Pyxus Intl Inc New

Good day, ladies and gentlemen, and welcome to today's PICSIS International FIScaGara 2023 First Quarter Results Conference Call. As a reminder, this call is being recorded. If you would like to participate in today's question and answer session, you must dial into the audio portion of today's conference. You may not ask a question via the web. I would now like to introduce your host for today's conference, Mr. Tomas Gregera. Mr. Gregera, you may begin.

Thank you, Lisa. With me this evening are Peter Sickle, our President and CEO, and Flavia Landsberg, our CFO. Before we begin discussing our financial results, I would like to cover a few points. You may hear statements during the course of this call that express a belief, expectation, or intention, as well as those that are not historical fact. These statements are forward-looking and involve a number of risks and uncertainties that may cause actual events and results to differ materially from these forward-looking statements. These risks and uncertainties are described in detail along with other risks and uncertainties in our filings with the SEC, including our most recent form 10-K. We do not undertake to update any forward-looking statements made on this conference call to reflect any changes in management's expectations or any change in assumptions or circumstances on which these statements are based. Included in our call today may be discussion of non-GAAP financial measurements, including earnings before interest, taxes, depreciation, and amortization, commonly referred to as EBITDA and adjusted EBITDA, that are not measures of results of operations under generally accepted accounting principles in the United States and should not be considered as an alternative to U.S. GAAP measurements. A table including a reconciliation of and other disclosures regarding these non-GAAP financial measures is available on our website at www.PIXIS.com. Any replay, rebroadcast, transcript, or other reproduction of this conference call, other than the replay as provided by Pixis International, has not been authorized and is strictly prohibited. Investors should be aware that any unauthorized reproduction of this conference call may not be an accurate reflection of its contents. Now I'll hand the call over to Peter.

Hello, everyone, and thank you for joining us this evening. We have experienced strong demand thus far in fiscal 2023. Our first quarter revenue was consistent with the prior fiscal year, driven by increased demand and more normalized timing of shipments from Asia, partially offset by the timing of shipments from Africa and South America. In addition, adjusted EBITDA increased compared to the prior fiscal year. As of June 30, 2022, our inventory increased $126 million compared to the prior year. This was primarily due to higher new crop green tobacco prices and processing costs in South America and accelerated new crop buying activities in certain key markets. Additionally, our processed tobacco inventory continues to be more than 90% committed to specific customers. The overall increase in inventory and our committed inventory levels for processed tobacco position us to meet near-term demand, and we expect to see stronger shipments in subsequent quarters in fiscal 2023, consistent with historical trends. Despite higher green tobacco prices and processing costs in South America, we were able to effectively manage our working capital to meet our purchasing goals for the current crop cycle. Crop sizes in certain markets in Africa, Asia, and South America are below expectations, due to the adverse impact of prevailing La Nina weather patterns during the growing season, which has exacerbated supply shortages. We continue to engage with customers in transparent dialogue regarding the impacts of inflation and La Nina on our business. In response to these and other market dynamics, we accelerated purchasing in certain key markets and continue to invest in research trials, local programs, and additional training for our global agronomy team. These actions further support our efforts to maximize grower efficiencies and yield despite unpredictable weather patterns. We continue to expect fiscal 2023 sales to be between $1.75 and $1.95 billion and adjusted EBITDA to be between $130 and $160 million. As we work to deliver stakeholder value, we're committed to recovering crop sizes, aligning volumes in future years with customer expectations, and together growing a better world.