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Monday, February 11, 2019

=Pyxus Int'l (PYX) reported earnings on Mon 11 Feb 2019 (a/h)

The company was formerly known as Alliance One International, Inc. and changed its name to Pyxus International, Inc. in September 2018. Pyxus International, Inc. was founded in 1873 and is based in Morrisville, North Carolina.

Pyxus Int'l reports Q4 results 

  • Q4 GAAP EPS ($0.56), EBITDA -8% to $55 million; rev +10% to $524.5 million (no estimates). This increase was primarily due to a 14.2% increase in volume attributable to larger crop sizes in Africa. This increase was partially offset by delayed tobacco shipments in South America, lower volume in North America attributable to Hurricane Florence reducing the U.S. crop size and foreign tariffs on U.S. tobacco, and a decrease in average sales price of 6.1%.
  • Based on the current outlook for the remainder of fiscal year 2019, the company now expects revenue to be in a range of approximately $1.8 billion to $1.9 billion with Adjusted EBITDA in a range of approximately $150.0 million to $160.0 million.
The market got very excited after the company started acquiring cannabis operators.

The tobacco industry offers small margins, and the business growth is not impressive. Thus, acquiring companies operating in the high growth marijuana industry makes sense.

However, investors need to understand very well that Pyxus is a tobacco company with a minor investment made in a few cannabis operators.

The company does not seem to have sufficient financial force to acquire many companies and radically transform itself. The main issue is the company’s debt and its contractual obligations.

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