{"url_path":"/sec/pyyx/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-04","source_url":"https://www.sec.gov/Archives/edgar/data/939930/0000939930-26-000017-index.html","accession_number":"0000939930-26-000017","cik":"0000939930","ticker":"PYYX","issuer_name":"PYXUS INTERNATIONAL, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/939930/0000939930-26-000017-index.html","primary_entity_key":"0000939930","primary_entity_name":"PYXUS INTERNATIONAL, INC."},"word_count":2383,"has_tables":true,"body_markdown":"Item 1. Business\n\nCompany Overview\n\nThis Annual Report on Form 10-K (this \"Annual Report\") is filed by Pyxus International, Inc. (the \"Company,\" \"Pyxus,\" \"we,\" \"us,\" or \"our\"). Pyxus is a global agricultural company with businesses having more than 150 years of experience delivering value-added products and services to customers. The Company is a trusted provider of responsibly sourced, independently verified, sustainable, and traceable products and ingredients, principally leaf tobacco. The Company has one reportable segment for financial reporting purposes: Leaf. An All Other category is included for purposes of reconciliation of the respective balances of the Leaf segment to the consolidated financial statements. All Other revenue is primarily composed of revenue from the sale of non-tobacco agricultural products. See \"[Note 1. Basis of Presentation and Summary of Significant Accounting Policies](#i6f44eae8422d46cd9f377051509c10a4_136)\" to the \"Notes to the Consolidated Financial Statements\" for additional information.\n\nLeaf Tobacco Operations\n\nOur leaf tobacco revenues are principally comprised of sales of processed leaf tobacco and fees charged for processing and related services to manufacturers of tobacco products. Our leaf tobacco operations deal primarily in flue-cured, burley, and oriental tobaccos that are used in international cigarette brands. We purchase tobacco on five continents and ship to customers globally. We primarily purchase tobacco from suppliers and assume the risk of matching the quantities and grades required by our customers to the crop we are contractually obligated to purchase.\n\nOur arrangements with suppliers vary depending on our predictions of future supply and demand, local historical practice, and availability of capital. In some locales, we purchase crop inputs, such as seeds, fertilizer, pesticides, and other products related to tobacco crop production, and issue them to suppliers with whom we have purchase contracts. The suppliers, who generally operate small farms, then utilize these inputs to grow tobacco, which we are contractually obligated to purchase if the supplier meets our specifications. The advances of inputs for the current crop generally include the original cost of the inputs plus a mark-up and interest as it is earned. Where contractually permitted, we charge interest to the suppliers during the period the current crop advance is outstanding. We account for our advances to suppliers using a cost accumulation model, which results in us reporting our advances at the lower of cost or recoverable amounts excluding the mark-up and interest. The mark-up and interest on our advances are recognized when the tobacco is delivered as a decrease in our cost of the current crop. Upon delivery of tobacco, part of the purchase price paid to the supplier is paid in cash and part through a reduction of the advance balance. The advances applied to the delivery are reclassified out of advances and into unprocessed inventory. Under longer-term arrangements with suppliers, we may advance or guarantee financing on suppliers' capital assets, which are also recovered through the delivery of tobacco to us by our suppliers.\n\nOur agronomy team maintains frequent contact with suppliers prior to and throughout the growing and curing seasons to provide technical assistance to improve the quality and yield of the crop. As a result of various factors, including weather, not all suppliers are able to fully settle advances through delivery of tobacco in a given crop year. Throughout the crop cycle, we monitor events that may impact the suppliers’ ability to deliver tobacco. If we determine we will not be able to recover the original cost of the advances with deliveries of the current crop or future crop deliveries, the unit cost of tobacco received is increased when unrecoverable costs are within a normal range or expensed immediately when they are above a normal range. The normal range is based on our historical results.\n\nWe process tobacco to meet each customer's specifications as to quality, yield, chemistry, particle size, moisture content, and other characteristics. Unprocessed tobacco is a semi-perishable commodity. The processing of leaf tobacco facilitates shipping by preventing spoilage and is an essential service to our customers as the quality of processed leaf tobacco substantially affects the quality of the manufacturer’s products. Accordingly, our production facilities are in proximity to our principal tobacco sourcing locations. We process tobacco in Company-owned and third-party facilities around the world, including in Argentina, Brazil, China, India, Indonesia, Jordan, North Macedonia, Malawi, Tanzania, Thailand, Turkey, United States, and Zimbabwe. After processing, whole leaves, bundles, strips or stems, and scrap, where applicable, are separately packed in cases, bales, cartons or hogsheads for storage and shipment. Packed flue-cured, burley and oriental tobacco generally is transported in the country of origin by truck or rail, and exports are moved by ship.\n\nOur production processes and capabilities are optimized to extract maximum utility from the tobacco leaf, which in turn creates additional products to serve the needs of our customers. These products, referred to as Value-Added Tobacco Products (\"VATP\"), are derived from the tobacco we process in our facilities. A large portion of the VATP business is comprised of our cut rag tobacco operations where processed tobacco strips are blended and flavored to create a cut filler for use by manufacturers of nicotine products. A smaller portion of the VATP business leverages other byproducts from our tobacco processing operations, such as stems, small lamina, and scrap that would otherwise be discarded, and are used to create cut rolled expanded stems, rolled stems, and reconstituted tobacco products, which are used as inputs for various nicotine products.\n\n4\n\nWe utilize contracts, joint ventures, and other arrangements for the purchase of tobacco grown in other countries that produce export-quality flue-cured and burley tobacco. Much of the tobacco we purchase is sourced from the African, Asian, and South American regions in which we operate. The approximate percentage of tobacco purchases from these regions were as follows:\n\nYears Ended March 31,\n\n202620252024\n\nAfrica33.1%34.4%32.7%\n\nAsia21.6%19.6%18.7%\n\nSouth America22.7%23.7%28.1%\n\nSeasonality\n\nThe purchasing and processing activities of our leaf tobacco business are seasonal and vary by market and tobacco variety. Tobacco grown in North America is purchased, processed, and marketed generally during a five-month period beginning in August and ending in December. Tobacco grown in South America is usually purchased, processed, and marketed from January through July and, for tobacco grown in Africa, from March through September. Other tobacco markets around the world have similar purchasing and processing activities, although these activities occur at various times of the year.\n\nDuring the purchasing, processing, and marketing seasons, inventories of unprocessed tobacco, inventories of redried tobacco, and trade accounts receivable normally reach peak levels in succession. Current liabilities, particularly advances from customers and short-term notes payable, normally reach their peak in this period as a means of financing the seasonal expansion of current assets. At March 31, the end of our fiscal year, the seasonal components of our working capital primarily reflect the foreign-grown tobacco operations.\n\nTrack and Trace Technology\n\nIn connection with our leaf tobacco operations, the Company leverages its proprietary \"track-and-trace\" platform, branded as SENTRI®, to provide transparency into the lifecycle of agricultural products. SENTRI® houses our farm monitoring information and supports our analysis of data related to the production, harvest, processing, formulation, testing, and release of individual batches of products. By tracking data on products at each stage of our supply chain, SENTRI® permits proactive decision making for both the Company and our leaf tobacco customers. The key features of SENTRI® include:\n\n•Product Tracking: Data collection and tracking at various stages in the product lifecycle can provide customers with visibility into where products originate, how they were produced, and the product testing completed along the product journey.\n\n•Control and Visibility: With access to increased supply chain data, we can monitor quality control at various points in the product route to market.\n\n•Sustainability Commitments: SENTRI® incorporates visibility into the crop production practices and procedures, helping promote compliance with applicable regulations throughout a product's supply chain journey.\n\n•Lot Number Tracking: We can track specific products through the manufacturing process by lot number with full visibility to our customers. This provides more information about the product, its origin, and other information relevant to quality control and product transparency.\n\n•Agronomic Services: SENTRI® utilizes an experienced team to track and analyze data and insights regarding growing practices.\n\n5\n\nKey Customers\n\nIn our leaf tobacco business, our primary customers are major consumer tobacco product manufacturers. See \"[Note 26. Segment Information](#i6f44eae8422d46cd9f377051509c10a4_211)\" to the \"Notes to Consolidated Financial Statements\" for additional information regarding customers, and their respective affiliates, that account for more than 10% of our annual revenues. Our sales to customers were delivered to the following geographic regions:\n\nYear Ended March 31,\n\n2026\n\n(dollars in millions)$%\n\nAfrica410.817.0\n\nAsia755.331.3\n\nEurope884.636.7\n\nOther362.315.0\n\nTotal2,413.0100.0\n\nCompetition\n\nLeaf tobacco industry competition is based on the Company's ability to meet individual customer specifications, including, but not limited to, crop production and curing, sustainable best practices, buying, processing, residue compliance and crop financing, as well as the price charged for products and services. Pyxus is one of only two global, publicly held leaf tobacco merchants. We hold a leading position in most major tobacco growing regions in the world, including the principal export markets for flue-cured, burley, and oriental tobacco. In addition to the primary global independent leaf tobacco merchants, there are other global, regional, or national competitors. These include local independent leaf merchants that have low fixed costs and overhead and some of our customers that have vertically integrated operations in certain markets.\n\nWe have long-standing relationships with growers across the globe with whom we contract directly to procure tobacco, and our grower base is critical to our ability to provide sustainable, compliant crops that meet the specific requirements of our customers. We strive to maintain strong, productive relationships with our growers by providing them with agronomic expertise, which includes training on good agricultural practices to support quality and high-yielding crops, and training on our agricultural labor practices that set human rights standards by which they are expected to comply. We remain committed to conducting our global business in an ethical and responsible manner, in accordance with international standards and practices relating to human rights and the environment, to give our customers confidence that we can satisfy their demand requirements through a sustainable and compliant value chain.\n\nRegulation\n\nSee \"[Item 1A. Risk Factors](#i6f44eae8422d46cd9f377051509c10a4_22)\" for a discussion of applicable government regulation of leaf tobacco.\n\nAll Other\n\nWe are also engaged in the sale of non-tobacco agricultural products, which represented less than 1% of our consolidated revenues for each of the fiscal years ended March 31, 2026, 2025, and 2024. These operations have been combined and reported in an \"All Other\" category included for purposes of reconciliation of the respective balances of the Leaf segment to the consolidated financial statements. See \"[Note 26. Segment Information](#i6f44eae8422d46cd9f377051509c10a4_211)\" for additional information.\n\nHuman Capital Management\n\nOur workforce plays a fundamental role in fulfilling our corporate mission—to transform people’s lives so that, together, we can grow a better world. Attracting, developing, and retaining top talent is essential to advancing our business strategy and impact. We remain committed to fostering a workplace culture rooted in ethics and responsibility, and we invest in employee engagement, prioritize workplace safety, and celebrate the contributions of our team in furtherance of organizational success.\n\nAs of March 31, 2026, we employed approximately 3,300 people, excluding seasonal employees, in our worldwide operations, of which approximately 83.3% were employed outside of the United States. We maintain positive relationships with the Company’s employees and their respective organizations. We have collective bargaining agreements in place in many of the countries in which we operate, and we have long-term agreements in-place in certain jurisdictions to resolve disputes through binding arbitration.\n\nOversight and Management\n\nOur Human Resources department is responsible for managing employment-related matters, including recruiting, hiring, onboarding, compensation, performance management, advancement, succession planning, and professional and learning development. Our Board of Directors provides oversight of various matters pertaining to our workforce. The Compensation\n\n6\n\nCommittee of the Board of Directors is responsible for executive compensation matters and oversight of the risks and programs related to talent management. Our Human Rights Policy and Code of Business Conduct highlight our commitment to diversity, inclusion, fairness, safety, and equal opportunity in all aspects of employment.\n\nSupply Chain Human Rights Matters\n\nWe support efforts to address human rights concerns throughout the tobacco supply chain. For example, in our tobacco supply chain, we use on-farm good agricultural practices assessments to assess suppliers' compliance with labor practices. Our subsidiaries establish contract terms and conditions with suppliers related to forced and child labor and other agricultural labor practices, and they conduct due diligence throughout our tobacco growing regions to monitor compliance.\n\nEnvironmental Compliance\n\nAs an agricultural company, we recognize the effects our business activities have on the environment, and we understand that climate change could have long-term consequences on our business, our employees, suppliers, and the communities where we operate. We are committed to reducing our environmental impact by working with our suppliers to integrate sustainable agricultural methods and practices. Additional information regarding our activities related to our sustainability strategy can be found in our Sustainability Report, which is published on our website.\n\nCurrently, there are no material estimated capital expenditures related to environmental control facilities. In addition, there is no material effect on capital expenditures, results of operations or competitive position anticipated from compliance with current or pending federal or state laws and regulations relating to protection of the environment.\n\nAvailable Information\n\nOur website is www.pyxus.com. Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at http://investors.pyxus.com as soon as reasonably practicable after we file such material with, or furnish it to, the United States (\"U.S.\") Securities and Exchange Commission (the \"SEC\"). The information contained on our website shall not be deemed part of this annual report on Form 10-K. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.\n\nDevelopment of the Business\n\nA description of the general development of the Company's business is included in Item 1 of Part I of the Company's [Annual Report on Form 10-K for the fiscal year ended](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000939930/000093993022000030/pyx-20220331.htm)[March 31, 2022](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000939930/000093993022000030/pyx-20220331.htm) under the heading \"Company Overview\" and the paragraph immediately preceding such heading, which description is incorporated herein by reference."}