Pyxus International, Inc. (NYSE:PYX) Q4 2019 Earnings Conference Call June 18, 2019 5:00 PM ET
Joel Thomas - CFO
Pieter Sikkel - President and CEO
- 乔尔托马斯 - 首席财务官
- Pieter Sikkel - 总裁兼首席执行官
Jacqueline Crawford - Jefferies
Mary Gilbert - Imperial Capital
Bryan Hunt - Wells Fargo Securities
- 杰奎琳克劳福德 - 杰弗里斯
- 玛丽吉尔伯特 - 帝国首都
- 布莱恩亨特 - 富国银行证券
Good day, ladies and gentlemen, and welcome to today's Pyxus International Incorporated Fiscal Year Fourth Quarter and Full Year 2019 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this call is being recorded.
I would now like to introduce your host for today's conference call, Joel Thomas, Chief Financial Officer. Mr. Thomas, you may now begin your conference.
美好的一天，女士们，先生们，欢迎来到今天的Pyxus International Incorporated财年第四季度和2019年全年收益电话会议。 此时，所有参与者都处于只听模式。 [操作员说明]提醒一下，正在记录此呼叫。
我现在想向大家介绍今天的电话会议，首席财务官Joel Thomas。 托马斯先生，您现在可以开始您的会议了。
Thank you, Cody. With me this evening is Pieter Sikkel, our President, Chief Executive Officer and Chairman of the Board of Directors; and Michael Shannon, Vice President and Treasurer.
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 referenced in the Safe Harbor statement included in our press release and are described in more 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'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 included with our earnings release issued on Friday, which is available on our website at www.pyxus.com.
Any replay, rebroadcast, transcript or other reproduction of this conference call, other than the replays provided by Pyxus 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 Pieter Sikkel.
谢谢，科迪。今晚与我同在的是Pieter Sikkel，我们的总裁，首席执行官和董事会主席;和Michael Shannon，副总裁兼财务主管。
Good evening, everyone and thank you for joining us. Looking at the current fiscal year, our team has accomplished unprecedented change successfully driving the launch of our new business ventures in legal Canadian cannabis, industrial hemp and the illiquid lines and strengthening our leaf business for the future. We remain pleased with the progress we have achieved on key initiatives undertaken in support of our transformation efforts and look forward to entering fiscal year 2020 with an evolved and innovative business model.
Turning now to performance, throughout the year, we made significant investments in the development of our new business ventures, and addressing challenging market conditions facing our leaf business, with efficiency and agility, resulting in a strong performance in leaf and significant growth in our new business lines. While the requirements of our new business ventures drove an increase in SG&A, those increases were partially offset by our cost savings initiatives in the leaf business. And we are pleased that we finished the year above our anticipated adjusted EBITDA guidance range at $163.3 million.
The reduction of long-term debt remains a top priority for our team, and we continue to progress in reducing our second lien note. We continue to see the benefit in the implementation of strategic initiatives to enhance the leaf business. In fact, we had one of the best years in tobacco that we’ve had in quite some time. Our team addressed challenging market conditions with an innovative mindset and a focus on quality, resulting in a 4.9% increase in full service volumes to 400.5 million kilos for fiscal 2019.
Our year-end uncommitted inventory was the lowest it has been since fiscal 2011, consistent with our working capital strategy. And Cyclone Idai struck Mozambique, Zimbabwe and Malawi, we were able to mitigate the impact on our operation, and more importantly successfully provide support to the individuals and communities impacted by the storm.
I'm very proud of the work our team has done and we look forward to continue building on this momentum in fiscal 2020, as we continue to execute against our strategy of increasing volume by strengthening our market share.
Our new business ventures in which we've invested substantial time and resource to build out are experiencing tremendous growth. Looking at projections our legal Canadian cannabis, industrial hemp and e-liquid businesses remain on track to deliver significant revenue and profit in 2020, which we're incredibly proud of and grateful for the dedication of our talented teams for their relentless efforts to accomplish our established objectives.
In line with our objective to deliver enhanced value to shareholders, we're evaluating the consolidation of Pyxus' ownership, and its two majority owned Canadian cannabis businesses FIGR Norfolk and FIGR East licensed as Canada's Island Garden with two of its minority-owned United States hemp and e-liquids businesses Criticality and Purilum, respectively, under the common control of a subsidiary separated from Pyxus' other operations. We’re assessing the opportunities to monetize a portion of Pyxus' interests in this subsidiary in fiscal 2020.
我们的年末未提交库存是自2011财年以来的最低值，与我们的营运资金策略一致。 Cyclone Idai袭击了莫桑比克，津巴布韦和马拉维，我们能够减轻对我们运营的影响，更重要的是成功地为受风暴影响的个人和社区提供支持。
为了实现我们为股东提供更高价值的目标，我们正在评估Pyxus所有权的整合，以及其两家拥有大部分资产的加拿大大麻企业FIGR Norfolk和FIGR East被许可为加拿大的Island Garden，其中两个拥有少数股权的美国大麻和电子液体公司分别在与Pyxus其他业务分离的子公司的共同控制下实现Criticality和Purilum。我们正在评估在2020财年将Pyxus在该子公司中的部分利益货币化的机会。
On that note, let's turn FIGR. FIGR continues to outperform and remains a leader in share in the Maritime. FIGR hold strong positions across all categories. And since the legalization of recreational cannabis last fall, FIGR has achieved the number two share position in Prince Edward Island and Nova Scotia. Also in line with expansion objectives FIGR announced its expansion into its third Canadian East Coast market, New Brunswick last week.
The introduction of FIGR products in New Brunswick grows FIGR's retail distribution as it continues to execute on its strategy to enter new provinces. FIGR is also taking steps to enhance its position by delivering on its commitment to increase local capacity. FIGR Simcoe, Ontario facility, FIGR Norfolk recently announced that the company have begun excavation and tree-clearing on the 20-acre parcel of land slated for phase two of its approximately 800,000 square foot expansion project.
Phase two will involve the construction of an approximately 200,000 square foot, state-of-the-art, modular indoor concept cultivation facility, which we expect to be complete by the end of 2020. Associated revenue and profitability as expected in early to mid-2021. The build-out of FIGR East is also on track with phase one completion targeted for the end of spring and for the completion of phase two expected by the end of the calendar year. Combined, we anticipate that this will increase FIGR’s total annual capacity to more than 140,000 KGs.
Looking at around consolidated industrial hemp joint venture Criticality, we're excited that this quarter we announced the opening of its 55,000 square foot industrial hemp extraction and purification facility in Wilson, North Carolina. They're also very pleased with the development of Criticality’s were less product pipeline and release of exciting new products. In May Criticality announced release of its professional line of CBD products Korent Select, available for sale to healthcare professionals.
This follows the release of Criticality’s Korent oil drop and e-liquid products in December 2018 and January 2019, respectively. Criticality expects to continue its momentum with new product launches planned for the second half of 2019.
Moving on to e-liquids, we're seeing impressive growth. This quarter sales across our collection of brands exceeded sales in any other quarter. Also, and some recently launched its rebranding and new packaging and sales are reflecting positive momentum. As we manage our new business lines in our existing leaf business, we expect sales to be in a range of approximately $1.85 billion to $1.95 billion, and adjusted EBITDA in a range of approximately $160 million to $180 million for the fiscal year ending March 31, 2020.
Further to the performance of leaf and our new business ventures, I want to take a moment to highlight Century [ph]. This proprietary block chain type platform is truly a differentiator for Pyxus as it provides critical visibility into a product sourced to market journey, from the seed to the shelf. We can track our product. This quarter we released entry for Bantam, and are now working to build entry capabilities for Korent and Purilum, as well. We’re committed to providing our partners and consumers with greater product transparency across all of our business lines.
在那个音符上，让我们转向FIGR。 FIGR继续表现优异，并且仍然是海事业务的领导者。 FIGR在所有类别中占据强势地位。自去年秋季休闲大麻合法化以来，FIGR在爱德华王子岛和新斯科舍省取得了第二的份额。同样符合扩张目标的FIGR上周宣布扩建至其位于新不伦瑞克省的第三个加拿大东海岸市场。
第二阶段将涉及建设一个约200,000平方英尺，最先进的模块化室内概念种植设施，我们预计到2020年底将完成。相关的收入和盈利能力如预期的那样在早期到中期2021。 FIGR East的扩建也正在进行中，第一阶段完成的目标是春季结束，并完成第二阶段预计到日历年年底。综合起来，我们预计这将使FIGR的年总产能增加到超过140,000 KG。
看看综合工业大麻合资企业Criticality，我们很高兴本季度我们宣布在北卡罗来纳州威尔逊市开设55,000平方英尺的工业大麻提取和净化设施。他们对Criticality的开发也非常满意，因为产品管道较少，并且发布令人兴奋的新产品。 5月，Criticality宣布推出其专业的CBD产品系列Korent Select，可向医疗保健专业人士销售。
We’re also focused on the pursuit of opportunities in the advancement of our agronomy services, which focused on the development of value added agricultural products. Our commitment to the space is a key component of our transformation, and a continuation of our strategy to move into new areas of growth.
In May, we achieved a key milestone as our affiliate, Pyxus Agriculture Limited Tanzania received the merger clearance certificate from the Tanzania Fair Competition Commission for the acquisition of an oil mill and refinery operations located in Dodoma. The oil mill and refinery operation provides Pyxus with the ability to extract and sell sustainably produced sunflower oil in various product formats for human consumption, as well as seed cape for animal feed.
This acquisition demonstrates our ongoing efforts to evolve and diversify. We're expanding as a global agricultural company with strong CPG capabilities. And this is another step in driving transformation. We have taken meaningful steps to transform our organization this past year. Looking at the growth of our leaf business and the progress we have made in developing our new business ventures, we are confident in our strategy and look forward to delivering long-term growth for the benefit of all of our stakeholders. Joel?
5月，我们成为一个重要的里程碑，因为我们的子公司Pyxus Agriculture Limited坦桑尼亚获得了坦桑尼亚公平竞争委员会的合并许可证书，用于收购位于多多马的一家油厂和炼油厂。炼油厂和炼油厂的运营为Pyxus提供了以人类消费的各种产品形式提取和销售可持续生产的葵花籽油的能力，以及动物饲料的种子斗篷。
Thank you, Pieter. For the fourth quarter, social respondents increased 4.3% to 131.9 million kilos in fiscal 2019. Sales and other operating revenues decreased $52.7 million or 8.2% from $643.9 million for the three months ended March 31, 2018 to $591.2 million for the three months ended March 31, 2019.
This decrease was primarily due to a decrease in leaf volumes in North America attributable to Hurricane Florence, reducing the U.S. crop size, the foreign tariffs and U.S. tobacco. These decreases were partially offset by an increase in leaf volume mainly attributable to larger crops in Africa, the timing of leaf shipments in South America, a decrease in average sales price of 12%, and the continued development of other products and services segments.
Cost of goods sold decreased $63.4 million or 11.1% from $569.1 million for the three months ended March 31, 2018 to $505.7 million for the three months ended March 31, 2019. This decrease was primarily due to the decrease in leaf volume. Gross profit as a percentage of sales increased from 11.6% for the three months ended March 31, 2018 to 14.5% for the three months ended March 31, 2019. This increase was primarily due to lower leaf conversion costs in Africa from higher factory throughput, driven by higher volumes and the favorable exchange impact on local currency costs, primarily in South America and Europe, and the continued development of our other products and services segment. These increases were partially offset by higher leaf conversion costs in the U.S. from lower factory throughput driven by reduced volumes.
SG&A increased $8.1 million or 17.6% from $46 million for the three months ended March 31, 2018 to $54.1 million for the three months ended March 31, 2019. This increase was primarily due to startup costs associated with the development of the cannabinoid manufacturing facilities in the provinces of Prince Edward Island and Ontario, and marketing expense for the FIGR cannabinoid brand. SG&A as a percentage of sales increased from 7.1% for the three months ended March 31, 2018 and 9.2% for the three months ended March 31, 2019.
Restructuring and asset impairment charges of $1.6 million for the three months ended March 31, 2019, were primarily related to cost savings and restructuring initiative to consolidate the company's U.S. green tobacco processing operations in Farmville, North Carolina, into the Wilson, North Carolina facility and repurpose the Farmville facility for storage and special projects.
For the fiscal year ended March 31 2019, full service volumes increased 4.9% to 400.5 million kilos, despite the impact of Hurricane Florence and foreign tariffs on U.S. tobacco. Sales and other operating revenues decreased $44.4 million or 2.4% from $1,846 million, for the year ended March 31, 2018 to $1,801.6 million for the year ended March 31, 2019.
This decrease was primarily due to decrease in leaf volumes attributable to Hurricane Florence reducing U.S. crop size, and foreign tariffs on U.S. tobacco. These decreases were partially offset by an increase in leaf volume, mainly attributable to larger crops in Africa, the timing of leaf shipments in South America, the decrease in average sales price of 7.3% and the continued development of the Other Products and Services segment.
Cost of goods sold decreased $49 million or 3.1% from $1,599 million for the year ended March 31, 2018 to $1,550.8 million for the year ended March 31 2019. This decrease was primarily due to the decrease in leaf volume. Gross profit as a percentage of sales increase from 13.3% for the year ended March 31, 2018 to 13.9% for the year ended March 31, 2019.
This increase was primarily due to favorable changes in product mix, lower leaf conversion costs in Africa from higher factory throughput driven by higher volumes and the favorable exchange impact on local currency costs, primarily in South America and Europe, and the continued development of the Other Products and Services segment. This increase was partially offset by higher leaf conversion costs in North America attributable to Hurricane Florence reducing U.S. crop size.
SG&A increased $24.5 million or 16.5% from $148.3 million for the year ended March 31, 2018 to $172.8 million for the year ended March 31, 2019. This increase was primarily due to start-up costs associated with the development of the cannabinoid manufacturing facilities in the Provinces of Prince Edward Island and Ontario in Canada, marketing expense for the FIGR cannabinoid brand and the Humble Juice e-liquids brand and the acquisition of an additional cannabis cultivation license from Health Canada. These increases were partially offset by leaf cost savings and restructuring initiatives. SG&A as a percentage of sales increased from 8% for the year ended March 31, 2018 to 9.6% for the year ended March 31, 2019.
Restructuring and asset impairment charges of $4.9 million for the year ended March 31, 2019 were due to the closing of one foreign processing facility in order to process tobacco in the affected area under a third-party processing arrangement going forward and the consolidation of the company's U.S. green tobacco processing operations into its Wilson, North Carolina facility and the repurposing of its Farmville, North Carolina facility for storage and special projects.
Income tax expense increased $96.6 million or 164.3% from a decline of $58.8 million for the year ended March 31, 2018 to $37.8 million for the year ended March 31, 2019. This increase was primarily due to a one-time benefit related to the enactment of the U.S. corporate income tax law in December 2017, recorded in tax expense for the year ended March 31, 2018.
As we move into fiscal year 2020, we remain committed to the pursuit of value enhancing opportunities and driving efficiencies across all operations.
Now I'd like to turn the call back over to Pieter, for some additional remarks.
Thank you, Joe. Fiscal 2019 brought about a great change for Pyxus. While our evolution is ongoing, we are confident that fiscal 2020 will continue to deliver greater growth and allow us to further capitalize on the momentum we've generated in our pursuit of new innovative opportunities to support our vision for the future. And we're excited about what the next year will bring.
On that note, operator, please open the line for questions.
谢谢你，乔。 2019财年为Pyxus带来了巨大的变化。 虽然我们的发展正在进行，但我们相信2020财年将继续实现更大的增长，并使我们能够进一步利用我们在追求创新机会以支持我们未来愿景时所产生的势头。 我们对明年会带来什么感到兴奋。
Thank you. [Operator Instructions] We'll take our first question Karru Martinson with Jefferies. Please go ahead.
谢谢。 [操作员说明]我们将与Jefferies一起提出我们的第一个问题Karru Martinson。 请继续。
Hi, this is Jacqueline Crawford actually on for Karru. So just in terms of your fiscal 2020 EBITDA guidance, do you think we should be run rating the gross margin improvement that you realize this past quarter or how do you think we should be viewing margins going forward?
Then I was also curious, if you could break out the guidance between your segments and maybe provide some more color on the anticipated SG&A spend for your Other Products and Services segment? And whether we should be thinking about as being fairly stable year-over-year or how we should think about that moving forward?
Yes, so maybe address the SG&A cost first, SG&A costs will be increasing as we look at 2020 driven by the new businesses primarily. And so, we're very focused on trying to manage those costs as best we can to the business size as it's growing. But it's one of those items, as we talked about before, where you've got to continue to make the appropriate investments in people and in the marketing, branding and advertising expense to drive the growth of the new businesses. And so that'll be an ongoing set of dynamics that we'll have to deal with.
As it relates to margins, we see great opportunities for margins to continue to improve. And as we look at new businesses, in particular, we anticipate because the new businesses will be going to EBITDA positive during fiscal 2020. So that's very exciting, as we're already -- as we've already stepped into the New Year.
是的，所以也许首先要考虑SG＆A成本，SG＆A成本将会增加，因为我们看看2020年主要由新业务推动。 因此，我们非常注重尽可能地将这些成本管理到业务规模，因为它正在不断增长。 但正如我们之前所讨论的那样，这是其中一项，您必须继续在人员和营销，品牌和广告费用方面进行适当的投资，以推动新业务的增长。 因此，这将成为我们必须处理的一系列持续动态。
Okay, thank you. And then in regards to potential monetization event that spoken really in the column in your press release. How do you think about valuations for these assets? Are you looking more toward the realized production from these subs or where you're projecting a 10 day production moving forward? And then just given your prioritization of debt pay down, can we assume that any proceeds from a monetization event would go toward most likely reducing the second lean note?
好的谢谢你。 然后是关于您的新闻稿中专栏中所说的潜在货币化事件。 您如何看待这些资产的估值？ 您是否正在寻找更多来自这些潜艇的实现生产，或者您正在预测10天的生产前进？ 然后，只要给出你的债务减少优先顺序，我们能否假设货币化事件的任何收益最有可能减少第二个精益债券？
Yes. So maybe to take the first part of that question first, our plan is to take surplus cash from any source, including a partial monetization to help to reduce net debt. And so there has I think been a lot of focus on the new businesses by a variety of sources. And I think there are a number of different folks out there that have developed views on what they think value looks like based off of some of the data points that we have provided.
We feel as though the value created by the new businesses is not reflected in our current stock price. And so, we're spending some time right now taking forward the new operating entities, two of which we have a majority stake in, two of which we have a minority stake in that are now all operating together. And our goal is to have those under our holding company, but then, we can look at different ways that we might be able to monetize a portion of the value of that entity.
And so, as we're moving to EBITDA positive during this fiscal year that provides a very nice inflection point related to how a variety of different players are looking at value today and the prospects for new business.
Okay, that's really helpful. Thank you.
Thank you. We'll take our next question from Mary Gilbert with Imperial Capital.
谢谢。 我们将接受Mary Gilbert与Imperial Capital的下一个问题。
Yes. Just to kind of follow up on a couple of those. So with regard to the monetization, is the timing going to be this calendar year in 2020? And then also, is it something that we're looking at where we would tap the Canadian equity markets in order to get, let's say commensurate valuations?
And then also with regard to the negative impact of SG&A, while the businesses are getting to EBITDA positive, the $160 million to $180 million guidance, does that infer an, let's say a drag on the core tobacco leaf business such that, there's still sort of a consolidated negative EBITDA that goes against the leaf business EBITDA in that $160 million to $180 million? Or does that also incorporate a positive EBITDA contribution that part wasn't clear to me. And I have a follow-up. Thank you.
是。 只是为了跟进其中几个。 那么关于货币化，到2020年这个日历年的时间是什么时候？ 还有，我们正在考虑在哪里利用加拿大股票市场来获取，让我们说相应的估值？
然后还有关于SG＆A的负面影响，而企业正在获得EBITDA正面，1.6亿美元到1.8亿美元的指引，这是否可以推断，让我们说对核心烟叶业务的拖累，这样，仍然排序 合并负EBITDA与1.6亿美元至1.8亿美元的叶子业务EBITDA相比？ 或者这也包含了EBITDA的正面贡献，这一部分对我来说并不清楚。 我有一个后续行动。 谢谢。
Yes, so the $160 million to $180 million is a consolidated view based on how we currently account for all of our various operating units, and then the real uptick in consolidation, and does have baked in the additional costs that we just talked about at the front side of the call related to SG&A.
And so at the beginning of the year until we go EBITDA positive, the new businesses, are -- do have negative EBITDA associated with them. And then, as we move into the breakeven, and then across over to positive EBITDA then they'll be providing positive EBITDA. And again, that's all baked into our current year guidance.
And as it relates to the first part of your question, we can't speak to any specifics at this time related to how we're thinking about monetization. But right now if we kind of think through the fiscal year that we've just started, it would be towards the beginning of the year that we would be evaluating and looking at various opportunities.
因此，在今年年初，直到我们的EBITDA为正，新业务 - 确实具有与之相关的负EBITDA。 然后，当我们进入盈亏平衡，然后跨越到正EBITDA时，他们将提供正EBITDA。 而且，这一切都融入了我们当前的年度指导。
Okay. So then following up on that, does that infer that originally you were timing to do a refinancing later this year, does that look like now that's going to be timed just ahead of the one year out on the 8.5, so, April 15, 2020 is one year out on the 8.5. And so obviously, you want to have it done before then.
So is that what you're sort of thinking, is it going to be a refinancing kind of timed with potential personal monetization in the first quarter? And then just to clarify on the SG&A or the negative EBITDA impact to the guidance, is the magnitude of that impact somewhere in the $20 million to $30 million range, is that how we should think about that?
好的。 那么继续跟进，是否可以推断出原本你是在今年晚些时候进行再融资的时机，现在看起来好像是在8.5之前的一年之前计时，所以，2020年4月15日 在8.5上一年。 显然，你希望在此之前完成它。
We've not given any specific ranges related to the new businesses, not at this time. There will likely be additional information related to the new businesses as we get further out into the year, and as we start to have the actuals flowing through for this year. So we'll come back to you on that point.
As it relates to the timing of the refinancing, yes, sometime between now and April of 2020, would be when we would be looking to step into the market. So it's just a matter of the appropriate timing.
我们没有给出与新业务相关的任何具体范围，而不是在此时。 随着我们进一步深入到今年，我们可能会有更多与新业务相关的信息，并且随着我们开始实现今年的实际情况。 所以我们会在那一点上回复你。
Okay. And then finally, you talked about financing the cannabis operation, where does that stand? Is that going to be in the first quarter that we will start to see debt associated with sort of the build out of that business since it didn't show up at fiscal year-end?
好的。 最后，你谈到了大麻运作的融资问题，那是什么意思呢？ 是否会出现在第一季度，我们将开始看到与该业务的构建相关的债务，因为它没有在财年结束时出现？
Yes, it may not show up, necessarily as debt depending on the type of products that we use, we'll try to make sure that we tailor what we use to the specific requirement. And again, as we've talked about before, on some of the other calls, there are certain structured finance products that we might utilize that wouldn't necessarily show up as debt still.
Okay, great. Thanks so much.
Thank you. We'll take our next question from Bryan Hunt with Wells Fargo Securities.
Good afternoon. Joe, I was wondering if you could touch on what's the remaining capital, what's the capital plan for the Canadian cannabis business for this year.
Yes, so, we try to give a little bit of information on that in the K Bryan, and if you go to page 70, we have got a section on planned capital expenditures and we've identified about $94.2 million for 2020. And of that, the Other Products and Services segment is estimated to be around $67 million. So it's the typical kind of $15 million to $20 million, maybe even up to $25 million related to maintenance CapEx on the leaf side. And then we've got the other businesses.
是的，所以，我们尝试在K Bryan中提供一些信息，如果你去第70页，我们有一个关于计划资本支出的部分，我们已经确定了2020年的9420万美元。 其他产品和服务部门估计约为6700万美元。 所以这是典型的1500万到2000万美元，甚至可能高达2500万美元与叶片维护资本支出相关。 然后我们有了其他业务。
Very good. And based on the discussion you had with, Mary, there for the full year it is safe to assume that all the other businesses will be EBITDA negative for the year?
I don't -- I think it's too early to make that statement. If you’re talking the businesses outside of leaf, they're all going very quickly. And there are some timing questions that are still out there. But we're looking forward to this year and getting numbers out as we move through the year. But there could be some timing elements there. I don't think that I can really speak to that yet.
我没有 - 我认为做出这样的陈述还为时过早。 如果你正在谈论叶子之外的业务，他们都会很快进行。 还有一些时间问题仍在那里。 但是我们期待今年能够在我们度过这一年的过程中获得数据。 但那里可能会有一些时间元素。 我不认为我能真正说出来。
When I look at leaf as a standalone business, you all have done a -- as Pieter pointed out in his prepared remarks one of the best years in a very long time m you’ve had two years of growth in a row. What's your outlook when you look at major markets like Brazil and Africa in terms of the availability of leaf? And do you think you can grow organically again in fiscal 2020?
当我把叶子视为一个独立的企业时，你们都做了一件事 - 正如彼得在他准备好的评论中指出的那样，在很长一段时间里，你已经连续两年成长。 当您看到巴西和非洲等主要市场的叶片可用性时，您的前景如何？ 您是否认为在2020财年可以再次有机增长？
I think we’re certainly going to try Brian. In terms of availability, we've got big crops across South America and Africa. This is the third large crop in a row in Brazil, coming in at 580,000 at 600,000 tons, Zimbabwe is another big crop, Malawi is another big crop. And at -- but we are seeing across those areas, in particular, with the larger crops, I think between currency and quality, we are seeing some cost reductions in that.
And that may be part of what you're seeing in the potential guidance there in terms of actual market prices, because we are seeing some cost reductions. And you can see that publicly when you're looking at the auction markets as they are going along. So we have as always in the leaf business the strong availability of tobacco that helps us efficiently purchase product.
And now it's a matter of us really executing on sales, blending those tobaccos getting the shipments out for the customers and hopefully having another good year. But certainly the opportunity is there, the opportunity is there for significant amounts of business, but it's still early in the year for us to really make any direct statements as to where we expect to be in terms of volumes for the full year. There's multiple factors in that and obviously a pretty wide guidance range, because we got -- we have a long way to go.
But once we get through quarter two and announce that I think we'll be able to give some more clarity on that, including where we are in the U.S. in terms of supply for China tariffs, et cetera.
我想我们肯定会去尝试Brian。在可用性方面，我们在南美和非洲都有大作物。这是巴西连续第三个大型作物，产量为58万，为60万吨，津巴布韦是另一个大作物，马拉维是另一个大作物。而且 - 但我们正在看到这些地区，特别是较大的作物，我认为在货币和质量之间，我们看到了一些成本降低。
现在，我们真正执行销售，将这些烟草混合在一起为客户提供货物，并希望有另一个好年份。但肯定有机会，有大量业务的机会，但我们仍然可以在今年年初真正就我们预期的全年销售量做出任何直接陈述。这有很多因素，显然是一个相当广泛的指导范围，因为我们得到了 - 我们还有很长的路要走。
And maybe one last question I'll get back in the queue. When you look at Pieter and we've had this discussion, Joe, over the years about great opportunities for your business. Continued outsourcing from the traditional tobacco companies, the cigarette companies. Have we seen any announcements recently and kind of where do you stand on your cut rag operations, which is a beneficiary of outsourcing. So that's it kind of the evolution of outsourcing and what opportunities do you see in the near-term?
也许最后一个问题我会回到队列中。 当你看到Pieter并且我们已经讨论过这些问题时，Joe多年来为您的业务提供了很好的机会。 继续从传统烟草公司，卷烟公司外包。 我们最近是否看到过任何公告，您对您的裁剪作业有何看法，这是外包的受益者。 这就是外包的发展方式，你认为近期有哪些机会？
Well, I think Bryan, if anything, we're seeing closures of smaller operations around the globe. We see multiple countries, really, and mostly vertically integrated operators, eliminating small tobacco operations, and there has been some recent announcements on that. But what does that really do, it takes those volumes and places them in larger markets where we have a presence and efficiencies. So that we believe creates opportunities for us to continue to grow our business despite obviously defining trends in certain markets for combustible cigarette consumption.
With value added, we see strength in that business. In fact, that as a piece of the business we continue to invest in, and whether that be in cutting in our facilities here in the United States and in Jordan, whether that be in software, as we move out, whether that be in opportunities to provide other value added services to blue chip manufacturers around the globe, as they're looking to create more efficiencies in their supply chain, as volumes are declining.
We continue to see those opportunities and that is reflected in the growth that you're seeing in the total full service volumes that we announced today for the year and certainly are working very hard to continue to grow as we move out. It's a segment of our business that has steadily been growing over the last five years and we've been very pleased with that part of the business.
Great, I'll hand it off. Thank you.
Thank you. We'll take our next question from Hall Holding [ph] with Barclays.
谢谢。 我们将接受Hall Holding [ph]与Barclays的下一个问题。
Thank you, I had a couple, just very quick ones. Joe, if you do monetize the new businesses, is there any restrictions on moving Canada back from a Canadian cannabis company to a U.S. corporate under current your laws?
I think, Hall, the way I would answer that is there are a lot of kind of what ifs related to any opportunity. And so when we think about our plan to repay debt, I think that we should be in a good position to be able to take harvested capital and apply it as we might need to.
Okay, thank you. In the 10-K, you guys mentioned the potential to apply for other licenses outside of Canada, I was wondering if that was a near-term event or if that was just a line for future thought?
Yes, no our global expansion plans continue and there are a number of opportunities outside of Canada and the U.S. that we are looking at and exploring and at points in the future we’ll be moving forward on.
Okay. And then would it be possible for you guys to quantify the impact of the cyclones in Africa, and how that impacted the fiscal fourth quarter?
I mean, we actually -- our teams did an extraordinary job there. We had several thousand tons of volume at risk because of that cyclone, and obviously were three weeks to go to the end of the quarter. They got almost all of it out with the vessels we've had no damage and a very small quantity stayed behind that missed the end of the year. So it was really an excellent job done by our teams over there.
我的意思是，我们实际上 - 我们的团队在那里做了非凡的工作。 由于这种旋风，我们有数千吨的风险，显然是三个星期才到达季度末。 他们几乎把所有这些都带到了我们没有受到伤害的船只上，而且很少有人留在了一年之后。 所以我们的团队在那里完成了非常出色的工作。
Great. And then my last question is, on a potential monetization of the new businesses, how -- I assume that some portion of that any proceeds would stay in the business to help fund it on a go-forward basis, or are those other type of securitization facilities a possibility also, just trying to like trying to figure out how much...
非常好。 然后我的最后一个问题是，对于新业务的潜在货币化，如何 - 我假设任何收益的某些部分将留在业务中以帮助为其提供资金，或者是其他类型的 证券化设施也是一种可能性，只是想试图弄清楚多少......
Yes, so we will evaluate the local capital requirements, make sure that we have the right capital in place for the businesses, as we think through the growth. And then, obviously, we're very focused on debt repayment in our refinancing. So it's making sure that you get that mix correct. And so we are very focused on it.
是的，所以我们将评估当地的资本要求，确保我们为企业提供合适的资本，正如我们通过增长思考的那样。 然后，显然，我们非常关注再融资中的债务偿还。 因此，它确保您正确地混合。 所以我们非常关注它。
Yes, let me just add to that. I mean, it's an exciting time for those new businesses. At the end of last week, Health Canada announced the regs for the next generation products coming out at the end of this year. So those were very much where we were anticipating and hoping that they would be and clearly when you look at a combination of cannabis expertise, e-liquids and vapor expertise, and track and trace with Century when you look at the next generation of products that with these regulations should be able to come out just in the middle of December now. I guess, about 60 days after October 17.
I think these four businesses are extraordinarily well positioned to work together to get the next generation of products out in the marketplace and really be at the forefront of that. And that is really in-house expertise that should propel these businesses, particularly up in Canada forward very quickly and give us great opportunities to expand faster across the Canadian footprint, along with that, of course, the new production capacities coming online.
The increased product manufacturing capabilities are all part of that licensing program. So really it’s falling into place for us to be very well positioned, particularly as we look at the end of the year there.
Then here in the United States, we've relaunched Bantam, Bantam 2.0. We're seeing good traction on that in terms of consumer uptake, and looking forward to the expansion of that. And we've got the new line of CBD Korent Select, and we're seeing good selling coming from that. And really is for us to get the production and distribution out of that.
And so it’s exciting times for those businesses. And obviously, whatever we're looking at going forward, we really have one turn have to give the opportunity for those businesses to maximize their growth potential, particularly, when they're strategically so well positioned.
然后在美国，我们重新启动了Bantam，Bantam 2.0。在消费者吸收方面，我们看到了良好的吸引力，并期待着扩大这种趋势。我们已经拥有CBD Korent Select的新系列，我们看到了很好的销售。而且我们真的需要从中获得生产和分销。
Great, thank you so much for the call.
Thank you. We'll take our next question from Alex Kelsey with Wasserstein.
谢谢。 我们将接受Alex Kelsey与Wasserstein的下一个问题。
Hey, guys, it’s Roger here. I'm curious on the guidance. Just given that the leaf business has the potential to be flattish and that took a $180 million business, and if growth can be either less of a drag or potentially flat or positive, why is the guidance in the $160 million to $180 million range versus like $170 million to $200 million?
嘿，伙计们，这是Roger。 我对这个指导很好奇。 只是鉴于叶子业务有可能变得平淡，并且需要1.8亿美元的业务，如果增长可能不是一个拖累或可能持平或积极，为什么指导在1.6亿到1.8亿美元的范围内比如 1.7亿美元到2亿美元？
Yes. And so, Roger, good afternoon and glad you're on the call. We have taken the position, as we kind of talked about at the front side of the call that the new businesses and the spend that we have associated with those businesses and the period costs that we're anticipating for this year. We know that we have an EBITDA breakeven point. The question is just where does it occur in the year and how does that translate to EBITDA of the new businesses versus the impact that the periods when we're still negative has a related to the consolidated results.
And so that's really what's driven the range that we provided. And depending on timing, we'll have to wait and see, but we've got a ways to go. I think there are some other factors, as well, that you need to think about and that is we think about the tariff situation that still has not been resolved here in the U.S. and other crop quality type issues that we stay focused on. All of those are baked into our guidance for the year of $1,850 million to $1,950 million on the top line and $160 million to $180 million. So -- but we’ll have to wait and see how this year goes, we've got some puts, we've got some takes; and then the timing of some things on the new business.
So that's where our $160 million to $180 million comes from. And we'll be paying attention to what's happening across the year and letting you know, if things get accelerated. We're moving a little bit faster than what we thought.
所以这真的是我们提供的范围的驱动力。根据时间安排，我们必须拭目以待，但我们还有很长的路要走。我认为还有一些其他因素需要考虑，那就是我们考虑的是美国以及我们一直关注的其他作物质量类型问题仍未解决的关税形势。所有这些都纳入了我们今年的指引，即18.5亿美元至19.5亿美元的顶线，1.6亿美元至1.8亿美元。所以 - 但我们必须等待，看看今年如何，我们有一些看跌期权，我们有一些看法;然后是新业务的一些事情的时机。
Okay, great. Is there any outlook you can provide on just terms of the band of outcomes on growth revenue for the year? Is that too granular?
好，太棒了。 您是否可以就年度增长收入的结果条款提供任何展望？ 这太细粒了吗？
We're going to be coming back on the new businesses as we get further into the year, trying to give a little bit more of information on the outlook. So -- and remember, today we've got certain entities that we have majority stakes in, others that we have minority stakes in. Ones with the minority stakes are carried forward to the equity method. And so to the extent that they get rolled into an entity that as a consolidated entity that will change the accounting for those and help to provide additional transparency to investors.
So we're working through some of that right now. And we haven't completed that work yet.
随着我们进一步进入今年，我们将重新开始新的业务，试图提供更多有关前景的信息。 所以 - 记住，今天我们已经拥有了我们拥有多数股权的某些实体，其他我们持有少数股权的实体。少数股权的一部分被转移到权益法。 因此，在某种程度上，它们会被纳入一个实体，作为一个合并实体，将改变对这些实体的会计处理，并有助于为投资者提供额外的透明度。
Okay. And my last question, just to clarify on the monetization, the growth properties, is that something that you would -- that would occur after you have, like more revenue from those properties in your fiscal Q3 and fiscal Q4, is that the idea?
好的。 我的最后一个问题，只是为了澄清货币化，增长属性，你会想到的东西 - 就像你在财政Q3和财政Q4中从这些财产中获得的更多收入一样，会产生这种想法吗？
I think that, right now that the focus is sort of on the end stake capability of the business, we're obviously very focused on what we've done related to the build outs. And then, of course, the revenue and profitability ramps that are occurring. And so those are all discussion points and all focal areas for discussion.
我认为，现在关注的重点是企业的最终投资能力，我们显然非常关注我们所做的与建设有关的事情。 然后，当然，收入和盈利能力正在上升。 所以这些都是讨论要点和讨论的所有重点领域。
Okay, great. Thanks. Great job, guys. Thanks.
好，太棒了。 谢谢。 干得好，伙计们。 谢谢。
Thank you. We'll take the follow-up from a Mary Gilbert with Imperial Capital.
Yes. Kind of touching up on the minority investment, so Criticality is going to become a majority investment by the end of the year? Do you get to take when that occurs? Do you get to take the whole impact of the profitability, revenues and EBITDA into your financial performance for the full fiscal year when that occurs? And then also -- yes, sorry, go ahead.
是。 有点接近少数股权投资，那么到今年年底，重要性将成为多数投资？ 当你发生这种情况时，你能接受吗？ 您是否可以将盈利能力，收入和EBITDA的整体影响纳入整个财政年度的财务业绩？ 然后 - 是的，对不起，继续吧。
I was just going to say, yes, we've outlined, I think, very high level, some of the work that we're in the middle of right now, and we'll provide additional clarity as such time make sense. But I think it's real early to try to dissect things at this point.
Yes. And then also just with regard to -- it sounds like the e-liquids business has an exceeding expectations in terms of growth, which sounds really good. And then, of course, the prospects of CBD, but I was just wondering if how you view the risks associated with the FDA targeting flavors and some of the issues around that?
是。 而且就这一点而言 - 听起来电子液体业务在增长方面有超出预期，这听起来非常好。 然后，当然，CBD的前景，但我只是想知道你是如何看待与FDA目标风味相关的风险和周围的一些问题？
Well, flavors are always a focal point. But I think, the point that we always come back to, is that, we believe in marketing to adult use, and we remain very focused on that. And I think that everything we do as a company is to try to ensure that adults can use these products and marketing and our focus on again is to adults. So I think that there has been a lot of work at the FDA level. And if you look at some of what they have said over the last call a year, and where they've pointed to on a lot of companies. I think that we're doing our best to be out in front with sort of best practices. And doing our best to make sure that it's in line with what I kind of just laid out.
嗯，口味总是一个焦点。 但我认为，我们总是回到这一点，我们相信营销成人使用，我们仍然非常关注这一点。 我认为我们作为一家公司所做的一切都是为了确保成年人能够使用这些产品和营销，我们再次关注成人。 所以我认为在FDA层面已经有很多工作要做。 如果你看一下他们在一年的最后一次电话会议上所说的话，以及他们在很多公司指出的地方。 我认为我们正在尽最大努力摆脱最佳实践。 并尽最大努力确保它与我刚刚制定的内容一致。
Okay, great. Thank you.
Thank you. We’ll take another follow-up from Bryan Hunt with Wells Fargo.
谢谢。 我们将接受Bryan Hunt与Wells Fargo的另一次跟进。
Thank you. I was wondering, Joe, when you look at the overall marketing spend on FIGR. Is there any way you can kind of segment out the marketing spend versus maybe to spend on licenses and personnel. So we can just get an understanding of what you're investing in the brand?
谢谢。 当你看到FIGR的整体营销支出时，我想知道，乔。 有没有什么方法可以分解营销支出，而不是花在许可证和人员上。 那么我们可以了解您对该品牌的投资情况？
Yes. So Bryan right now there is a pretty considerable ramp related to the people in the holding company on the FIGR Inc. and building out that team. And so a lot of the spend is associated with that. We also have some very talented marketing and branding firms that we're working with. And we have pretty big spend associated with that, as we think about not only the Canadian market, but also other markets where we operate.
So those are all kind of components of where we're spending right now. Obviously, you've got differences in what's legal in Canada versus what's legal in the U.S. and other parts of the world. And so we need to make sure that we're following the various rules and regs related to those legal requirements.
是。 所以布莱恩现在有一个非常可观的坡道，与FIGR公司控股公司的人员有关，并建立了这个团队。 所以很多花费与此相关。 我们还有一些非常有才华的营销和品牌公司，我们正在与他们合作。 我们有相当大的支出，因为我们不仅考虑加拿大市场，还考虑我们经营的其他市场。
所以这些都是我们现在开支的所有组成部分。 显然，你在加拿大的合法性与美国和世界其他地区的合法性存在差异。 因此，我们需要确保遵守与这些法律要求相关的各种规则和注册。
Just two more questions. One is Criticality our Court the letter from the FDA during the year and could you talk about what the resolution was there?
Court has not received any letters that we’re aware of.
Okay, I thought I read that in the 10-K. And then my last question, I was wondering, with all these capabilities, I mean, if I look at your core tobacco customers, a lot of them are going down, kind of the same path you are in terms of e-liquids or vaping tools, as well, as I daresay a lot of them are probably going down the path of exploring cannabis. Are your new capabilities providing a halo effect for your legacy business? And if so, can you talk about how and have there been any particular wins given your new capabilities? And that's it.
好吧，我以为我在10-K中读过。 然后我的最后一个问题，我想知道，有了所有这些功能，我的意思是，如果我看看你的核心烟草客户，他们中的很多人都会下降，在电子液体或雾化方面有点相同 工具，我敢说其中很多可能正在探索大麻的道路。 您的新功能是否会为您的传统业务带来光环效应？ 如果是这样的话，你能谈谈你的新能力是如何以及有没有特别的胜利？ 就是这样。
I think we're ahead of many of our customers in certain of new businesses that we've gone into. But in terms of a halo effect, I think a strong Pyxus means a strong supplier of any product, which means it's a good company to be associated with as a supplier or a partner or anything else.
So I think that, yes, when you talk about a halo effect, I certainly believe that there certainly all the discussions we've had with a multitude of our customers across the globe have always been extremely positive as we've been going through this transformation. And there has been a lot of excitement about that. And I think it's not only that optimism and outlook is affecting our customers, it's also affecting our employees. And that spirit is running across the whole business.
So I can't directly attribute anything in leaf to anything in -- on the other side of the business, but at the same time, I think it creates a very positive outlook for all to be -- to have Pyxus in your supply chain.
所以我认为，是的，当你谈到光环效应时，我当然相信，当我们经历过这个时，我们与全球众多客户进行的所有讨论都非常积极。 转型。 对此有很多兴奋。 我认为，乐观和前景不仅会影响我们的客户，还会影响我们的员工。 这种精神贯穿于整个业务。
因此，我不能直接将任何内容归结为业务的另一方面，但与此同时，我认为它为所有人创造了一个非常积极的前景 - 让Pyxus在您的供应链中。
Very good. That’s it for me, thank you.
Thank you. And it does conclude today's question-and-answer session. I’d like to turn the conference back over to Mr. Thomas for any additional or closing remarks.
谢谢。 它确实结束了今天的问答环节。 我想将会议转回托马斯先生，以获取任何补充或结束语。
Thank you for joining our call this afternoon. The call will be made available for playback for any interested person through 8 PM on June 22nd. Our financial results in Form 10-K as well as other information can be accessed on our website at www.pyxus.com. Additionally, I'm available by phone should anyone have any further questions? Again, thank you for participating in our conference call this afternoon.
感谢您今天下午加入我们的电话。 该电话将于6月22日晚上8点开始播放给任何感兴趣的人。 我们的10-K表格中的财务结果以及其他信息可在我们的网站www.pyxus.com上获取。 另外，如果有人有任何进一步的问题，我可以通过电话联系我吗？ 再次感谢您今天下午参加我们的电话会议。
Thank you. That does conclude today's conference. Thank you all for your participation.
谢谢。 这确实结束了今天的会议。 谢谢大家的参与。
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