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Item 1. Financial Statements

2025-11-12 compared with 2025-08-06 · 186 added, 103 removed, 519 unchanged (36% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended

Three Months Ended Six Months Ended

September 30, September 30,

(in thousands, except per share data) 2025 2024 2025 2024

8 unchanged sentences

Interest expense, net 37,922 35,750 67,689 69,022

(Loss) income before income taxes and other items ( 8,767 ) 8,508

Income before income taxes and other items 8,806 4,183 39 12,691

Income tax expense 10,305 8,041 15,532 14,160

(Loss) income from unconsolidated affiliates, net ( 1,269 ) 2,563

Income (loss) from unconsolidated affiliates, net 597 585 ( 672 ) 3,148

Net (loss) income ( 902 ) ( 3,273 ) ( 16,165 ) 1,679

Net income attributable to noncontrolling interests 562 310

Net (loss) income attributable to noncontrolling interests ( 23 ) ( 46 ) 539 264

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

10 unchanged sentences

Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended

Three Months Ended Six Months Ended

September 30, September 30,

(in thousands) 2025 2024 2025 2024

Net (loss) income $ ( 902 ) $ ( 3,273 ) $ ( 16,165 ) $ 1,679

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 477 ) 278 1,562 821

Cash flow hedges ( 1,016 ) 1,266 441 ( 971 )

Total other comprehensive income (loss), net of tax 3,496 ( 1,694 )

Total other comprehensive (loss) income, net of tax $ ( 1,493 ) $ 1,544 $ 2,003 $ ( 150 )

Total comprehensive (loss) income ( 2,395 ) ( 1,729 ) ( 14,162 ) 1,529

Comprehensive income attributable to noncontrolling interests 562 310

Comprehensive (loss) income attributable to noncontrolling interests ( 23 ) ( 46 ) 539 264

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

4 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands) June 30, 2025 June 30, 2024 March 31, 2025

(in thousands) September 30, 2025 September 30, 2024 March 31, 2025

Current assets

38 unchanged sentences

Authorized shares ( 250,000 for all periods)

Issued and outstanding shares ( 24,608 , 25,000 and 24,608 )

Issued and outstanding shares ( 24,608 for all periods)

$ 393,392 $ 392,421 $ 392,899

21 unchanged sentences

Balance, June 30, 2025 $ 393,136 $ ( 255,950 ) $ ( 4,006 ) $ 12,516 $ 2,301 $ 6,243 $ 154,240

Net loss — ( 879 ) — — — ( 23 ) ( 902 )

Dividends — — — — — ( 135 ) ( 135 )

Equity-based compensation 256 — — — — — 256

Other comprehensive loss, net of tax — — ( 477 ) — ( 1,016 ) — ( 1,493 )

Balance, September 30, 2025 $ 393,392 $ ( 256,829 ) $ ( 4,483 ) $ 12,516 $ 1,285 $ 6,085 $ 151,966

Balance, March 31, 2024 $ 389,789 $ ( 255,291 ) $ ( 5,692 ) $ 12,766 $ 712 $ 4,539 $ 146,823

3 unchanged sentences

Balance, June 30, 2024 $ 392,820 $ ( 250,649 ) $ ( 5,149 ) $ 12,766 $ ( 1,525 ) $ 4,849 $ 153,112

Net loss — ( 3,227 ) — — — ( 46 ) ( 3,273 )

Dividends — — — — — ( 225 ) ( 225 )

Equity-based compensation 601 — — — — — 601

Share repurchases ( 1,000 ) — — — — — ( 1,000 )

Other comprehensive income, net of tax — — 278 — 1,266 — 1,544

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

See "Notes to Condensed Consolidated Financial Statements"

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

September 30,

(in thousands) 2025 2024

34 unchanged sentences

Effect of exchange rate changes on cash ( 2,430 ) ( 2,138 )

Increase (decrease) in cash, cash equivalents, and restricted cash 15,838 ( 10,690 )

Increase in cash, cash equivalents, and restricted cash 20,904 31,139

Cash and cash equivalents at beginning of period 78,254 92,569

30 unchanged sentences

The accompanying unaudited condensed consolidated interim financial statements represent the consolidation of Pyxus International, Inc.

(the "Company", "Pyxus", "we", or "us") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise.

(the "Company," "Pyxus," "we," "us," or "our") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise.

These condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

35 unchanged sentences

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.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments - Credit Losses:

Measurement of Credit Losses for Accounts Receivable and Contract Assets , to include a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets.

This new practical expedient allows an entity to assume current economic conditions as of the balance sheet date will not change for the life of the asset, thereby eliminating the need for an

entity to develop and consider reasonable and supportable forecasts of future economic conditions.

This amendment is effective for the Company's fiscal year beginning April 1, 2026, including interim periods within that fiscal year.

Early adoption is permitted.

This amendment is not expected to have a material impact on the Company's financial condition, results of operations, or cash flows.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software:

Targeted Improvements to the Accounting for Internal-Use Software , changing the existing model used to determine when cost capitalization is to occur based on various project stages of software development with a more modern approach that introduces a probable-to-complete recognition threshold.

The scope of this new guidance also includes the costs an entity incurs to implement a cloud computing arrangement as a customer.

This amendment is effective for the Company's annual and interim periods beginning April 1, 2028.

Early adoption is permitted.

The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and 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

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Product revenue $ 511,197 $ 515,813 $ 969,435 $ 1,105,030

4 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Balance, beginning of period $ ( 24,299 ) $ ( 24,035 ) $ ( 24,035 ) $ ( 23,940 )

4 unchanged sentences

Trade receivables, net $ 195,364 $ 226,376 $ 195,364 $ 226,376

The Company’s quarterly provision for income taxes for the three months ended June 30, 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusting for discrete items that occurred during the period.

The Company’s quarterly provision for income taxes for the three months ended June 30, 2024 was calculated using the discrete method, as allowed under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting .

The discrete method used in the prior year calculates income tax expense as if the three-month interim period was an annual period.

The effective tax rate for the three months ended June 30, 2025 and 2024 was ( 59.6 )% and 71.9 %, respectively.

For the three months ended June 30, 2025, the difference between the Company’s effective rate and the U.S.

statutory rate of 21.0% is primarily due to tax expense related to foreign currency gains, liabilities for unrecognized tax benefits, and nondeductible interest expense.

The Company’s provision for income taxes for the three and six months ended September 30, 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusting for discrete items that occurred during the period.

The Company’s provision for income taxes for the three and six months ended September 30, 2024 was calculated using the discrete method, as allowed under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting .

The discrete method used in the prior year calculates income tax expense as if the six-month interim period was an annual period.

The effective tax rate for the three months ended September 30, 2025 and 2024 was 117.0 % and 192.2 %, respectively.

For the three months ended September 30, 2025, the difference between the Company's effective tax rate and the U.S.

statutory rate of 21.0% is primarily due to tax expense related to foreign currency gains, the liability for unrecognized tax benefits, and non-deductible interest expense.

The effective tax rate for the six months ended September 30, 2025 was not meaningful due to near break-even income before income taxes for the period.

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

For the six months ended September 30, 2025, tax expense is impacted by foreign currency gains, the liability for unrecognized tax benefits, and non-deductible interest expense.

On July 4, 2025, the U.S.

2 unchanged sentences

federal income tax law, including the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and changes to the international tax framework.

Certain provisions of the OBBBA are effective for the Company's fiscal year ending March 31, 2026, and the Company is currently evaluating the impact it will have on our condensed consolidated financial statements.

The Company has included the effects of the OBBBA in its current-period provision for income taxes and determined it did not have a material impact on our estimated annual effective tax rate for the fiscal year ending March 31, 2026.

(Loss) Earnings Per Share

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

Three Months Ended

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

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

6 unchanged sentences

Diluted $ ( 0.03 ) $ ( 0.12 ) $ ( 0.65 ) $ 0.06

(1) For the three months ended June 30, 2025 and 2024, 264 shares and 17 shares, respectively, related to outstanding restricted stock units have been excluded from the computation of diluted earnings per share because their effect would be antidilutive.

(1) For the three and six months ended September 30, 2025, 186 shares and 225 shares, respectively, related to outstanding restricted stock units have been excluded from the computation of diluted earnings per share because their effect would be antidilutive.

For the three and six months ended September 30, 2024, 96 shares and 82 shares, respectively, related to outstanding restricted stock units have been excluded from the computation of diluted earnings per share because their effect would be antidilutive.

Restricted Cash

The following summarizes the composition of restricted cash:

June 30, 2025 June 30, 2024 March 31, 2025

September 30, 2025 September 30, 2024 March 31, 2025

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

5 unchanged sentences

The following summarizes the composition of inventories, net:

June 30, 2025 June 30, 2024 March 31, 2025

September 30, 2025 September 30, 2024 March 31, 2025

Processed tobacco $ 710,984 $ 750,552 $ 490,410

4 unchanged sentences

Equity Method Investments

The following summarizes the Company's equity method investments as of June 30, 2025:

The following summarizes the Company's equity method investments as of September 30, 2025:

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

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Statement of operations:

1 unchanged sentence

Gross profit 12,724 12,528 19,776 19,715

Net (loss) income ( 2,666 ) 5,239

June 30, 2025 June 30, 2024 March 31, 2025

Net income (loss) 1,715 1,182 ( 951 ) 6,421

September 30, 2025 September 30, 2024 March 31, 2025

Balance sheet:

7 unchanged sentences

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

June 30, 2025 June 30, 2024 March 31, 2025

September 30, 2025 September 30, 2024 March 31, 2025

Investments in variable interest entities $ 89,753 $ 97,673 $ 90,239

3 unchanged sentences

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

June 30, 2025

September 30, 2025

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

4 unchanged sentences

Total $ 49,019 $ ( 22,745 ) $ 26,274

June 30, 2024

September 30, 2024

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

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Amortization expense $ 1,113 $ 1,140 $ 2,233 $ 2,292

1 unchanged sentence

The following summarizes debt and notes payable:

(in thousands) Interest Rate June 30, 2025 June 30, 2024 March 31, 2025

Interest Rate September 30, 2025 September 30, 2024 March 31, 2025

Senior secured credit facilities:

3 unchanged sentences

8.5 % Notes Due 2027 (2)

146,250 145,445 145,820

14 unchanged sentences

Letters of credit $ 9,034 $ 7,785 $ 7,790

(1) Weighted average stated rate for the trailing twelve months ended June 30, 2025 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 stated rate for the trailing twelve months ended September 30, 2025 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 $ 146,250 is net of a debt discount of $ 2,089 .

7 unchanged sentences

ABL Credit Facility

On February 8, 2022, the Company’s wholly owned subsidiary, Pyxus Holdings, Inc.

The 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.

1 unchanged sentence

The ABL Credit Agreement was amended on May 12, 2025 to, among other things increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility to $ 150,000 , and to extend the maturity to May 12, 2030 or, if earlier, 90 days prior to the earliest stated maturity date of the outstanding senior secured notes and the senior secured term loans (each currently scheduled to mature on December 31, 2027).

A detailed description of the ABL Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 .

At June 30, 2025, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.

At September 30, 2025, 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

On February 6, 2023, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent.

The Intabex Term Loan Credit Agreement established a term loan credit facility in an aggregate principal amount of approximately $ 189,033 (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings, accrued and unpaid PIK interest thereon, and related fees.

The Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan Credit Agreement"), is by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent.

The Intabex Term Loan Credit Agreement established a term loan

credit facility in an aggregate principal amount of approximately $ 189,033 (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings, accrued and unpaid PIK interest thereon, and related fees.

The Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum.

The Intabex Term Loans are stated to mature on December 31, 2027.

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, 2025.

At June 30, 2025, 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 September 30, 2025, 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

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 $ 130,550 (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings and applicable accrued and unpaid PIK interest thereon.

The Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan Credit Agreement"), is by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent.

It established a term loan credit facility in an aggregate principal amount of approximately $ 130,550 (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings and applicable accrued and unpaid PIK interest thereon.

The Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum.

The Pyxus Term Loans are stated to mature on December 31, 2027.

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, 2025.

At June 30, 2025, 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 September 30, 2025, 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

2 unchanged sentences

The 2027 Notes bear interest at a rate of 8.5 % per annum, which interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

The 2027 Notes are stated to mature on December 31, 2027.

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, 2025.

At June 30, 2025, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

At September 30, 2025, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

Detailed descriptions of the instruments governing the Company's outstanding senior secured debt are included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

Related Party Transactions

8 unchanged sentences

The Debt Repurchase Agreement and the transactions contemplated thereunder 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 Pyxus.

Refer to " Note 18.

See " Note 18.

Related Party Transactions " for additional information.

Other Outstanding Debt

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 $ 20,442 , which included $ 51 for accrued and unpaid interest, to retire the 2024 Notes.

Foreign Seasonal Lines of Credit

5 unchanged sentences

Certain of the 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 June 30, 2025, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 144,010 .

As of June 30, 2025, the aggregate amount available for borrowing under the seasonal lines of credit was $ 171,220 .

At June 30, 2025, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 1,025,240 , 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 June 30, 2025, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

At September 30, 2025, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 1,067,446 , subject to limitations under the ABL Credit Agreement and the agreements governing the Intabex Term Loans, the Pyxus Term Loans, and the 2027 Notes.

As of September 30, 2025, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 170,000 .

As of September 30, 2025, the aggregate amount available for borrowing under the seasonal lines of credit was $ 162,812 .

At September 30, 2025, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

Securitized Receivables

4 unchanged sentences

The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5 % of serviced receivables per annum.

As the Company estimates the expected fee it receives in return for its obligation to service these receivables is at fair value, no servicing assets or liabilities are recognized.

The Company estimates the expected fee it receives in return for its obligation to service these receivables reflects fair value, and accordingly, no servicing assets or liabilities are recognized.

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

As of June 30, 2025, the investment limit of this facility was $ 120,000 of trade receivables.

As of September 30, 2025, 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 June 30, 2025, the investment limit under the second facility was $ 160,000 of trade receivables.

As of September 30, 2025, the investment limit under the second facility was $ 160,000 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 June 30, 2025 and 2024, and March 31, 2025, trade

receivables, net in the condensed consolidated balance sheets has been reduced by $ 1,056 , $ 8,219 , and $ 2,190 as a result of the net settlement, respectively.

Refer to " Note 15.

As of September 30, 2025 and 2024, and March 31, 2025, trade receivables, net in the condensed consolidated balance sheets has been reduced by $ 4,742 , $ 11,093 , and $ 2,190 as a result of the net settlement, respectively.

As of September 30, 2025 and 2024, accrued expenses and other current liabilities in the condensed consolidated balance sheets includes $ 5,463 and $ 1,735 of net payables for the Finacity Facility.

See " Note 15.

Fair Value Measurements " for additional information.

Under the other facilities, the Company offers trade receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions.

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 June 30, 2025, the investment limits under these other facilities were variable based on qualifying sales.

As of September 30, 2025, 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:

June 30, 2025 June 30, 2024 March 31, 2025

September 30, 2025 September 30, 2024 March 31, 2025

Receivables outstanding in facility $ 118,241 $ 126,298 $ 355,246

3 unchanged sentences

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

Three Months Ended

Six Months Ended

September 30,

Cash proceeds:

1 unchanged sentence

Deferred purchase price 108,811 101,597

In certain markets, the Company guarantees bank loans for suppliers to finance their crops.

The Company also guarantees bank loans of certain unconsolidated subsidiaries.

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

June 30, 2025 June 30, 2024 March 31, 2025

In certain sourcing regions, the Company guarantees bank loans for tobacco suppliers to finance their crops.

The Company also guarantees bank loans of certain unconsolidated affiliates.

The fair value of the Company's guarantees is recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets.

See " Note 15.

Fair Value Measurements " for the fair value of the Company's guarantee liability and corresponding fair value classification.

The following summarizes amounts guaranteed:

September 30, 2025 September 30, 2024 March 31, 2025

Amounts guaranteed (not to exceed) $ 86,958 $ 47,461 $ 110,660

1 unchanged sentence

25,617 22,700 80,045

Fair value of guarantees 3,287 2,611 6,459

Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 140 101 13,787

(1) Most of the guarantees outstanding at June 30, 2025 expire within one year .

(1) Most of the guarantees outstanding at September 30, 2025 expire within one year .

Derivative Financial Instruments

The Company uses forward or option currency contracts to manage risks associated with foreign currency exchange rates on foreign operations.

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

The Company recorded a net gain of $ 1,868 and $ 851 from its derivative financial instruments in cost of goods and services sold for the three months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and 2024, and March 31, 2025, the Company recorded current derivative assets of $ 1,322 , $ 0 , and $ 982 included within other current assets, and current derivative liabilities of $ 0 , $ 1,834 , and $ 57 , included within accrued expenses and other current liabilities, respectively.

Refer to " Note 15.

Fair Value Measurements " for additional information.

The Company is exposed to foreign currency exchange rate risk related to our international operations.

Principal currencies hedged include the Brazilian real and the Malawian kwacha.

The Company uses forward or option currency contracts to manage risks associated with changes in foreign currency exchange rates.

These derivative contracts are either designated as cash flow hedges of forecasted transactions for the purchase of green tobacco, other processing-related costs, and selling, general, and administrative expenses, or are not designated as hedging instruments because they are used to partially offset the immediate earnings impact of exchange rate risk on certain foreign currency denominated transactions.

As of September 30, 2025, there were no outstanding derivative financial instruments.

As of September 30, 2024 and March 31, 2025, the Company's derivative financial instruments outstanding were designated as cash flow hedges.

Derivative assets and liabilities are recorded in other current assets and accrued expenses and other current liabilities, respectively, within our condensed consolidated balance sheets.

See " Note 15.

Fair Value Measurements " for the fair values of the Company's outstanding derivative assets and liabilities and corresponding fair value classifications.

The following summarizes the U.S.

Dollar notional amount of derivative contracts outstanding:

June 30, 2025 June 30, 2024 March 31, 2025

Dollar notional outstanding $ 14,250 $ 23,300 $ 49,500

September 30, 2025 September 30, 2024 March 31, 2025

Foreign currency exchange contracts $ — $ 39,600 $ 49,500

The following summarizes the pre-tax effects of derivative financial instruments in the condensed consolidated statements of comprehensive (loss) income and the condensed consolidated statements of operations:

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Foreign currency exchange contracts designated as cash flow hedges:

Gain (loss) recognized in accumulated other comprehensive income (1)

$ ( 148 ) $ 1,139 $ 3,206 $ ( 997 )

Gain (loss) reclassified from accumulated other comprehensive income to earnings (2)

1,392 ( 412 ) 2,539 439

Foreign currency exchange contracts not designated as hedging instruments:

Gain recognized in earnings (2)

$ 1,966 $ — $ 2,687 $ —

(1) Amount represents the change in fair value of derivative financial instruments.

(2) These gains (losses) are recognized in cost of goods and services sold within the condensed consolidated statements of operations.

(3) There were foreign currency exchange contracts not designated as hedging instruments outstanding during the three and six months ended September 30, 2025, but all had expired or settled by period end.

Fair Value Measurements

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

June 30, 2025 June 30, 2024 March 31, 2025

September 30, 2025 September 30, 2024 March 31, 2025

Level 2 Level 3 Total

14 unchanged sentences

Three Months Ended

June 30, 2025 June 30, 2024

September 30, 2025 September 30, 2024

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

4 unchanged sentences

Balance, end of period $ 4,742 $ — $ 843 $ 11,093 $ 91 $ 284

For the three months ended June 30, 2025 and 2024, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 633 and $ 1,250 , respectively.

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

Six Months Ended

September 30, 2025 September 30, 2024

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

Balance, beginning of period $ 29,354 $ 12 $ 6,459 $ 15,036 $ 160 $ 5,097

Issuances 79,009 — 817 118,439 — 1,330

Settlements ( 101,188 ) ( 12 ) ( 3,758 ) ( 114,529 ) ( 69 ) ( 2,395 )

Losses recognized in earnings ( 2,433 ) — ( 2,675 ) ( 7,853 ) — ( 3,748 )

Balance, end of period $ 4,742 $ — $ 843 $ 11,093 $ 91 $ 284

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 June 30, 2025, the assessment for intrastate trade tax credits taken is $ 2,419 and the total assessment including penalties and interest is $ 10,408 .

At September 30, 2025, the assessment for intrastate trade tax credits taken is $ 2,482 and the total assessment including penalties and interest is $ 10,820 .

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

7 unchanged sentences

Amended and Restated 2020 Incentive Plan (the "Incentive Plan"), a total of 3,612 shares (which amounts are presented in thousands) have been authorized for grants of equity-based awards to certain employees and non-employee directors.

During the three months ended June 30, 2025 and 2024, the Company recognized total equity-based compensation expense of $ 237 and $ 3,031 , respectively, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations.

The amount recorded during the three months ended June 30, 2024 included the impact of a cumulative catch-up adjustment due to the modification on May 10, 2024 of awards then outstanding under the Incentive Plan.

Restricted Stock Units

Restricted stock units granted under the Incentive Plan are earned ratably for certain employees, subject to their continued employment, from the date of the award to March 31, 2027, and for certain non-employee directors, subject to continued board service, from the date of the award to August 14, 2025.

Restricted stock units vest upon the earlier of March 31, 2031 or the occurrence of a change-in-control event or a liquidity event as such terms are defined under the restricted stock unit award agreement.

2 unchanged sentences

Nonvested, March 31, 2025 1,724 $ 3.46

Granted 30 5.10

Canceled or forfeited ( 23 ) 3.50

Nonvested, June 30, 2025

Unrecognized compensation cost for restricted stock units is $ 1,532 as of June 30, 2025, and is expected to be recognized over a weighted average period of 1.75 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.

Nonvested, September 30, 2025 1,731 $ 3.49

The following summarizes equity-based compensation expense for restricted stock units, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations:

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Equity-based compensation expense $ 256 $ 601 $ 493 $ 3,632

The amount recorded during the six months ended September 30, 2024 included the impact of a cumulative catch-up adjustment due to the modification on May 10, 2024 of awards then outstanding under the Incentive Plan.

Unrecognized compensation cost for restricted stock units is $ 1,430 as of September 30, 2025, and is expected to be recognized over a weighted average period of 1.52 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.

Performance-Based Stock Units

Under the terms of the performance-based stock units, the amount of shares to be issued to certain employees (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 June 30, 2025, and accordingly, no equity-based compensation expense has been recognized for performance-based stock units.

The contingent liquidity event is not probable as of September 30,

2025, and accordingly, no equity-based compensation expense has been recognized for performance-based stock units.

The following summarizes activity for performance-based stock units (at the target performance level):

1 unchanged sentence

Nonvested, March 31, 2025 553 $ 4.36

Granted 23 6.79

Canceled or forfeited ( 26 ) 4.36

Nonvested, June 30, 2025

Nonvested, September 30, 2025 549 $ 4.46

Related Party Transactions

1 unchanged sentence

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

Three Months Ended

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Sales $ 10,930 $ 3,966 $ 19,985 $ 14,541

1 unchanged sentence

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

June 30, 2025 June 30, 2024 March 31, 2025 Location in Condensed Consolidated Balance Sheet

September 30, 2025 September 30, 2024 March 31, 2025 Location in Condensed Consolidated Balance Sheet

Accounts receivable, related parties $ 5,014 $ 50 $ 50 Other receivables

11 unchanged sentences

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 three months ended June 30, 2025.

Debt Arrangements ," during the six months ended September 30, 2025.

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 June 30, 2025 and 2024, and March 31, 2025, includes $ 1,499 , $ 1,894 , and $ 1,600 , 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 $ 5,466 and $ 7,261 for the three months ended June 30, 2025 and 2024, 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 September 30, 2025 and 2024, and March 31, 2025, includes $ 1,403 , $ 1,624 , and $ 1,600 , 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 $ 5,510 and $ 10,976 for the three and six months ended September 30, 2025, respectively, and $ 5,945 and $ 13,206 for the three and six months ended September 30, 2024, 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.

5 unchanged sentences

Upon completion of the transactions under the Debt Repurchase Agreement, the Monarch Investor is no longer a holder of the 2027 Notes and the Pyxus Term Loans.

The Monarch Investor remains a related party as a holder of the Intabex Term Loan and a beneficial owner of more than five percent of the outstanding shares of common stock of the Company.

The Monarch Investor remains a related party as a holder of a portion of the Intabex Term Loans and a beneficial owner of more than five percent of the Company's common stock outstanding.

Segment Information

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

Three Months Ended Six Months Ended

September 30, September 30,

2025 2024 2025 2024

Sales and other operating revenues:

20 unchanged sentences

Interest expense, net 37,922 35,750 67,689 69,022

(Loss) income before income taxes and other items $ ( 8,767 ) $ 8,508

Income before income taxes and other items $ 8,806 $ 4,183 $ 39 $ 12,691

(1) Represents the other expense, net caption within the condensed consolidated statements of operations.

Three Months Ended

September 30,

Leaf All Other Total Leaf All Other Total

1 unchanged sentence

Capital expenditures 5,867 348 6,215 4,177 768 4,945

June 30, 2025 June 30, 2024 March 31, 2025

Six Months Ended

September 30,

Leaf All Other Total Leaf All Other Total

Depreciation and amortization $ 9,613 $ 754 $ 10,367 $ 9,407 $ 785 $ 10,192

Capital expenditures 7,875 1,004 8,879 8,270 1,023 9,293

September 30, 2025 September 30, 2024 March 31, 2025

Leaf All Other Total Leaf All Other Total Leaf All Other Total

1 unchanged sentence

Trade and other receivables, net 213,751 491 214,242 236,995 506 237,501 204,054 175 204,229

Equity in net assets of investee companies 89,198 6,461 95,659 96,912 6,906 103,818 90,238 6,690 96,928

Investments in unconsolidated affiliates 89,752 6,504 96,256 97,683 6,720 104,403 90,238 6,690 96,928

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