Pyxus International, Inc. (PYX) Q4 2019 Earnings Call Transcript

Pyxus International, Inc. (NYSE: PYX)
Q4 2019 Earnings Call
Jun 17, 2019, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to today's Pyxus' International Inc. fiscal year fourth-quarter and full-year 2019 earnings call. [Operator instructions] As a reminder, today's 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.

Joel Thomas -- Chief Financial Officer

Thank you, Cody. With me this afternoon 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 our 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 a 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 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 replay as 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.

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Good evening, everyone, and thank you for joining us. Looking at the past 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 e-liquids 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-saving 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 '19. Our year-end uncommitted inventory was the lowest as it's been since fiscal 2011, consistent with our working capital strategy. 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 '20, 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-liquids businesses remain on track to deliver significant revenue and profit in 2020, which we are 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 in 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, Pyxus' other operation, processing opportunities to monetize a portion of Pyxus' interest in this subsidiary in fiscal 2020. On that note, let's turn to FIGR. FIGR continues to outperform and remains a leader in share in the Maritime. FIGR hold strong position across all categories.

And since the legalization of recreational cannabis last fall, FIGR achieved 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 2 of its approximately 800,000-square-foot expansion project. Phase 2 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 is expected in early to mid-2021. The build out of FIGR East is also on track with Phase 1's completion targeted for the end of spring, and the completion of Phase 2 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 our unconsolidated 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. We are also very pleased with the development of Criticality's robust 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 are seeing impressive growth. This quarter, sales across our collection of brand exceeded sales in any other quarter.

Also and some recently launched as rebranding and new packaging and sales are reflecting positive momentum. As we manage our new business lines and our existing leaf business, we expect sales to be in the range of approximately $1.85 billion to $1.95 billion, an adjusted EBITDA in a range of approximately $160 million to $180 million for the fiscal year ending March 31, 2020. For the performance of the leaf and our new business ventures, I want to take a moment to highlight SENTRI. This proprietary block chain type platform is truly a differentiator for Pyxus, as it provides critical visibility into a product source to market journey, from the seed to the shelf you can track our products.

This quarter, we released SENTRI for Bantam and working to build SENTRI capabilities is for Korent and Purilum as well. We are committed to providing our partners and consumers with greater product transparency across all of our business lines. We are also focused on the pursuit of opportunities in the advancement of our agronomy services, with focus on the development of value-added agricultural products. Our commitment to this 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 operation 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 cake for animal feed. This acquisition demonstrates our ongoing efforts to evolve and diversify. We are expanding as a global agriculture 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?

Joel Thomas -- Chief Financial Officer

Thank you, Pieter. For the fourth quarter, full-service 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 U.S.

crop size and foreign tariffs on U.S. tobacco. These decreases were partially offset by an increase in the leaf volume, mainly attributable to larger crops in Africa. The timing of weak shipments in South America, a decrease in average sales price of 12%, and the continued development of other products and services segment.

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 and a half percent for the three months ended March 31, 2019. This increase was primarily due to lower leaf conversion cost in Africa from higher factory throughput driven by higher volumes and the favorable exchange impact on local currency costs, primarily in South America and in Europe, and the continued development of our other products and services segment.

These increases were partially offset by higher leaf conversion cost in the U.S. from lower factory throughput, driven by reduced volumes. SG&A increased to $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 start-up 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 percent of sales increased from 7.1% for the three months ended March 31, 2018, to 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 to $44.4 million or 2.4% from $1.846 billion to 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 the 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, a decrease in average sales price of 7.3% and the continued development of the other products and services segment. Cost of goods sold decreased to $49 million or 3.1% from $1.599 billion 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 increased 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 cost 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 the U.S.

crop size. SG&A increased $24.5 million or 16 and a half percent 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 cost 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 brands 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 million from a decline of $58.8 million for the year ended March 31, 2018. The $37.8 million for the year ended March 31, 2019. This increase was primarily due to a onetime 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 our operations. Now I'd like to turn the call back over to Pieter for some additional remarks.

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Thank you, Joel. Fiscal 2019 brought about 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 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.

Questions & Answers:

Operator

[Operator instructions] We'll take our first question from Karru Martinson with Jefferies. Please go ahead.

Jacqueline Crawford -- Jefferies -- Analyst

Hi. This is Jacqueline Crawford actually on for Karru. So just in terms of your fiscal '20 EBITDA guidance, do you think we should be run rating the gross margin improvement that you realized past quarter? Or how do you think we should be viewing margins going forward? Then I was also curious if you could breakout 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 of that as being fairly stable year over year? Or how we should think about that moving forward?

Joel Thomas -- Chief Financial Officer

Yeah. So maybe to address the SG&A costs, first. SG&A cost will be increasing as we look at 2020 driven by the new businesses primarily. And so -- but we're very focused on trying to manage those costs as best as 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 will 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 the new businesses, in particular, we anticipate the new businesses will be going to EBITDA positive during fiscal '20.

So that's very exciting, as we're -- as we've already stepped into the new year.

Jacqueline Crawford -- Jefferies -- Analyst

OK. Thank you. And then in regards to the potential monetization event that you spoke of early in the call and in your press release, how do you think about valuations for these assets? Are you looking more toward the realized reduction from these subs? Or where you projecting they can take production moving forward? And then, just given your privatization of debt paydown, can we assume that any proceeds from a monetization event would go toward most likely reducing the second-lien note?

Joel Thomas -- Chief Financial Officer

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 is -- I think 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 on some of the data points that we've 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 on taking four of the new operating entities, two of which we have majority stake in, two of which we have minority stake in, that are now all operating together. And our goal is to have those under a holding company that 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 our new business.

Jacqueline Crawford -- Jefferies -- Analyst

OK. That's really helpful. Thank you.

Operator

Thank you. We'll take our next question from Mary Gilbert with Imperial Capital.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

Yeah. Just to kind of follow up on a couple of those. So with regards 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 business there -- businesses are getting to EBITDA positive, the $160 million to $180 million guidance, does that infer, 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. Thanks.

Joel Thomas -- Chief Financial Officer

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 roll up to consolidation. And does have baked in the additional cost 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 -- we do have negative EBITDA associated with them.

And then as we move into the breakeven and then crossover to positive EBITDA, then they'll be providing positive EBITDA. And again that's all baked into our current 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 toward the beginning of the year that we will be evaluating and looking at various opportunities.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

OK. 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 timed just ahead of the one year out on the eight and a half? So April 15th, 2020, is one year out on the eight and a half 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 partial 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?

Joel Thomas -- Chief Financial Officer

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.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

OK. 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'll start to see debt associated with sort of the build out of that business since it didn't show up at year -- at fiscal year end?

Joel Thomas -- Chief Financial Officer

Yeah. And it may not show up as 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.

So.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

OK. Great. Thanks so much.

Joel Thomas -- Chief Financial Officer

Yes.

Operator

Thank you. We'll take our next question from Bryan Hunt with Wells Fargo Securities.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Good afternoon. Joel, I was wondering if you could touch on, what's the remaining capital? Or what's the capital plan for the Canadian cannabis business for this year?

Joel Thomas -- Chief Financial Officer

Yeah. So we try to give a little bit of information on that in the K, Bryan. And if you go to Page 70, we've 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, so.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Very good. And based on the discussion you had with Mary there, it's -- for the full year, is it safe to assume that all the other businesses will be EBITDA negative for the year?

Joel Thomas -- Chief Financial Officer

I don't -- I think it's early to make that statement. The businesses -- if we're talking about the businesses outside of leaf, they're all growing 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.

Bryan Hunt -- Wells Fargo Securities -- Analyst

When I look at leaf as a stand-alone business, you all have done a -- and as Pieter pointed out in his prepared remarks, one of the best years in a very long time and 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?

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

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 to 600,000 tons. Zimbabwe is another big crop.

Malawi is another big crop. And -- but what we're seeing across those areas in particular with the larger crops, I think, between currency and quality, we're seeing some cost reductions in that and that may be part of what you're seeing in the potential guidance there in terms of the actual market prices because we're seeing some cost reductions and you can see that publicly when you're looking at auction markets there as they are going along. So we have -- as always in the leaf business, there is 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 to 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 a long way to go. But once we get through quarter 2 and announce that I think we'll be able to give some more clarity on that, including where we're in the U.S. in terms of supply for China and tariffs, etc.

Bryan Hunt -- Wells Fargo Securities -- Analyst

All right. And one last question. I'll get back in the queue. So when you look at -- Pieter, we've got this discussion with Joel over the years, about great opportunities for your business, continued outsourcing from the traditional tobacco companies or 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?

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Well, I mean, I think, Bryan, if anything, we're seeing closures of smaller operations around the globe. And we see multiple countries really, and mostly vertically integrated operators eliminating small tobacco operations and there's 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, declining trends in certain markets for combustible cigarette consumption.

With value-added, we see strength in that business. In fact, we -- as 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 year, part of the business.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Great. I'll hand it off. Thank you.

Operator

Thank you. We'll take our next question from Hale Holden with Barclays.

Hale Holden -- Barclays -- Analyst

Thank you. I had a couple, just very quick ones. Joel, if you do monetize the new businesses, is there any restrictions on moving capital back from a Canadian cannabis company to a U.S. corporate under current U.S.

laws?

Joel Thomas -- Chief Financial Officer

I think, Hale, 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 pick harvested capital and apply it as we might need to.

Hale Holden -- Barclays -- Analyst

OK. 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 aligned for future thought?

Joel Thomas -- Chief Financial Officer

Yeah. No, our global expansion plans continue. And there are a number of opportunities outside of Canada and U.S. that we're looking at and exploring, and at points in the future, we will be moving forward on.

Hale Holden -- Barclays -- Analyst

OK. 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?

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Yes. 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, we're 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.

Hale Holden -- Barclays -- Analyst

All right, great. And then my last question is, on the potential monetization of the new businesses, how -- I assume that some portion of that -- any proceeds would stay in business to help fund it on a go forward basis? Or are those other types of securitization facilities a possibility also? Just trying to like -- just trying to figure how much...

Joel Thomas -- Chief Financial Officer

Yeah. So we will evaluate the local capital requirements to make sure that we have the right capital in place for the businesses, as we think through their growth. And then obviously, we're very focused on debt repayment and our refinancing. So it's making sure that you get that mix correct.

And so we're very focused on it.

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Yeah. And let me just add on to that. I mean, it's an exciting time for those businesses. At the end of last week, Health Canada announced the regs for the next generation product coming out at the end of this year.

So -- but those were very much where we were anticipating and hoping that there would be. And clearly, when you look at a combination of cannabis expertise, e-liquids and vapor expertise and track and trace with SENTRI. 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 through 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 we're at 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.

And then here in the United States, we've relaunched Bantam, Bantam 2.0. We're seeing good traction on that in terms of consumer update and looking forward to the expansion of that. We've got the new line of CBD, Korent Select and we're seeing good sell-in coming from that. And really it is for us to get the production and the distribution out of that.

And so it's exciting times for those businesses. And obviously, whatever we're looking at going forward, we have really -- want to and have to give the opportunity for those businesses to maximize their growth potential, particularly when they're strategically so well-positioned.

Hale Holden -- Barclays -- Analyst

Thank you so much for all the color.

Operator

Thank you. We'll take our next question from Alex Kelsey with Wasserstein.

Unknown speaker -- Wasserstein & Co Debt Opportunities -- Analyst

Hey, guys. It's Rajay, I'm curious on the guidance just given that the leaf business has the potential to be flattish and that looks like $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?

Joel Thomas -- Chief Financial Officer

Yeah. So Rajay, glad you're on the call. Yes. We have taken that position as we kind of talked about at the front side of the call that the new businesses and the spend that we've associated with those businesses and the period costs that we're anticipating for this year, we know that we're 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 we're still negative has related to the consolidated results. And so that's really what's driven the range that we've provided. And depending on timing, we'll have to wait and see, but we've got a ways to go. I think there's some other factors as well that you need to think about and that is, when 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 billion to $1.950 billion 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 and 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 or moving a little bit faster than what we thought.

Unknown speaker -- Wasserstein & Co Debt Opportunities -- Analyst

OK, great. Is there any outlook you can provide on just in terms of the band of outcomes on growth revenue for the year? Or is that too granular?

Joel Thomas -- Chief Financial Officer

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 outlook. So -- and remember, today, we've got certain entities that we've majority stakes in. Others that we've minority stakes in. The ones with the minority stakes are accounted for in the equity method.

And so to the extent that they get rolled into an entity that is 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.

Unknown speaker -- Wasserstein & Co Debt Opportunities -- Analyst

OK. And my last question, just to clarify. On the monetization of the growth properties, is that something that you -- that will occur after you have like more revenue from those properties in your fiscal Q3 and fiscal Q4. Is that the idea?

Joel Thomas -- Chief Financial Officer

I think that right now that the focus is sort of on the end-state 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.

Unknown speaker -- Wasserstein & Co Debt Opportunities -- Analyst

OK. Great. Thanks. Great job guys.

Thanks. Bye.

Operator

Thank you. We'll take a follow-up from Mary Gilbert with Imperial Capital.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

Yeah. Kind of touching up on the minority investments. 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...

Joel Thomas -- Chief Financial Officer

Again, we're...

Mary Gilbert -- Imperial Capital, LLC -- Analyst

Yes, sorry go ahead.

Joel Thomas -- Chief Financial Officer

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 makes sense. But I think it's real early to try to bisect things at this point.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

Got you. And then also just with regard to -- it sounds like the e-liquids business has been 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?

Joel Thomas -- Chief Financial Officer

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 our marketing and our focus, again, is to adults. So I think that there's been a lot of work at the FDA level.

And if you can look at -- 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.

Mary Gilbert -- Imperial Capital, LLC -- Analyst

OK. Great. Thank you.

Operator

Thank youy. We'll take another follow-up from Bryan Hunt with Wells Fargo Securities.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Yeah. Thank you. I was wondering, Joel, when you look at the overall marketing spend on FIGR, is there anyway you can kind of segment out the marketing spend versus maybe the spend on licenses and personnel? So if we can just get an understand of what you're investing in the brand?

Joel Thomas -- Chief Financial Officer

Yeah. So, Bryan, right now, there is a pretty considerable ramp related to the people in the holding company at FIGR, Inc. and building out the 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've a 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.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Just two more questions. One, does Criticality get or Korent a letter from the FDA during the year and could you talk about what the resolution was there?

Joel Thomas -- Chief Financial Officer

Korent has not received any letters that we're aware of.

Bryan Hunt -- Wells Fargo Securities -- Analyst

OK. 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 dare say, 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.

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Well, I think, we're ahead of many of our customers in certain of new businesses that we've gone into. But those with halo effect, I think, a strong Pyxus means a strong supplier of any products, 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 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.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Well, very good. That's it for me. Thank you.

Operator

Thank you. And that 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.

Joel Thomas -- Chief Financial Officer

Thank you, for joining our call this afternoon. The call will remain available for playback for any interested person till 8 p.m. on June 22nd. Our financial results and Form 10-K as well as other information can be accessed in 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.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

Joel Thomas -- Chief Financial Officer

Pieter Sikkel -- President, Chief Executive Officer, and Chairman of the Board of Directors

Jacqueline Crawford -- Jefferies -- Analyst

Mary Gilbert -- Imperial Capital, LLC -- Analyst

Bryan Hunt -- Wells Fargo Securities -- Analyst

Hale Holden -- Barclays -- Analyst

Unknown speaker -- Wasserstein & Co Debt Opportunities -- Analyst

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