Pyxus Intl Inc New

We are about to begin. Good morning, ladies and gentlemen, and welcome to today's PICSIS International Fiscal Year 2025 Second Quarter Conference Call. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Tomas Gregeria. Mr. Gregeria, you may begin.

Thank you, operator. With me today is 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 change in management 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.pixus.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 will hand the call over to Peter.

Good morning, and thank you for joining us. We are pleased to have concluded a strong first half of fiscal 2025. and we've established the necessary foundation to capture stronger than expected performance at both the top and the bottom line. As a result, we are excited to increase our guidance for revenues to between $2.15 billion and $2.35 billion, and for adjusted EBITDA to be between $175 million and $195 million. Our dedicated team successfully leveraged our diverse global footprint to purchase the volumes needed to meet customer demand, while maintaining the operational discipline to protect margins. These capabilities also proved essential to managing and mitigating risk, particularly in the current market environment, positioning us to offset much of the short crops in North and South America with volumes from Asia and Africa. Market demand is healthy, and we have the inventory to serve a complex mix of business by customer and by region that enables our growth facilitates the capture of operating efficiencies, and optimizes returns on our working capital investments. We are well positioned to deliver a strong second half. Our process tobacco inventory increased compared to the prior year and is almost fully committed. Pricing negotiations for the Southern Hemisphere crop are largely complete, and that crop is expected to ship in the second half of the fiscal year. This insight, combined with potential opportunities later in the year, support our decision to increase our guidance for both the full year revenue and adjusted DBDA. Flavia will provide the details in a moment, but first I would like to share a few highlights on the first half and the second quarter. First half revenues were up by $99.8 million to $1.2 billion this year. And revenues in the second quarter were $566.3 million as compared to $624.3 million in the second quarter of fiscal 2024. This performance included seasonal revenue shifts and lower gross margin from a mix of revenue that included inventory purchase during El Nino market conditions in South America. Neither factor was a surprise, and we've been pleased to hold gross margin pressure to a minimum and to now expect improvement as the second half progresses. Turning to profitability, adjusted EBITDA for the second quarter was $44.3 million, below last year's $57.1 million. Adjusted EBITDA in the first half was $99.3 million, and comparable to last year's first half total of $100.8 million. We are pleased with our financial performance through the first half of the year, and excited to see the business accelerating into the second half. We expect improved profitability as we meet customer demand and convert our investments in inventory into revenues, operating profit, and cash flow. In short, we navigated a difficult environment well through the first half of the year. That has put us in a position to drive towards an excellent year. We adhered to a well-designed strategy, maintained our disciplined approach, and fought hard to ensure a number of successes that we knew were critical to capturing the strong second half and the full-year results we now expect. I'll reserve a few comments for closing. I would now like to turn the call over to Flavia Landsberg, our Chief Financial Officer.