What changed in this filing

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Item 1. Financial Statements

2025-02-12 compared with 2024-11-12 · 126 added, 106 removed, 541 unchanged (30% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

(in thousands, except per share data) 2024 2023 2024 2023

7 unchanged sentences

Gain on debt retirement — — 8,178 —

Loss on pension settlement — 12,008 — 12,008

Interest expense, net 32,913 31,994 101,935 95,785

1 unchanged sentence

Income tax expense 18,088 6,156 32,248 16,360

(Income) loss from unconsolidated affiliates, net ( 585 ) ( 2,111 ) ( 3,148 ) 47

Net (loss) income ( 3,273 ) 7,896 1,679 8,666

Net (loss) income attributable to noncontrolling interests ( 46 ) ( 199 ) 264 ( 233 )

Net (loss) income attributable to Pyxus International, Inc.

Income from unconsolidated affiliates, net 4,330 6,578 7,478 6,531

Net income 19,410 4,179 21,089 12,845

Net income attributable to noncontrolling interests 512 344 776 111

Net income attributable to Pyxus International, Inc.

$ 18,898 $ 3,835 $ 20,313 $ 12,734

(Loss) earnings per share:

Earnings per share:

Basic $ 0.74 $ 0.15 $ 0.79 $ 0.51

6 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended Six Months Ended

September 30, September 30,

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended Nine Months Ended

December 31, December 31,

(in thousands) 2024 2023 2024 2023

Net (loss) income $ ( 3,273 ) $ 7,896 $ 1,679 $ 8,666

Other comprehensive income (loss), net of tax:

Net income $ 19,410 $ 4,179 $ 21,089 $ 12,845

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 976 ) 2,185 ( 155 ) 1,347

Pension and other postretirement benefit plans — 3,511 — 3,511

Cash flow hedges ( 2,453 ) ( 1,288 ) ( 3,424 ) ( 1,426 )

Total other comprehensive income (loss), net of tax 1,544 ( 2,545 ) ( 150 ) ( 976 )

Total comprehensive (loss) income ( 1,729 ) 5,351 1,529 7,690

Comprehensive (loss) income attributable to noncontrolling interests ( 46 ) ( 199 ) 264 ( 233 )

Comprehensive (loss) income attributable to Pyxus International, Inc.

Total other comprehensive (loss) income, net of tax ( 3,429 ) 4,408 ( 3,579 ) 3,432

Total comprehensive income 15,981 8,587 17,510 16,277

Comprehensive income attributable to noncontrolling interests 512 344 776 111

Comprehensive income attributable to Pyxus International, Inc.

$ 15,469 $ 8,243 $ 16,734 $ 16,166

3 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands) September 30, 2024 September 30, 2023 March 31, 2024

(in thousands) December 31, 2024 December 31, 2023 March 31, 2024

Current assets

68 unchanged sentences

Balance, September 30, 2024 $ 392,421 $ ( 253,876 ) $ ( 4,871 ) $ 12,766 $ ( 259 ) $ 4,578 $ 150,759

Net income — 18,898 — — — 512 19,410

Equity-based compensation 267 — — — — — 267

Other comprehensive loss, net of tax — — ( 976 ) — ( 2,453 ) — ( 3,429 )

Balance, December 31, 2024 $ 392,688 $ ( 234,978 ) $ ( 5,847 ) $ 12,766 $ ( 2,712 ) $ 5,090 $ 167,007

Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830

6 unchanged sentences

Balance, September 30, 2023 $ 390,290 $ ( 249,055 ) $ ( 7,230 ) $ 8,335 $ 3,434 $ 4,239 $ 150,013

Net income — 3,835 — — — 344 4,179

Other ( 501 ) — — — — 8 ( 493 )

Dividends — — — — — ( 450 ) ( 450 )

Other comprehensive income (loss), net of tax — — 2,185 3,511 ( 1,288 ) — 4,408

Balance, December 31, 2023 $ 389,789 $ ( 245,220 ) $ ( 5,045 ) $ 11,846 $ 2,146 $ 4,141 $ 157,657

See "Notes to Condensed Consolidated Financial Statements"

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended

September 30,

Nine Months Ended

(in thousands) 2024 2023

6 unchanged sentences

Loss on foreign currency transactions 1,604 5,500

Loss on pension settlement — 12,008

Equity-based compensation 3,899 —

(Income) loss from unconsolidated affiliates, net of dividends ( 3,148 ) 13,707

Income from unconsolidated affiliates, net of dividends 3,997 7,129

Changes in operating assets and liabilities, net

42 unchanged sentences

Revenue Recognition

(Loss) Earnings Per Share

Earnings Per Share

Restricted Cash

7 unchanged sentences

Fair Value Measurements

Pension and Other Postretirement Benefits

Contingencies and Other Information

2 unchanged sentences

Segment Information

Subsequent Events

Basis of Presentation and Summary of Significant Accounting Policies

22 unchanged sentences

Early adoption is permitted.

This new rule will result in additional disclosures for segment reporting, and does not have an impact on the Company's financial condition, results of operations, or cash flows.

This ASU will result in additional disclosures for segment reporting, and does not have an impact on the Company's financial condition, results of operations, or cash flows.

In December 2023, the FASB issued ASU No.

10 unchanged sentences

Early adoption is permitted.

This new rule will result in additional disclosures within the footnotes to the financial statements, and is not expected to have an impact on the Company’s financial condition, results of operations, or cash flows.

This new standard will result in additional disclosures within the footnotes to the financial statements, and is not expected to have an impact on the Company’s financial condition, results of operations, or cash flows.

Revenue Recognition

4 unchanged sentences

The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the condensed consolidated financial statements:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

5 unchanged sentences

The following summarizes activity in the allowance for expected credit losses:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

8 unchanged sentences

therefore, the Company recorded its interim income tax provision using the discrete method, as allowed under FASB ASC 740-270, Income Taxes - Interim Reporting .

Using the discrete method, the Company determined income tax expense as if each of the six-month interim periods reported were an annual period.

The effective tax rate for the six months ended September 30, 2024 and 2023 was 111.6 % and 53.9 %, respectively.

For the six months ended September 30, 2024, the difference between the Company’s effective rate and the U.S.

Using the discrete method, the Company determined income tax expense as if each of the nine-month interim periods reported were an annual period.

The effective tax rate for the nine months ended December 31, 2024 and 2023 was 70.3 % and 72.2 %, respectively.

For the nine months ended December 31, 2024, the difference between the Company’s effective rate and the U.S.

statutory rate of 21.0% is primarily due to U.S.

taxation of foreign earnings, partially offset by foreign tax credits and increases in the Company's deferred tax valuation allowances.

The long-term liability for unrecognized tax benefits as of September 30, 2024 was $ 12,510 compared to $ 20,170 as of September 30, 2023.

The decrease was primarily driven by tax settlements in Africa.

(Loss) Earnings Per Share

The calculations of basic and diluted (loss) earnings per share are based on net (loss) income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively.

taxation of foreign earnings and tax expense related to foreign currency gains in Africa and South America recognized in the current period, partially offset by foreign tax credits.

Earnings Per Share

The calculations of basic and diluted earnings per share are based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively.

Under the treasury stock method, restricted stock units will have a dilutive effect when the respective period's average market price of the Company's common stock exceeds the assumed exercise proceeds and the average amount of cost not yet recognized.

Performance based stock units are included in diluted (loss) earnings per share if the performance targets have been met at the end of the reporting period.

Share-based payment awards that provide contingently issuable shares upon a performance or market condition are included in basic and diluted (loss) earnings per share only if the condition is met as of the end of the reporting period.

The following summarizes the computation of (loss) earnings per share:

Three Months Ended Six Months Ended

September 30, September 30,

Performance based stock units are included in diluted earnings per share if the performance targets have been met at the end of the reporting period.

Share-based payment awards that provide contingently issuable shares upon a performance or market condition are included in basic and diluted earnings per share only if the condition is met as of the end of the reporting period.

The following summarizes the computation of earnings per share:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

Net (loss) income attributable to Pyxus International, Inc.

Net income attributable to Pyxus International, Inc.

$ 18,898 $ 3,835 $ 20,313 $ 12,734

2 unchanged sentences

Diluted weighted average shares outstanding 25,540 25,000 25,643 25,000

(Loss) earnings per share:

Earnings per share:

Basic $ 0.74 $ 0.15 $ 0.79 $ 0.51

Diluted $ 0.74 $ 0.15 $ 0.79 $ 0.51

(1) For the three and six months ended September 30, 2024, the weighted average number of outstanding restricted stock units not included in the computation of diluted earnings per share because their effect would be antidilutive is 96 and 82 , respectively.

(1) For the three and nine months ended December 31, 2024, the weighted average number of outstanding restricted stock units not included in the computation of diluted earnings per share because their effect would be antidilutive is 63 and 6 , respectively.

Restricted Cash

The following summarizes the composition of restricted cash:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Compensating balance for short-term borrowings $ 542 $ 516 $ 516

5 unchanged sentences

The following summarizes the composition of inventories, net:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Processed tobacco $ 603,283 $ 659,028 $ 585,280

4 unchanged sentences

Equity Method Investments

The following summarizes the Company's equity method investments as of September 30, 2024:

The following summarizes the Company's equity method investments as of December 31, 2024:

Investee Name Location Primary Purpose Ownership Percentage Basis Difference (1)

13 unchanged sentences

The following summarizes financial information for these equity method investments:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

3 unchanged sentences

Net income 8,933 14,066 15,354 15,222

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Balance sheet:

7 unchanged sentences

The following summarizes the Company's financial relationships with its unconsolidated variable interest entities:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Investments in variable interest entities $ 90,685 $ 86,889 $ 94,609

3 unchanged sentences

The gross carrying amount and accumulated amortization of intangible assets consist of the following:

September 30, 2024

December 31, 2024

Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net

4 unchanged sentences

Total $ 49,019 $ ( 19,392 ) $ 29,627

September 30, 2023

December 31, 2023

Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net

12 unchanged sentences

The following summarizes amortization expense for definite-lived intangible assets:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

2 unchanged sentences

The following summarizes debt and notes payable:

(in thousands) Interest Rate September 30, 2024 September 30, 2023 March 31, 2024

(in thousands) Interest Rate December 31, 2024 December 31, 2023 March 31, 2024

Senior secured credit facilities:

ABL Credit Facility 8.3 % (1)

$ 35,000 $ — $ —

Senior secured notes:

18 unchanged sentences

Letters of credit $ 8,095 $ 4,670 $ 5,070

(1) Weighted average rate for the trailing twelve months ended September 30, 2024 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding.

(1) Weighted average rate for the trailing twelve months ended December 31, 2024 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding.

(2) Balance of $ 145,628 is net of a debt discount of $ 2,711 .

15 unchanged sentences

The ABL Credit Facility includes a $ 20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $ 140,000 .

At September 30, 2024, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.

At December 31, 2024, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.

Intabex Term Loans

4 unchanged sentences

A detailed description of the Intabex Term Loan Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

At September 30, 2024, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.

At December 31, 2024, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.

Pyxus Term Loans

3 unchanged sentences

A detailed description of the Pyxus Term Loan Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

At September 30, 2024, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.

At December 31, 2024, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.

8.50 % Senior Secured Notes due 2027

5 unchanged sentences

A detailed description of the 2027 Notes and the 2027 Notes Indenture is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

At September 30, 2024, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

At December 31, 2024, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

Related Party Transactions

18 unchanged sentences

Certain of the foreign seasonal lines of credit are secured by trade receivables and inventories as collateral and are guaranteed by the Company and certain of its subsidiaries.

As of September 30, 2024, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 170,000 .

As of September 30, 2024, the aggregate amount available for borrowing under the seasonal lines of credit was $ 175,431 .

At September 30, 2024, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 885,218 , subject to limitations under the ABL Credit Agreement and the agreements governing the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes.

At September 30, 2024 , $ 542 of cash was held on deposit as a compensating balance.

At September 30, 2024, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

As of December 31, 2024, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 170,000 .

As of December 31, 2024, the aggregate amount available for borrowing under the seasonal lines of credit was $ 285,154 .

At December 31, 2024, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 871,536 , subject to limitations under the ABL Credit Agreement and the agreements governing the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes.

At December 31, 2024, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

Securitized Receivables

6 unchanged sentences

Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the condensed consolidated statements of operations.

As of September 30, 2024, the investment limit of this facility was $ 120,000 of trade receivables.

As of December 31, 2024, the investment limit of this facility was $ 120,000 of trade receivables.

Under the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution.

1 unchanged sentence

Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based upon unobservable inputs, primarily discounted cash flow.

As of September 30, 2024, the investment limit under the second facility was $ 130,000 of trade receivables.

As of December 31, 2024, the investment limit under the second facility was $ 130,000 of trade receivables.

As servicer for the Finacity Facility and the second facility, the Company may receive funds that are due to the unaffiliated financial institutions which are net settled on the next settlement date.

As of September 30, 2024 and 2023, and March 31, 2024, trade receivables, net in the condensed consolidated balance sheets has been reduced by $ 11,093 , $ 10,014 , and $ 15,036 as a result of the net settlement, respectively.

As of September 30, 2024 and March 31, 2024, accrued expenses and other current liabilities in the consolidated balance sheets includes $ 1,735 and $ 10,279 of net payables for the Finacity Facility.

As of December 31, 2024 and 2023, and March 31, 2024, trade receivables, net in the condensed consolidated balance sheets has been reduced by $ 8,927 , $ 5,813 , and $ 15,036 as a result of the net settlement, respectively.

As of March 31, 2024, accrued expenses and other current liabilities in the consolidated balance sheets includes $ 10,279 of net payables for the Finacity Facility.

Refer to " Note 15.

2 unchanged sentences

Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables.

As of September 30, 2024, the investment limits under these other facilities were variable based on qualifying sales.

As of December 31, 2024, the investment limits under these other facilities were variable based on qualifying sales.

The following summarizes the Company's accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, which represents the Company's residual interest in receivables sold that have not been collected from the customer:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Receivables outstanding in facility $ 230,845 $ 136,203 $ 170,267

3 unchanged sentences

The following summarizes the Company's cash purchase price and deferred purchase price:

Six Months Ended

September 30,

Nine Months Ended

Cash proceeds:

4 unchanged sentences

The following summarizes amounts guaranteed and the fair value of those guarantees:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Amounts guaranteed (not to exceed) $ 75,397 $ 63,967 $ 97,411

3 unchanged sentences

Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 44 42 34,571

(1) Most of the guarantees outstanding at September 30, 2024 expire within one year .

(1) Most of the guarantees outstanding at December 31, 2024 expire within one year .

Derivative Financial Instruments

1 unchanged sentence

These contracts are for green tobacco purchases, processing costs, and selling, general, and administrative expenses.

The Company recorded a net loss of $ 412 and net gain of $ 439 from its derivative financial instruments in cost of goods and services sold for the three and six months ended September 30, 2024, respectively.

The Company recorded a net gain of $ 1,386 and $ 2,820 from its derivative financial instruments in cost of goods and services sold for the three and six months ended September 30, 2023, respectively.

As of September 30, 2024 and 2023, the Company recorded current derivative assets of $ 685 and $ 132 within other current assets, respectively, and current derivative liabilities of $ 490 and $ 78 within accrued expenses and other current liabilities, respectively.

The Company recorded a net loss of $ 537 and $ 98 from its derivative financial instruments in cost of goods and services sold for the three and nine months ended December 31, 2024, respectively.

The Company recorded a net gain of $ 1,548 and $ 4,368 from its derivative financial instruments in cost of goods and services sold for the three and nine months ended December 31, 2023, respectively.

As of December 31, 2024 and 2023, the Company recorded current derivative liabilities of $ 3,987 and $ 0 within accrued expenses and other current liabilities, respectively.

Refer to " Note 15.

2 unchanged sentences

Dollar notional amount of derivative contracts outstanding:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Dollar notional outstanding $ 55,000 $ — $ —

1 unchanged sentence

The following summarizes the financial assets and liabilities measured at fair value on a recurring basis:

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Level 2 Level 3 Total

2 unchanged sentences

Financial Assets:

Derivative financial instruments $ 685 $ — $ 685 $ 132 $ — $ 132 $ — $ — $ —

Securitized beneficial interests $ — $ 17,671 $ 17,671 $ — $ 14,312 $ 14,312 $ — $ 15,036 $ 15,036

9 unchanged sentences

Three Months Ended

September 30, 2024 September 30, 2023

December 31, 2024 December 31, 2023

Securitized Beneficial Interests Long-Term Debt Guarantees Securitized Beneficial Interests Long-Term Debt Guarantees

4 unchanged sentences

Ending balance $ 17,671 $ 49 $ 2,666 $ 14,312 $ 200 $ 1,703

Six Months Ended

September 30, 2024 September 30, 2023

Nine Months Ended

December 31, 2024 December 31, 2023

Securitized Beneficial Interests Long-Term Debt Guarantees Securitized Beneficial Interests Long-Term Debt Guarantees

4 unchanged sentences

Ending balance $ 17,671 $ 49 $ 2,666 $ 14,312 $ 200 $ 1,703

For the six months ended September 30, 2024 and 2023, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 961 and $ 1,230 , respectively.

For the nine months ended December 31, 2024 and 2023, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 1,272 and $ 1,551 , respectively.

Gains and losses included in earnings are reported in other expense, net.

Pension and Other Postretirement Benefits

The Company terminated one of its defined benefit pension plans in the U.K.

Pension Plan") during the three-month period ended December 31, 2023 .

Pension Plan was over-funded.

During the three-month period ended December 31, 2023 , the Company utilized the surplus assets to pay termination fees and received a $ 1,106 cash distribution from the plan termination.

The Company recorded a noncash pension settlement charge of $ 12,008 during the three and nine months ended December 31, 2023 , which included the disposition of the U.K.

Pension Plan assets and the reclassification of $ 3,511 unrecognized net pension losses, net of $ 1,170 tax benefit, within accumulated other comprehensive income into the Company's condensed consolidated statements of operations.

Contingencies and Other Information

1 unchanged sentence

The government in the Brazilian State of Parana ("Parana") issued a tax assessment on October 26, 2007 with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil.

At September 30, 2024, the assessment for intrastate trade tax credits taken is $ 2,423 and the total assessment including penalties and interest is $ 10,095 .

The Company believes it has properly complied with Brazilian law and will contest any assessment through the

judicial process.

At December 31, 2024, the assessment for intrastate trade tax credits taken is $ 2,132 and the total assessment including penalties and interest is $ 8,963 .

The Company believes it has properly complied with Brazilian law and will contest any assessment through the judicial process.

Should the Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the financial statements of the Company.

8 unchanged sentences

On the Modification Date, the amended Listing Condition was rendered nonsubstantive, and recipients of all such outstanding time-vesting restricted stock units had satisfied the continued service requirement, meaning the then-outstanding restricted stock units were fully earned for vesting.

During the three and six months ended September 30, 2024, the Company recognized total equity-based compensation expense of $ 601 and $ 3,632 , respectively, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations.

During the three and nine months ended December 31, 2024, the Company recognized total equity-based compensation expense of $ 267 and $ 3,899 , respectively, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations.

The modified time-vesting restricted stock units accounted for $ 3,263 of the total equity-based compensation recognized year-to-date to reflect the cumulative catch-up required on the Modification Date.

The following summarizes the Company's equity awards granted:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

(in thousands, except grant date fair value) 2024 2023 2024 2023

5 unchanged sentences

Weighted average grant date fair value $ — $ — $ 4.36 $ —

Restricted stock units granted under the Incentive Plan during the three and six months ended September 30, 2024 are earned ratably over a three-year period, and will vest, subject to continued employment, upon the earlier of March 31, 2031 or the occurrence of a liquidity event as defined under the terms of the restricted stock unit award agreement.

Unrecognized compensation costs for restricted stock units is $ 2,435 as of September 30, 2024, and is expected to be recognized over a weighted average period of 2.53 years, representing the remaining service period related to the awards, subject to adjustments for actual forfeitures.

Restricted stock units granted under the Incentive Plan are earned ratably from the date of the award to March 31, 2027 for certain employees and from the date of the award to the Company's next annual shareholders meeting for certain members of the Board of Directors, and will vest, subject to continued employment or service, upon the earlier of March 31, 2031 or the occurrence of a liquidity event as defined under the terms of the restricted stock unit award agreement.

Unrecognized compensation costs for restricted stock units is $ 2,307 as of December 31, 2024, and is expected to be recognized over a weighted average period of 2.19 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.

Under the terms of the performance-based stock units, the amount of shares to be issued (ranging from 0 % to 200 % of the number of shares to be issued at the target performance level) will be contingent upon the per share price achieved in a liquidity event (as defined under the terms of the performance-based stock unit award agreement), subject to continued employment through the date of a liquidity event.

The contingent liquidity event is not probable as of September 30, 2024, and accordingly, no equity-based compensation expense has been recognized for the performance-based stock units granted during the period.

The contingent liquidity event is not probable as of December 31, 2024, and accordingly, no equity-based compensation expense has been recognized for the performance-based stock units granted during the period.

Related Party Transactions

1 unchanged sentence

The following summarizes activities with the Company's equity method investees:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

3 unchanged sentences

The Company included the following related party balances in its condensed consolidated balance sheets:

September 30, 2024 September 30, 2023 March 31, 2024 Location in Condensed Consolidated Balance Sheet

December 31, 2024 December 31, 2023 March 31, 2024 Location in Condensed Consolidated Balance Sheet

Accounts receivable, related parties $ 54 $ 50 $ 50 Other receivables

10 unchanged sentences

is the investment manager of certain funds and reported beneficial ownership of 3,865 shares of the Company’s common stock on August 31, 2024, representing approximately 15.7 % of the outstanding shares of the Company’s common stock.

Funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") were holders, in part, of the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes, which are described in " Note 11.

Debt Arrangements ," during the six months ended September 30, 2024.

were holders, in part, of the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes, which are described in " Note 11.

Debt Arrangements ," during the nine months ended December 31, 2024.

On August 21, 2024, the Company entered into a privately negotiated transaction with CI Investments, Inc.

2 unchanged sentences

Following the completion of this transaction and other contemporaneous dispositions of the Company’s common stock by CI Investments, CI Investments ceased to be a beneficial owner of more than five percent of the Company's common stock outstanding.

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of September 30, 2024 and 2023, and March 31, 2024, includes $ 1,624 , $ 9,480 , and $ 4,239 , respectively, of interest payable to Investor-Affiliated Funds and CI Investments (applicable only for the periods in which CI Investments was a beneficial owner of more than five percent of the Company's common stock outstanding).

Interest expense as presented in the condensed consolidated statements of operations includes $ 5,945 and $ 13,206 for the three and six months ended September 30, 2024, respectively, and $ 10,294 and $ 20,369 for the three and six months ended September 30, 2023, respectively, that relates to the Investor-Affiliated Funds and CI Investments (applicable only for the periods in which CI Investments was a beneficial owner of more than five percent of the Company's common stock outstanding).

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of December 31, 2024 and 2023, and March 31, 2024, includes $ 3,362 , $ 4,091 , and $ 4,239 , respectively, of interest payable to Investor-Affiliated Funds and CI Investments (applicable only for the periods in which CI Investments was a beneficial owner of more than five percent of the Company's common stock outstanding).

Interest expense as presented in the condensed consolidated statements of operations includes $ 5,762 and $ 18,968 for the three and nine months ended December 31, 2024, respectively, and $ 10,314 and $ 30,683 for the three and nine months ended December 31, 2023, respectively, that relates to the Investor-Affiliated Funds and CI Investments (applicable only for the periods in which CI Investments was a beneficial owner of more than five percent of the Company's common stock outstanding).

The holders of senior debt that are parties to the Debt Repurchase Agreement entered into on March 21, 2024 are funds affiliated with the Monarch Investor and of which the Monarch Investor is the investment advisor.

The Debt Repurchase Agreement and the transactions contemplated thereby, including the exercise by Pyxus Holdings of its right to purchase the Pyxus Term Loans and additional 2027 Notes thereunder on April 12, 2024, were approved, and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm's length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of

Under the terms of the Debt Repurchase Agreement, the Company has paid the following amounts to funds affiliated with the Monarch Investor:

6 unchanged sentences

The following summarizes segment information, with the All Other category being included for purposes of reconciliation of the respective balances of the Leaf segment (the Company's sole reportable segment) to the condensed consolidated financial statements:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

9 unchanged sentences

Consolidated operating income $ 66,081 $ 47,759 $ 139,616 $ 130,467

September 30, 2024 September 30, 2023 March 31, 2024

December 31, 2024 December 31, 2023 March 31, 2024

Segment assets:

2 unchanged sentences

Total assets $ 1,720,184 $ 1,601,380 $ 1,657,913

S ubsequent Events

Securitized Receivables

Two of the Company's accounts receivable securitization facilities described in " Note 12.

Securitized Receivables " were amended as follows:

• Effective January 1, 2025, the investment limit of the Finacity Facility was temporarily increased from $ 120,000 to $ 160,000 of trade receivables through April 30, 2025.

• Effective February 10, 2025, the investment limit of the second facility was increased from $ 130,000 to $ 160,000 of trade receivables.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements