|
Plus: Costs
associated with reorganization of legal entities(4)
|
296
|
147
|
—
|
1,543
|
469
|
1,692
|
616
|
Plus: Costs
associated with the 2017 U.S. Tax Reform Act(5)
|
—
|
603
|
—
|
1,277
|
519
|
674
|
1,122
|
Plus: Debt retirement
benefit(2)
|
—
|
(80)
|
(2,975)
|
(1,633)
|
(2,867)
|
(1,553)
|
28
|
Plus: Amortization of
basis difference - CBT investment(6)
|
328
|
326
|
318
|
1,551
|
1,519
|
1,553
|
1,527
|
Plus: One time impact
of newly imposed Argentinian Excise Tax(7)
|
—
|
—
|
—
|
2,818
|
—
|
2,818
|
—
|
Plus: Kenyan
investigation legal & professional costs
|
—
|
161
|
1,556
|
308
|
1,980
|
147
|
585
|
Less: Kenyan green
leaf operation Adjusted EBITDA(8)
|
(337)
|
(1,306)
|
(1,072)
|
(882)
|
(2,329)
|
87
|
(2,563)
|
Leaf Segments
Adjusted EBITDA(1)
|
$
|
18,010
|
$
|
22,502
|
$
|
9,502
|
$
|
183,629
|
$
|
166,640
|
$
|
179,137
|
$
|
179,640
|
|
1.
|
Leaf Segments EBITDA
and Leaf Segments Adjusted EBITDA are not measures of results of
operations under U.S. GAAP and should not be considered as an
alternative to other U.S. GAAP measurements. We have
presented Leaf Segments EBITDA and Leaf Segments Adjusted EBITDA to
present combined information for the Leaf - North America and Leaf
- Other Regions segments for the items identified above because we
believe that it would be helpful to the readers of our financial
information to understand the impact of these items on the reported
results of the Company's leaf tobacco reportable segments separate
from the other reportable segment. This presentation provides
readers with disaggregated information adjusted for the sporadic
impact of the various items identified above. Management
acknowledges that there are many items that impact reported results
and this list is not intended to present all items that may have
impacted these results. These non-GAAP measures and any ratios
calculated based on these measures are not necessarily comparable
to similarly-titled measures used by other companies. Leaf Segments
EBITDA and Leaf Segments Adjusted EBITDA as presented may not equal
column or row totals due to rounding.
|
2.
|
Allocation of benefit
based on total consolidated assets.
|
3.
|
Represents income
(included in Other income (expense)) from cash received in the
period presented from the sale of Brazilian intrastate trade tax
credits that had been generated by intrastate purchases of tobacco
primarily in prior crop years. The Brazilian states of Rio
Grande do Sul and Santa Catarina permit the sale or transfer of
excess credits to third parties subject to approval by the related
tax authorities. The Company has long-term agreements with
these Brazilian state governments regarding the amounts and timing
of credits that can be sold. Intrastate trade tax credits
that are not able to be sold under existing agreements are
capitalized into the cost of the current crop and are expensed as
cost of goods and services sold as that crop is sold.
|
4.
|
Includes expenses
incurred associated with the internal reorganization of legal
entities within the leaf tobacco segments of the company to align
with operations, including legal, strategic and tax consulting
expenses.
|
5.
|
Includes consulting
expenses incurred associated with the implementation of the 2017
U.S. Tax Reform Act, which became effective January 1, 2018.
Allocation of costs based on total consolidated
SG&A.
|
6.
|
Related to a former
Brazilian subsidiary that is now deconsolidated following the
completion of a joint venture in March 2014.
|
7.
|
The initial impact of
the recently imposed Argentinian Excise Tax was $2,818 for
the fiscal year ended March 31, 2019. The cost of the newly
imposed excise tax could not be addressed with customers due to the
timing of enactment and the nature of our customer contracts.
Customer contracts for the current fiscal year contemplate the
newly imposed excise tax.
|
8.
|
Adjusted EBITDA of
our former green leaf sourcing operation in Kenya is
calculated on the same basis as Adjusted EBITDA presented in this
table. In fiscal year 2016 we decided to exit green leaf sourcing
in the Kenyan market as part of our restructuring
program.
|
9.
|
Items for the twelve
months ended June 30, 2019 are derived by adding the items for the
three months ended June 30, 2019 and the fiscal year ended March
31, 2019 and subtracting the items for the three months ended
June 30, 2018. Items for the twelve months ended June 30,
2018 are derived by adding the items for the three months ended
June 30, 2018 and the fiscal year ended March 31, 2018 and
subtracting the items for the three months ended June 30,
2017.
|
Reconciliation of
Other Products and Services Segment Adjusted EBITDA ("Adjusted
EBITDA")(1) (Unaudited)
|
|
|
Three Months
Ended
|
Fiscal Year
Ended
|
LTM(5)
|
|
|
|
|
(in
thousands)
|
June 30,
2019
|
June 30,
2018
|
June 30,
2017
|
March 31,
2019
|
March 31,
2018
|
June 30,
2019
|
June 30,
2018
|
Other Products and
Services segment Operating loss
|
$
|
(14,725)
|
$
|
(4,256)
|
$
|
—
|
$
|
(35,039)
|
$
|
(3,284)
|
$
|
(45,508)
|
$
|
(7,540)
|
Less: Debt retirement
benefit(2)
|
—
|
(4)
|
—
|
(121)
|
(108)
|
(117)
|
(112)
|
Plus: Interest
income
|
(7)
|
2
|
—
|
261
|
—
|
252
|
2
|
Plus: Equity in net
income (loss) of investee companies
|
915
|
630
|
(239)
|
2,182
|
324
|
2,467
|
1,193
|
Less: Net loss
attributable to noncontrolling interests
|
(283)
|
(414)
|
—
|
(593)
|
(96)
|
(462)
|
(510)
|
Plus: Depreciation
and amortization expense
|
957
|
744
|
—
|
2,987
|
409
|
3,200
|
1,153
|
Other Products and
Services segment EBITDA(1)
|
(12,577)
|
(2,462)
|
(239)
|
(28,895)
|
(2,347)
|
(39,010)
|
(4,570)
|
Plus: Reserves for
doubtful customer receivables
|
—
|
—
|
—
|
72
|
—
|
72
|
—
|
Plus: Non-cash
employee stock based compensation
|
235
|
33
|
—
|
354
|
25
|
556
|
58
|
Less: Other
income
|
12
|
(56)
|
—
|
228
|
3
|
296
|
(53)
|
Plus: Costs
associated with transformation related to "One Tomorrow"
new business initiatives, not anticipated to be recurring
costs(3)
|
5,829
|
—
|
740
|
8,127
|
6,593
|
13,956
|
5,853
|
Plus: Costs
associated with the 2017 U.S. Tax Reform Act(4)
|
—
|
77
|
—
|
380
|
12
|
303
|
89
|
Plus: Debt retirement
benefit(2)
|
—
|
(4)
|
—
|
(121)
|
(108)
|
(117)
|
(112)
|
Other Products and
Services Segments Adjusted EBITDA(1)
|
$
|
(6,525)
|
$
|
(2,300)
|
$
|
501
|
$
|
(20,311)
|
$
|
4,172
|
$
|
(24,536)
|
$
|
1,371
|
|
1.
|
Other Products and
Services Segment EBITDA and Other Products and Services Segment
Adjusted EBITDA are not measures of results of operations under
U.S. GAAP and should not be considered as an alternative to other
U.S. GAAP measurements. We have presented these non-GAAP
measures to adjust for the items identified above because we
believe that it would be helpful to the readers of our financial
information to understand the impact of these items on the reported
results of the Company's Other Products and Services Segment,
separate from its other reportable segments. This presentation of
Other Products and Services Segment EBITDA and Other Products and
Services Segment Adjusted EBITDA provides readers with
disaggregated information adjusted for the sporadic impact of
various items identified above. Management acknowledges that
there are many items that impact reported results and this list is
not intended to present all items that may have impacted these
results. Other Products and Services Segment EBITDA and Other
Products and Services Segment Adjusted EBITDA and any ratios
calculated based on these measures are not necessarily comparable
to similarly-titled measures used by other companies. Other
Products and Services Segment EBITDA and Other Products and
Services Segment Adjusted EBITDA as presented may not equal column
or row totals due to rounding.
|
2.
|
Allocation of benefit
based on total consolidated assets.
|
3.
|
Includes expenses
incurred associated with the development and initial implementation
of the "One Tomorrow" business transformation strategy and
exploration of potential monetization transactions involving the
Company's interest in these businesses, including legal, strategic
consulting, business brokerage and other professional fees,
communications expenses consisting principally of fees to branding
consultants and for translation services, and human resources
expenses, including primarily professional fees related to
recruiting and employee communications.
|
4.
|
Includes consulting
expenses incurred associated with the implementation of the 2017
U.S. Tax Reform Act, which became effective January 1, 2018.
Allocation of costs based on total consolidated
SG&A.
|
5.
|
Items for the twelve
months ended June 30, 2019 are derived by adding the items for the
three months ended June 30, 2019 and the fiscal year ended March
31, 2019 and subtracting the items for the three months ended
June 30, 2018. Items for the twelve months ended June 30,
2018 are derived by adding the items for the three months ended
June 30, 2018 and the fiscal year ended March 31, 2018 and
subtracting the items for the three months ended June 30,
2017.
|
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SOURCE Pyxus International, Inc.