PYXUS INTERNATIONAL, INC.

Red flags

• Total debt rose to $932.9 million from $849.9 million, while interest expense increased 5.0% to $134.4 million; operating income covered interest by only about 1.2x.
• $455.8 million of long-term debt is scheduled to mature in fiscal 2027, alongside $477.1 million of notes payable classified as short-term and described primarily as foreign seasonal credit lines.
• Net income attributable to Pyxus declined to $14.6 million from $15.2 million despite higher operating income, as interest expense, other expense, and income tax expense absorbed most operating profit.
• Inventory increased to $818.0 million from $762.0 million, including processed tobacco of $507.4 million and unprocessed tobacco of $279.3 million, as the market moved into oversupply.
• Income tax expense of $30.3 million exceeded income before taxes and other items of $28.6 million, further depressing reported earnings and cash-conversion visibility.