PYXUS INTERNATIONAL, INC. 10-Q

Item 1. Financial Statements Pyxus International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, (in thousands, except per share data) 2026 2025 Sales and other operating revenues $ 437,795 $ 508,815 Cost of goods and services sold 376,381 443,189 Gross profit 61,414 65,626 Selling, general, and administrative expenses 43,935 40,369 Other expense, net 1,257 4,176 Restructuring and asset impairment charges 557 81 Operating income 15,665 21,000 Interest expense, net 29,842 29,767 Loss before income taxes and other items ( 14,177 ) ( 8,767 ) Income tax (benefit) expense ( 5,716 ) 5,227 Income (loss) from unconsolidated affiliates, net 1,422 ( 1,269 ) Net loss ( 7,039 ) ( 15,263 ) Net income attributable to noncontrolling interests 241 562 Net loss attributable to Pyxus International, Inc. $ ( 7,280 ) $ ( 15,825 ) Loss per share: Basic $ ( 0.28 ) $ ( 0.62 ) Diluted $ ( 0.28 ) $ ( 0.62 ) Weighted average number of shares outstanding: Basic 26,056 25,670 Diluted 26,056 25,670 See accompanying notes to condensed consolidated financial statements. 3 Pyxus International, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Loss (Unaudited) Three Months Ended June 30, (in thousands) 2026 2025 Net loss $ ( 7,039 ) $ ( 15,263 ) Other comprehensive income, net of tax: Foreign currency translation adjustment ( 114 ) 2,039 Cash flow hedges 589 1,457 Total other comprehensive income, net of tax $ 475 $ 3,496 Total comprehensive loss ( 6,564 ) ( 11,767 ) Comprehensive income attributable to noncontrolling interests 241 562 Comprehensive loss attributable to Pyxus International, Inc. $ ( 6,805 ) $ ( 12,329 ) See accompanying notes to condensed consolidated financial statements. 4 Pyxus International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (in thousands) June 30, 2026 June 30, 2025 March 31, 2026 Assets Current assets Cash and cash equivalents $ 175,907 $ 96,437 $ 134,337 Restricted cash 3,642 4,945 3,316 Trade receivables, net 175,667 206,607 239,456 Other receivables 10,897 16,683 25,451 Inventories, net 1,104,637 1,121,788 817,950 Advances to tobacco suppliers, net 88,132 61,737 36,337 Recoverable income taxes 14,366 11,670 2,886 Prepaid expenses 59,366 50,011 49,000 Other current assets 20,334 21,123 21,751 Total current assets 1,652,948 1,591,001 1,330,484 Investments in unconsolidated affiliates 96,174 95,659 105,863 Intangible assets, net 22,984 27,387 24,076 Deferred income taxes, net 14,620 13,181 14,507 Long-term recoverable income taxes 10,157 4,956 9,467 Other noncurrent assets 44,082 39,315 35,424 Right-of-use assets 34,858 32,033 31,717 Property, plant, and equipment, net 141,431 136,993 143,154 Total assets $ 2,017,254 $ 1,940,525 $ 1,694,692 Liabilities and Stockholders’ Equity Current liabilities Notes payable $ 828,553 $ 880,925 $ 477,132 Accounts payable 114,644 124,341 146,828 Advances from customers 166,718 87,374 174,995 Accrued expenses and other current liabilities 131,506 104,162 114,760 Income taxes payable 10,838 10,449 9,145 Operating leases payable 10,064 9,565 9,915 Total current liabilities 1,262,323 1,216,816 932,775 Long-term taxes payable 4,807 6,195 4,112 Long-term debt 456,020 455,091 455,757 Deferred income taxes 8,128 8,902 11,961 Liability for unrecognized tax benefits 29,507 21,935 28,074 Long-term leases 22,044 19,541 21,020 Pension, postretirement, and other long-term liabilities 59,600 57,805 59,886 Total liabilities $ 1,842,429 $ 1,786,285 $ 1,513,585 Commitments and contingencies Stockholders’ equity Common Stock— no par value: Authorized shares ( 250,000 for all periods) Issued and outstanding shares ( 24,608 for all periods) $ 394,203 $ 393,136 $ 393,921 Retained deficit ( 232,836 ) ( 255,950 ) ( 225,556 ) Accumulated other comprehensive income 6,598 10,811 6,123 Total stockholders’ equity of Pyxus International, Inc. 167,965 147,997 174,488 Noncontrolling interests 6,860 6,243 6,619 Total stockholders’ equity 174,825 154,240 181,107 Total liabilities and stockholders’ equity $ 2,017,254 $ 1,940,525 $ 1,694,692 See accompanying notes to condensed consolidated financial statements. 5 Pyxus International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders' Equity (Unaudited) Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interests Total Stockholders' Equity Balance, March 31, 2026 $ 393,921 $ ( 225,556 ) $ ( 5,109 ) $ 10,224 $ 1,008 $ 6,619 $ 181,107 Net (loss) income — ( 7,280 ) — — — 241 ( 7,039 ) Equity-based compensation 282 — — — — — 282 Other comprehensive (loss) income, net of tax — — ( 114 ) — 589 — 475 Balance, June 30, 2026 $ 394,203 $ ( 232,836 ) $ ( 5,223 ) $ 10,224 $ 1,597 $ 6,860 $ 174,825 Balance, March 31, 2025 $ 392,899 $ ( 240,125 ) $ ( 6,045 ) $ 12,516 $ 844 $ 5,681 $ 165,770 Net (loss) income — ( 15,825 ) — — — 562 ( 15,263 ) Equity-based compensation 237 — — — — — 237 Other comprehensive income, net of tax — — 2,039 — 1,457 — 3,496 Balance, June 30, 2025 $ 393,136 $ ( 255,950 ) $ ( 4,006 ) $ 12,516 $ 2,301 $ 6,243 $ 154,240 See accompanying notes to condensed consolidated financial statements. 6 Pyxus International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended June 30, (in thousands) 2026 2025 Operating Activities: Net loss $ ( 7,039 ) $ ( 15,263 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,628 5,169 Debt amortization/interest 2,079 2,592 Loss on foreign currency transactions 801 7,725 Equity-based compensation 282 237 Income (loss) from unconsolidated affiliates, net of dividends 9,689 1,269 Changes in operating assets and liabilities, net Trade and other receivables 9,568 ( 52,367 ) Inventories and advances to tobacco suppliers ( 339,578 ) ( 388,020 ) Deferred items ( 1,950 ) 4,529 Recoverable income taxes ( 12,337 ) ( 4,477 ) Payables and accrued expenses ( 13,776 ) 393 Advances from customers ( 6,747 ) ( 49,806 ) Prepaid expenses ( 7,628 ) ( 2,660 ) Income taxes 1,490 ( 838 ) Other operating assets and liabilities 482 2,000 Other, net ( 672 ) ( 5,770 ) Net cash used in operating activities $ ( 359,708 ) $ ( 495,287 ) Investing Activities: Purchases of property, plant, and equipment $ ( 4,186 ) $ ( 4,279 ) Collections from beneficial interests in securitized trade receivables 58,540 41,007 Other, net 233 913 Net cash provided by investing activities $ 54,587 $ 37,641 Financing Activities: Net proceeds from short-term borrowings $ 353,603 $ 476,945 Proceeds from revolving loan facilities 45,000 81,000 Repayment of revolving loan facilities ( 45,000 ) ( 81,000 ) Debt issuance costs ( 5,134 ) ( 2,825 ) Other, net — 361 Net cash provided by financing activities $ 348,469 $ 474,481 Effect of exchange rate changes on cash ( 1,452 ) ( 997 ) Increase in cash, cash equivalents, and restricted cash 41,896 15,838 Cash and cash equivalents at beginning of period 134,337 78,254 Restricted cash at beginning of period 3,316 7,290 Cash, cash equivalents, and restricted cash at end of period $ 179,549 $ 101,382 Other information: Cash paid for income taxes, net $ 3,886 $ 2,609 Cash paid for interest, net 27,108 25,988 Noncash investing activities: Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction 28,595 30,017 See accompanying notes to condensed consolidated financial statements. 7 Pyxus International, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) (in thousands, except per share data) Page No. Note 1 Basis of Presentation and Summary of Significant Accounting Policies 9 Note 2 New Accounting Standards 9 Note 3 Revenue Recognition 10 Note 4 Income Taxes 10 Note 5 Loss Per Share 10 Note 6 Trade Receivables, Net 11 Note 7 Inventories, Net 11 Note 8 Equity Method Investments 11 Note 9 Variable Interest Entities 12 Note 10 Intangible Assets, Net 12 Note 11 Debt Arrangements 14 Note 12 Securitized Receivables 15 Note 13 Guarantees 17 Note 14 Derivative Financial Instruments 17 Note 15 Fair Value Measurements 18 Note 16 Contingencies and Other Information 18 Note 17 Equity-Based Compensation 19 Note 18 Related Party Transactions 20 Note 19 Segment Information 21 8 1. Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated interim financial statements represent the consolidation of Pyxus International, Inc. (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. GAAP") for interim information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the normal and recurring adjustments necessary for a fair presentation of the results of operations, financial position, and cash flows have been included. These condensed consolidated interim financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026 filed on June 4, 2026. The year-end condensed consolidated balance sheet data was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. Due to the seasonal nature of the Company’s business, the results of operations for a fiscal quarter are not necessarily indicative of the operating results that may be attained for other quarters or a full fiscal year. 2. New Accounting Standards Accounting Pronouncements Not Yet Adopted In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Disaggregation of Income Statement Expenses , which requires a tabular disclosure of relevant expense captions into prescribed natural expense categories. The annual disclosure requirements are effective for the Company’s fiscal year ending March 31, 2028, and the interim period disclosure requirements are effective beginning April 1, 2028. Early adoption is permitted. 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 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 , which replaces 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. In November 2025, the FASB issued ASU No. 2025-09, Hedge Accounting Improvements , to clarify certain aspects of existing hedge accounting guidance, and to more closely align hedge accounting with the economics of an entity's risk management activities. This amendment is effective for the Company’s annual and interim periods beginning April 1, 2027 and requires adoption on a prospective basis. 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. In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. This new guidance is effective for the Company’s fiscal year beginning April 1, 2029, including interim periods within that fiscal year. 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. 9 3. Revenue Recognition Product revenues are primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During such processing, ownership remains with the customers. All Other revenue is primarily composed of revenue from the sale of non-tobacco agriculture products. 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 June 30, 2026 2025 Leaf: Product revenues $ 392,976 $ 458,238 Processing and other revenues 42,836 50,177 Leaf sales and other operating revenues 435,812 508,415 All Other: All Other sales and other operating revenues 1,983 400 Total sales and other operating revenues $ 437,795 $ 508,815 4. Income Taxes The Company’s (benefit from) provision for income taxes for the three months ended June 30, 2026 and 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax loss and adjusting for discrete items that occurred during the period. The effective tax rate for the three months ended June 30, 2026 and 2025 was a benefit of 40.3 % and an expense of 59.6 %, respectively. For the three months ended June 30, 2026, the difference between the Company's effective tax rate and the U.S. statutory rate of 21.0% is primarily due to a tax benefit related to foreign currency losses and the jurisdictional mix of earnings, partially offset by an increase in the Company’s deferred tax valuation allowance. 5. Loss Per Share The following summarizes the computation of loss per share: Three Months Ended June 30, 2026 2025 Net loss attributable to Pyxus International, Inc. $ ( 7,280 ) $ ( 15,825 ) Basic weighted average shares outstanding 26,056 25,670 Plus: Dilutive equity awards (1) — — Diluted weighted average shares outstanding 26,056 25,670 Loss per share: Basic $ ( 0.28 ) $ ( 0.62 ) Diluted $ ( 0.28 ) $ ( 0.62 ) (1) For the three months ended June 30, 2026 and 2025, 34 shares and 264 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. 10 6. Trade Receivables, Net Trade receivables are net of an allowance for expected credit losses. The following summarizes activity in the allowance for expected credit losses: Three Months Ended June 30, 2026 2025 Balance, beginning of period $ ( 16,879 ) $ ( 24,035 ) Write-offs and other adjustments 431 ( 264 ) Balance, end of period ( 16,448 ) ( 24,299 ) Trade receivables 192,115 230,906 Trade receivables, net $ 175,667 $ 206,607 7. Inventories, Net The following summarizes the composition of inventories, net, with the All Other category primarily composed of non-tobacco agricultural products: June 30, 2026 June 30, 2025 March 31, 2026 Processed tobacco $ 671,617 $ 575,922 $ 507,380 Unprocessed tobacco 393,542 513,882 279,348 Other tobacco related 27,847 26,089 26,883 All Other 11,631 5,895 4,339 Total $ 1,104,637 $ 1,121,788 $ 817,950 8. Equity Method Investments The following summarizes the Company's equity method investments as of June 30, 2026: Investee Name Location Primary Purpose Ownership Percentage Basis Difference (1) Adams International Ltd. Thailand Purchase and process tobacco 49 % $ ( 4,526 ) Alliance One Industries India Private Ltd. India Purchase and process tobacco 49 % ( 5,770 ) China Brasil Tabacos Exportadora S.A. Brazil Purchase and process tobacco 49 % 43,000 Oryantal Tütün Paketleme Sanayi ve Ticaret A.Ş. Turkey Process tobacco 50 % ( 416 ) Purilum, LLC U.S. Produce flavor formulations and consumable nicotine products 50 % 4,589 Siam Tobacco Export Corporation Ltd. Thailand Purchase and process tobacco 49 % ( 6,098 ) (1) Basis differences for the Company's equity method investments are due to fair value adjustments recorded during fiscal 2021. The following summarizes financial information for these equity method investments: Three Months Ended June 30, 2026 2025 Statement of operations: Sales $ 52,156 $ 46,504 Gross profit 6,256 7,052 Net income (loss) 3,007 ( 2,666 ) 11 June 30, 2026 June 30, 2025 March 31, 2026 Balance sheet: Current assets $ 455,993 $ 510,324 $ 457,219 Property, plant, and equipment and other assets 67,568 51,932 65,716 Current liabilities 383,467 425,697 362,790 Long-term obligations and other liabilities 5,886 4,150 6,333 9. Variable Interest Entities The Company holds variable interests in multiple entities that primarily procure or process inventory or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The following summarizes the Company's financial relationships with its unconsolidated variable interest entities: June 30, 2026 June 30, 2025 March 31, 2026 Investments in variable interest entities $ 89,676 $ 89,200 $ 99,239 Receivables with variable interest entities 1,913 1,469 — Guaranteed amounts to variable interest entities (not to exceed) 18,449 15,968 18,483 10. Intangible Assets, Net The gross carrying amount and accumulated amortization of intangible assets consist of the following: June 30, 2026 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 6.2 years $ 26,101 $ ( 12,688 ) $ 13,413 Technology 2.2 years 11,618 ( 8,639 ) 2,979 Trade names 8.2 years 11,300 ( 4,708 ) 6,592 Total $ 49,019 $ ( 26,035 ) $ 22,984 June 30, 2025 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 7.2 years $ 26,101 $ ( 10,513 ) $ 15,588 Technology 3.1 years 11,618 ( 7,218 ) 4,400 Trade names 9.2 years 11,300 ( 3,901 ) 7,399 Total $ 49,019 $ ( 21,632 ) $ 27,387 12 March 31, 2026 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 6.4 years $ 26,101 $ ( 12,144 ) $ 13,957 Technology 2.4 years 11,618 ( 8,292 ) 3,326 Trade names 8.4 years 11,300 ( 4,507 ) 6,793 Total $ 49,019 $ ( 24,943 ) $ 24,076 The following summarizes amortization expense for definite-lived intangible assets: Three Months Ended June 30, 2026 2025 Amortization expense $ 1,092 $ 1,120 13 11. Debt Arrangements The following summarizes debt and notes payable: Interest Rate (1) June 30, 2026 June 30, 2025 March 31, 2026 Senior secured credit facility: ABL Credit Facility 6.7 % $ — $ — $ — Senior secured notes: 8.5 % Notes Due 2027 (2) 8.5 % 146,908 146,046 146,662 Senior secured term loans: Intabex Term Loans (3) 12.2 % 187,916 187,288 187,752 Pyxus Term Loans (4) 12.2 % 121,196 121,757 121,343 Other debt: Notes payable (5) 9.0 % 828,553 880,925 477,132 Total debt $ 1,284,573 $ 1,336,016 $ 932,889 Short-term (5) $ 828,553 $ 880,925 $ 477,132 Long-term 456,020 455,091 455,757 Letters of credit $ 8,273 $ 8,939 $ 8,024 (1) Weighted average stated rate for the trailing twelve months ended June 30, 2026 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 $ 146,908 is net of a debt discount of $ 1,431 . Total repayment at maturity is $ 148,339 . (3) Balance of $ 187,916 is net of a debt discount of $ 1,117 . Total repayment at maturity is $ 189,033 , which includes a $ 2,000 exit fee payable upon repayment. (4) Balance of $ 121,196 is net of a debt premium of $ 991 . Total repayment at maturity is $ 120,205 . (5) Primarily foreign seasonal lines of credit. Outstanding Senior Secured Debt ABL Credit Facility 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. ("Pyxus Parent"), as parent guarantors, entered into an ABL Credit Agreement (as amended, the "ABL Credit Agreement"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, to establish an asset-based revolving credit facility (the "ABL Credit Facility"). The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $ 150,000 , subject to certain borrowing base limitations. 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 $ 170,000 . The ABL Credit Facility matures on 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). At June 30, 2026, 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 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 14 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. At June 30, 2026, 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 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. At June 30, 2026, 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 Pursuant to an exchange offer made by Pyxus Holdings and accepted by holders of approximately 92.7 % of the aggregate principal amount of the outstanding 10.0 % Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $ 260,452 in aggregate principal amount of 8.5 % Senior Secured Notes due December 31, 2027 (the "2027 Notes") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes. The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the "2027 Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent. 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. At June 30, 2026, 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, 2026. Other Outstanding Debt Foreign Seasonal Lines of Credit Excluding long-term credit agreements, the Company typically finances its foreign operations with committed and uncommitted short-term seasonal lines of credit arrangements with a number of banks. These operating lines are generally seasonal in nature, typically extending for a term of 180 days to 365 days corresponding to the tobacco crop cycle in that location. For uncommitted facilities, the lenders have the right to cease making loans and demand repayment of loans at any time or at specified dates. These loans are generally renewed at the outset of each tobacco season. 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. At June 30, 2026, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 1,170,392 , 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 June 30, 2026, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 150,630 . As of June 30, 2026, the aggregate amount available for borrowing under the seasonal lines of credit was $ 351,395 . At June 30, 2026, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term foreign seasonal lines of credit. 12. Securitized Receivables The Company sells trade receivables to unaffiliated financial institutions under various accounts receivable securitization facilities, two of which are subject to annual renewal. Under the first facility with Finacity Corporation (the "Finacity Facility"), the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100 % of the receivables to an unaffiliated financial institution. Following the sale and transfer of the receivables to the special purpose entity, 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, 15 including the right to pledge or sell the receivables. This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution. 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. 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. Under this facility, the Company may request a temporary increase in the investment limit up to an additional $ 40,000 , applicable only for the period from January 1, 2027 through May 31, 2027. As of June 30, 2026, 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. 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. 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, 2026, 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, 2026 and 2025, and March 31, 2026, trade receivables, net in the condensed consolidated balance sheets have been reduced by $ 10,817 , $ 1,056 , and $ 13,610 as a result of the net settlement, respectively. As of June 30, 2026 and 2025, and March 31, 2026, accrued expenses and other current liabilities in the condensed consolidated balance sheets include $ 15,681 , $ 0 , and $ 0 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, 2026, 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, applicable only to the first and second facilities, which represents the Company ’ s residual interest in receivables sold that have not been collected from the customer: June 30, 2026 June 30, 2025 March 31, 2026 Receivables outstanding in facility $ 121,227 $ 167,433 $ 341,679 Beneficial interests 10,817 16,103 29,034 Cash proceeds from the sale of trade receivables are comprised of an initial cash payment received at the time of transfer and a deferred purchase price receivable, applicable only to the first and second facilities, which represents the Company's right to receive the remaining consideration upon collection of the underlying trade receivables by the purchasers. The following summarizes the Company ’ s cash collections from both the initial cash proceeds and the deferred purchase price receivable: Three Months Ended June 30, 2026 2025 Cash collections from: Initial proceeds $ 91,144 $ 115,034 Deferred purchase price receivable 58,540 41,007 16 13. Guarantees In certain sourcing regions, the Company guarantees bank loans for suppliers to finance their crops. The Company also guarantees bank loans of certain unconsolidated affiliates. 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: June 30, 2026 June 30, 2025 March 31, 2026 Amounts guaranteed (not to exceed) $ 90,251 $ 83,519 $ 119,728 Amounts outstanding under guarantee (1) 56,974 47,948 92,550 Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 7,691 7,478 10,204 (1) The majority of the guarantees outstanding at June 30, 2026 expire within one year . 14. Derivative Financial Instruments The Company is exposed to foreign currency exchange rate risk related to its 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 June 30, 2026 and 2025, and March 31, 2026, the Company's derivative financial instruments outstanding were designated as cash flow hedges. 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, 2026 June 30, 2025 March 31, 2026 Foreign currency exchange contracts $ 49,267 $ 14,250 $ 54,100 The following summarizes the pre-tax effects of derivative financial instruments in the condensed consolidated statements of comprehensive loss and the condensed consolidated statements of operations: Three Months Ended June 30, 2026 2025 Foreign currency exchange contracts designated as cash flow hedges: Gain recognized in accumulated other comprehensive income (1) $ 1,298 $ 3,354 Gain reclassified from accumulated other comprehensive income to earnings (2) 406 1,147 Foreign currency exchange contracts not designated as hedging instruments: Gain recognized in earnings (2) $ — $ 721 (1) Amount represents the net change in fair value of derivative financial instruments. (2) These net gains are recognized in cost of goods and services sold within the condensed consolidated statements of operations. 17 15. Fair Value Measurements The following summarizes the financial assets and liabilities measured at fair value on a recurring basis, along with their corresponding level within the fair value hierarchy: June 30, 2026 June 30, 2025 March 31, 2026 Level 2 Level 3 Total at Fair Value Level 2 Level 3 Total at Fair Value Level 2 Level 3 Total at Fair Value Financial Assets: Derivative financial instruments $ 153 $ — $ 153 $ 1,322 $ — $ 1,322 $ 649 $ — $ 649 Securitized beneficial interests — 10,817 10,817 — 16,103 16,103 — 29,034 29,034 Total assets $ 153 $ 10,817 $ 10,970 $ 1,322 $ 16,103 $ 17,425 $ 649 $ 29,034 $ 29,683 Financial Liabilities: Derivative financial instruments $ 100 $ — $ 100 $ — $ — $ — $ — $ — $ — Long-term debt (1) 433,396 — 433,396 439,316 — 439,316 433,490 — 433,490 Guarantees — 4,524 4,524 — 3,287 3,287 — 7,537 7,537 Total liabilities $ 433,496 $ 4,524 $ 438,020 $ 439,316 $ 3,287 $ 442,603 $ 433,490 $ 7,537 $ 441,027 (1) This fair value measurement disclosure does not affect the condensed consolidated balance sheets. The following summarizes the changes in Level 3 instruments measured on a recurring basis: Three Months Ended June 30, 2026 June 30, 2025 Securitized Beneficial Interests Long-Term Debt Guarantees Securitized Beneficial Interests Long-Term Debt Guarantees Balance, beginning of period $ 29,034 $ — $ 7,537 $ 29,354 $ 12 $ 6,459 Issuances 28,595 — 1,695 30,431 — 300 Settlements ( 46,093 ) — ( 705 ) ( 42,023 ) ( 12 ) ( 1,242 ) Losses recognized in earnings ( 719 ) — ( 4,003 ) ( 1,659 ) — ( 2,230 ) Balance, end of period $ 10,817 $ — $ 4,524 $ 16,103 $ — $ 3,287 16. Contingencies and Other Information Brazilian Tax Credits 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, 2026, the assessment for intrastate trade tax credits taken is $ 2,550 and the total assessment including penalties and interest is $ 11,538 . 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. Other Matters In addition to the above-mentioned matter, the Company or certain of its subsidiaries are involved in other litigation or legal matters incidental to their business activities, including tax matters. While the outcome of these matters cannot be predicted with certainty, they are being vigorously defended and the Company does not currently expect that any of them will have a material adverse effect on its business or financial position. However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material. 18 17. Equity-Based Compensation Pursuant to the Pyxus International, Inc. 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. 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 the Company's next annual meeting of shareholders. 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. The following summarizes activity for restricted stock units: (in thousands, except grant date fair value) Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Nonvested, March 31, 2026 1,749 $ 3.49 Canceled or forfeited ( 8 ) 3.50 Nonvested, June 30, 2026 1,741 $ 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 June 30, 2026 2025 Equity-based compensation expense $ 282 $ 237 Unrecognized compensation cost for restricted stock units is $ 668 as of June 30, 2026, and is expected to be recognized over a weighted average period of 0.72 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, 2026, 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): (in thousands, except grant date fair value) Performance-Based Stock Units Weighted Average Grant Date Fair Value Per Share Nonvested, March 31, 2026 508 $ 4.47 Canceled or forfeited ( 19 ) 4.36 Nonvested, June 30, 2026 489 $ 4.47 19 18. Related Party Transactions The Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory. The following summarizes activities with the Company's equity method investees: Three Months Ended June 30, 2026 2025 Sales $ 7,791 $ 9,055 Purchases 20,385 27,309 Dividends 11,111 — The Company included the following related party balances in its condensed consolidated balance sheets: June 30, 2026 June 30, 2025 March 31, 2026 Location in Condensed Consolidated Balance Sheet Accounts receivable, related parties $ 1,963 $ 1,519 $ 62 Other receivables Accounts payable, related parties 11,933 18,286 39,317 Accounts payable Advances from related parties — 5,909 — Advances from customers Transactions with Significant Shareholders Based on a Schedule 13D/A filed with the SEC on June 13, 2024 by Glendon Capital Management, L.P. (the "Glendon Investor"), Holly Kim Olsen, Glendon Opportunities Fund, L.P. and Glendon Opportunities Fund II, L.P., the Glendon Investor reported beneficial ownership of 8,315 shares of the Company’s common stock, representing approximately 33.8 % of the outstanding shares of the Company’s common stock. A representative of the Glendon Investor serves as a director of Pyxus. Based on a Schedule 13D/A filed with the SEC on March 25, 2024, by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, the Monarch Investor reported beneficial ownership of 6,125 shares of the Company’s common stock, representing approximately 24.9 % of the outstanding shares of the Company’s common stock. An individual designated by the Monarch Investor serves as a director of Pyxus. Based on a Schedule 13G/A filed with the SEC on September 3, 2024 by Owl Creek Asset Management, L.P. and Jeffrey A. Altman, Owl Creek Asset Management, L.P. 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. During the three months ended June 30, 2026, 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/or the 2027 Notes, which are described in " Note 11. Debt Arrangements ." Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of June 30, 2026 and 2025, and March 31, 2026, include $ 1,246 , $ 1,499 , and $ 1,352 , respectively, of interest payable to Investor-Affiliated Funds. Interest expense as presented in the condensed consolidated statements of operations includes $ 5,182 and $ 5,466 for the three months ended June 30, 2026 and 2025, respectively, that relates to the Investor-Affiliated Funds. 20 19. Segment Information The following summarizes financial information relating to the Leaf segment (the Company's sole reportable segment), with the All Other category included for purposes of reconciliation of the Leaf segment balances to the condensed consolidated financial statements: Three Months Ended June 30, 2026 2025 Sales and other operating revenues: Leaf $ 435,812 $ 508,415 All Other 1,983 400 Consolidated sales and other operating revenues $ 437,795 $ 508,815 Cost of goods and services sold: Leaf $ 375,691 $ 443,386 All Other 690 ( 197 ) Consolidated cost of goods and services sold $ 376,381 $ 443,189 Selling, general, and administrative expenses: Leaf $ 42,631 $ 38,735 All Other 1,304 1,634 Consolidated selling, general, and administrative expenses $ 43,935 $ 40,369 Other segment items: (1) Leaf $ 1,497 $ 4,205 All Other ( 240 ) ( 29 ) Consolidated other segment items $ 1,257 $ 4,176 Leaf segment operating income $ 15,993 $ 22,089 All Other operating income (loss) 229 ( 1,008 ) Restructuring and asset impairment charges 557 81 Consolidated operating income $ 15,665 $ 21,000 Interest expense, net 29,842 29,767 Loss before income taxes and other items $ ( 14,177 ) $ ( 8,767 ) (1) Represents the other expense, net caption within the condensed consolidated statements of operations. Three Months Ended June 30, 2026 2025 Leaf All Other Total Leaf All Other Total Depreciation and amortization $ 5,237 $ 391 $ 5,628 $ 4,800 $ 369 $ 5,169 Capital expenditures 2,612 378 2,990 2,008 656 2,664 21 June 30, 2026 June 30, 2025 March 31, 2026 Leaf All Other Total Leaf All Other Total Leaf All Other Total Assets $ 1,975,994 $ 41,260 $ 2,017,254 $ 1,904,739 $ 35,786 $ 1,940,525 $ 1,660,016 $ 34,676 $ 1,694,692 Trade and other receivables, net 185,584 980 186,564 222,909 381 223,290 264,410 497 264,907 Investments in unconsolidated affiliates 89,676 6,498 96,174 89,198 6,461 95,659 99,239 6,624 105,863 22