LONGMONT, Colo., Nov. 9, 2023
/PRNewswire/ -- S&W Seed Company (Nasdaq: SANW) today
announced financial results for the three months ended September 30, 2023.
Financial Highlights
- Revenue for the first quarter of fiscal 2024 was $16.4 million, a 17.3% decrease compared to the
first quarter of fiscal 2023. Double TeamTM sorghum
revenue was $0.5 million in the first
quarter of fiscal 2024 compared to $0.0
million in the first quarter of fiscal 2023.
- GAAP gross profit margin for the first quarter of fiscal 2024
was 30.5%, an improvement from 22.7% in the first quarter of fiscal
2023.
- Operating expenses were $7.9
million for the first quarter of fiscal 2024, which is
consistent with operating expenses for the first quarter of fiscal
2023.
- GAAP net loss was ($6.0) million,
or ($0.14) per basic and diluted
share, for the first quarter of fiscal 2024 compared to a GAAP net
loss of ($4.5) million, or
($0.11) per basic and diluted share,
for the first quarter of fiscal 2023.
- Adjusted EBITDA (see Table B) improved by $0.2 million to ($1.4)
million for the first quarter of fiscal 2024 compared to
($1.6) million for the first quarter
of fiscal 2023.
Recent Highlights
- In July 2023, seed industry
veteran Mark Herrmann was appointed
as Chief Executive Officer, or CEO, following the planned
retirement of its previous CEO, Mark
Wong, who remains on the Board.
Management Discussion
"We have made good progress during the first quarter instituting
key operational initiatives to drive the business towards
profitability in the near-term, including improved life cycle
management to reduce obsolescence costs; the rationalization of
certain low margin forage product lines and seed treatments;
suspension of our stevia development program; and an overall seed
manufacturing cost reduction plan," commented S&W's recently
appointed CEO, Mark Herrmann. "These
initiatives, along with early Double Team sales and higher margin
alfalfa sales, resulted in a gross profit margin of 30.5%, which
was a 780-basis point improvement and a $0.2
million improvement to our adjusted EBITDA compared to
the year ago first quarter. With strong progress made during what
is historically one of our seasonally smaller quarters consisting
primarily of forage shipments, I believe the stage is well set for
continued improvement throughout the year, especially during the
later quarters of fiscal 2024 when we typically ramp up most of our
shipments of our high margin Double Team sorghum solution."
"Beyond our focus on operational excellence to align S&W
with best-in-class seed industry standards, we are making continued
developmental progress to build off the momentum of our first trait
technology solution – Double Team Grain Sorghum. We are planning to
introduce our Double Team Forage Sorghum solution and Prussic Acid
Free Trait for sorghum in fiscal 2024, with full commercial launch
slated for the following year. Prussic Acid Free will
initially be introduced as a solo trait and then shortly thereafter
it is expected to be provided as a stacked trait with Double Team.
We are also developing a second-generation post grass herbicide
trait which we plan to launch in 2025 and are in discovery stage
for an insect tolerance/resistance trait, and broad-spectrum
herbicide trait as well. We are clearly becoming a key
technology provider in sorghum, the 5th largest cereal crop
globally, that can be used as a substitute for many grains on the
market today due to its key nutrient profile and ability to handle
higher temperatures and drier climates better than many other
crops."
"We look forward to making continued commercial and development
progress throughout fiscal 2024 with a laser focus on operating
S&W with best-in-class practices, from top to bottom," Herrmann
concluded.
International Operations Update
In May 2023, S&W announced
that its Board is evaluating potential avenues to unlock what the
Company sees as unrecognized value in its international operations,
which are headquartered within the Company's Australian
subsidiary. S&W has retained Bell Potter Securities
Limited as its financial advisor and to assist the Board in its
evaluation. As part of the process, the Board expects to review a
full range of potential alternatives, which may include an
IPO/Australian public listing of S&W International, or a
merger, reverse merger or other business combination or strategic
transaction involving the Company's international operations – any
of which would be expected to help improve strategic focus, enhance
financial transparency, and better enable stakeholders to value
separate components of the Company's businesses independently.
The Company cautions that there can be no assurance the Board's
evaluation will result in a completed transaction, or any assurance
as to its outcome or timing. It does not intend to disclose any
developments related to the process unless and until S&W
executes a definitive agreement for a particular transaction, or
the Board otherwise determines that further disclosure is
appropriate or required.
Financial Results
Total revenue for the first quarter of fiscal 2024 was
$16.4 million compared to total
revenue for the first quarter of fiscal 2023 of $19.9 million. The $3.5
million year-over-year decrease in revenue was primarily
attributable to a $2.9 million
decrease in sales to the Middle
East and North Africa
region due to management's decision to not discount non-dormant
alfalfa as cheaper European seed disrupted the market, a
$1.6 million decrease in Mexico sales of non-dormant alfalfa due to wet
conditions causing missed plantings, a $0.7
million decrease in Asia
sales due to COVID using inventory carryover into fiscal 2024
leading to lost sales, and a $0.4
million decrease in Australia sorghum sales due to dry planting
conditions. This decrease was offset by a $1.0 million increase in South Africa sorghum sales from the addition
of a new customer, a $0.7 million
increase in Alfalfa sales delivered in the first quarter of fiscal
2024 that historically would have been expected to occur
in the second quarter, and a $0.5
million increase in Double Team sorghum revenue.
GAAP gross profit margin for the first quarter of fiscal 2024
was 30.5% compared to GAAP gross profit margin for the first
quarter of fiscal 2023 of 22.7%. The improvement in GAAP gross
profit margin was primarily driven by improved non-traited
sorghum margins due to better inventory life-cycle management,
improved non-dormant alfalfa margins due to pricing in the global
market, and increased sales and improved margins of our high margin
Double Team traited sorghum.
GAAP operating expenses for the first quarter of fiscal 2024
were $7.9 million, which was
consistent with the first quarter of fiscal 2023. While the Company
saw a $0.4 million improvement from
research and development expenses and a $0.3
million improvement in depreciation and amortization, this
was offset by a $0.7 million increase
in selling, general, and administrative expenses.
Adjusted operating expenses (see Table A1) for the first quarter
of fiscal 2024 were $6.7 million
compared to $6.5 million in the first
quarter of fiscal 2023. The $0.2
million increase in adjusted operating expenses for the
first quarter of fiscal 2024 was attributed to a $0.6 million increase in selling, general, and
administrative expenses after taking out non-recurring transaction
costs, partially offset by a $0.4
million decrease in research and development expenses.
GAAP net loss for the first quarter of fiscal 2024 was
($6.0) million, or ($0.14) per basic and diluted share, compared to
GAAP net loss of ($4.5) million, or
$(0.11) per basic and diluted share,
for the first quarter of fiscal 2023.
Adjusted net loss (see Table A2) for the first quarter of fiscal
2024 was ($4.7) million, or
($0.11) per basic and diluted share,
excluding interest expense - amortization of debt discount,
non-recurring transaction costs, dividends accrued for
participating securities and accretion, and equity in loss of
equity method investee (Vision Bioenergy), net of tax. Adjusted net
loss for the first quarter of fiscal 2023, excluding interest
expense - amortization of debt discount, non-recurring transaction
costs, and dividends accrued for participating securities and
accretion was ($4.3) million, or
($0.10) per basic and diluted
share.
Adjusted EBITDA (see Table B) for the first quarter of fiscal
2024 was ($1.4) million compared to
adjusted EBITDA for the first quarter of fiscal 2023 of
($1.6) million.
Fiscal 2024 Guidance
S&W expects fiscal 2024 revenue to be within a range of
$76 to $82
million, representing an expected increase of 3% to 12%
compared to fiscal 2023 revenue of $73.5
million. Revenue from the Company's Double Team sorghum
solutions is expected to be $11.5 to
$14.0 million, representing an
increase of 77% to 115% compared to fiscal 2023. Adjusted EBITDA is
expected to be in the range of $(7.5)
million to $(4.0) million for
fiscal 2024, compared to adjusted EBITDA of $(9.3) million in fiscal 2023.
As the partnership with Shell is accounted for as an equity
method investment, it is not expected to have a material impact on
S&W's full-year financial results for fiscal 2024.
Conference Call
S&W Seed Company has scheduled a conference call for
Thursday, November 9, 2023, at
11:00am ET (8:00am PT) to review these results. Interested
parties can access the conference call by dialing (844) 861-5498 or
(412) 317-6580 or can listen via a live Internet webcast, which is
available in the Investor Relations section of the Company's
website at http://www.swseedco.com/investors. A teleconference
replay of the call will be available for seven days at (877)
344-7529 or (412) 317-0088, confirmation #4736548. A webcast replay
will be available in the Investor Relations section of the
Company's website at http://www.swseedco.com/investors for 30
days.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with
accounting principles generally accepted in the United States of America ("GAAP"), we have
provided the following non-GAAP financial measures in this release
and the accompanying tables: adjusted EBITDA; adjusted operating
expenses; as well as adjusted net loss and adjusted net loss per
share. We use these non-GAAP financial measures internally to
facilitate period-to-period comparisons and analysis of our
operating performance and liquidity, and believe they are useful to
investors as a supplement to GAAP measures in analyzing, trending
and benchmarking the performance and value of our business.
However, these measures are not intended to be a substitute for
those reported in accordance with GAAP. These measures may be
different from non-GAAP financial measures used by other companies,
even when similar terms are used to identify such measures.
For reconciliations of historical non-GAAP financial measures to
the most comparable financial measures under GAAP, see Tables A1,
A2, and B accompanying this release. We have not reconciled our
guidance for adjusted EBITDA for fiscal 2024 to net loss because
the reconciling line items that impact net loss, including interest
expense, non-cash stock-based compensation, and foreign currency
loss, among others, are uncertain or out of our control and cannot
be reasonably predicted. The actual amount of these items during
fiscal 2024 will have a significant impact on net loss.
Accordingly, a reconciliation of this non-GAAP measure to its most
directly comparable GAAP measure is not available without
unreasonable efforts.
In order to calculate these non-GAAP financial measures, we make
targeted adjustments to certain GAAP financial line items found on
our condensed consolidated statement of operations, backing out
non-recurring or unique items that we believe otherwise distort the
underlying results and trends of the ongoing business. We have
excluded the following items from one or more of our non-GAAP
financial measures for the periods presented:
Selling, general and administrative expenses; operating
expenses. We exclude from operating expenses a portion of
SG&A expense related to depreciation and amortization, non-cash
stock-based compensation, and non-recurring transaction costs. We
exclude non-recurring transaction costs from our SG&A expense
and total operating expenses to provide investors a method to
compare our operating results to prior periods and to peer
companies, as such amounts can vary significantly based on the
frequency of acquisitions and the magnitude of acquisition
expenses.
Foreign currency loss. The foreign currency loss
represents fluctuations from changes in exchange rates that
are uncertain or out of our control and cannot be reasonably
predicted. We believe it is useful to exclude this amount in order
to better understand our business performance and allow investors
to compare our results with peer companies.
Interest expense – amortization of debt discount.
Amortization of debt discount and debt issuance costs are primarily
related to our working capital lines of credit and term loans.
These amounts are non-cash charges and are unrelated to our core
performance during any particular period. We believe it is useful
to exclude these amounts in order to better understand our business
performance and allow investors to compare our results with peer
companies.
Interest expense, net. Interest expense, net primary
consists of interest incurred on our working capital credit
facilities, the MFP Loan, and equipment capital leases. We believe
it is useful to exclude these amounts to better understand our
business performance and allow investors to compare our results
with peer companies.
Dividends accrued for participating securities and
accretion. Dividends accrued for participating securities and
accretion relates to dividends accrued for the Series B convertible
preferred stock and the accretion for the discount related to the
warrants issued in conjunction with the Series B convertible
preferred stock. We believe it is useful to exclude these amounts
in order to better understand our business performance and allow
investors to compare our results with peer companies.
Equity in loss of equity method investee (Vision Bioenergy),
net of tax. This loss represents S&W's percentage of
Vision Bioenergy's loss for the three months ended September 30, 2023, as it has significant
influence in the Company. We believe it is useful to exclude this
amount in order to better understand our business performance
and allow investors to compare our results with peer companies.
Descriptions of the non-GAAP financial measures included in this
release and the accompanying tables are as follows:
Adjusted Operating Expenses. We define adjusted operating
expenses as GAAP operating expenses adjusted to exclude
depreciation and amortization, loss on disposal of property, plant
and equipment, and one-time, non-recurring expenses. We believe
that the use of adjusted operating expenses is useful to investors
and other users of our financial statements in evaluating our
operating performance because it provides a method to compare our
operating results to prior periods and to peer companies after
making adjustments for depreciation and amortization and amounts
that are not expected to recur.
Adjusted net loss and loss per share. We define adjusted
net loss as net loss attributable to S&W Seed Company less
interest expense – amortization of debt discount, non-recurring
transaction costs, dividends accrued for participating securities
and accretion and equity in loss of equity method investee (Vision
Bioenergy), net of tax. We believe that these non-GAAP financial
measures provide useful supplemental information for evaluating our
operating performance.
Adjusted EBITDA. We define adjusted EBITDA as net loss
attributable to S&W Seed Company adjusted to exclude interest
expense, net, interest expense – amortization of debt discount,
provision for (benefit from) income taxes, depreciation and
amortization, non-recurring transaction costs, non-cash stock-based
compensation, foreign currency loss, equity in loss of equity
method investee (Vision Bioenergy), net of tax, and include
dividends accrued for participating securities and accretion. We
believe that the use of adjusted EBITDA is useful to investors and
other users of our financial statements in evaluating our operating
performance because it provides them with an additional tool to
compare business performance across companies and across periods.
We use adjusted EBITDA in conjunction with traditional GAAP
operating performance measures as part of our overall assessment of
our performance, for planning purposes, including the preparation
of our annual operating budget, to evaluate the effectiveness of
our business strategies and to communicate with our board of
directors concerning our financial performance. Management does not
place undue reliance on adjusted EBITDA as its only measure of
operating performance. Adjusted EBITDA should not be considered as
a substitute for other measures of financial performance reported
in accordance with GAAP.
Financial Tables
For a complete press release including financial tables, please
view online at: https://swseedco.com/investors/press-releases/.
About S&W Seed Company
Founded in 1980, S&W Seed Company is a global multi-crop,
middle-market agricultural company headquartered in Longmont, Colorado. S&W's vision is to be
the world's preferred proprietary seed company which supplies a
range of sorghum, forage and specialty crop products that supports
the growing global demand for animal proteins and healthier
consumer diets. S&W is a global leader in proprietary alfalfa
and sorghum seeds with significant research and development,
production and distribution capabilities. S&W also has a
commercial presence in pasture and sunflower seeds, and through a
partnership, is focused on sustainable biofuel feedstocks primarily
within camelina. For more information, please visit
www.swseedco.com.
Safe Harbor Statement
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended
and such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. "Forward-looking statements" describe future expectations,
plans, results, or strategies and are generally preceded by words
such as "ability," "believe," "may," "future," "plan," "should" or
"expects." Forward-looking statements in this release include, but
are not limited to: our guidance on revenue and adjusted EBITDA for
the fiscal year ending June 30, 2024;
our success in developing stackable traits for prussic acid-free,
insect tolerance/resistance, second-generation post grass herbicide
and broad-spectrum herbicide in our sorghum products and in
becoming a key technology provider in sorghum; the success of our
operational initiatives to drive the business towards
profitability; and the outcome and timing of our evaluation of
potential avenues to unlock what we see as unrecognized value in
our international operations. You are cautioned that such
statements are subject to a multitude of risks and uncertainties
that could cause future circumstances, events, or results to differ
materially from those projected in the forward-looking statements,
including risks and uncertainties related to: market
adoption of products designed to support the energy transition and
customer demand for our partnership's products; the effects of
unexpected weather and geopolitical and macroeconomic events, such
as global inflation, bank failures, supply chain disruptions,
uncertain market conditions, the armed conflict in Sudan, the ongoing military conflict between
Russia and Ukraine and related sanctions and the war
between Israel and Hamas, on our
business and operations as well as those of our partnership, and
the extent to which they disrupt the local and global economies, as
well as our business and the businesses of our partnership, our
customers, distributors and suppliers; sufficiency of our
partnership's cash and access to capital in order to develop its
business; the sufficiency of our cash and access to capital in
order to meet our liquidity needs, including our ability to pay our
growers as our payment obligations come due; our need to comply
with the financial covenants included in our loan agreements,
refinance certain of our credit facilities and raise additional
capital in the future and our ability to continue as a "going
concern"; our potential transactions under negotiation may not
result in consummated transactions; changes in market conditions,
including any unexpected decline in commodity prices, may harm our
results of operations and revenue outlook; our proprietary seed
trait technology products, including Double Team™, may not yield
their anticipated benefits, including with respect to their impact
on revenues and gross margins; changes in the
competitive landscape and the introduction of competitive products
may negatively impact our results of operations; demand for our
Double Team™ sorghum solution may not be as strong as expected; our
business strategic initiatives may not achieve the expected
results; previously experienced logistical challenges in shipping
and transportation of our products may become amplified, delaying
our ability to recognize revenue and decreasing our gross margins;
we may be unable to achieve our efforts to drive growth, improve
gross margins and reduce operating expenses; the inherent
uncertainty and significant judgments and assumptions underlying
our financial guidance for fiscal 2024; and the risks associated
with our ability to successfully optimize and commercialize our
business. These and other risks are identified in our filings with
the Securities and Exchange Commission, including, without
limitation, our Annual Report on Form 10-K for the year ended
June 30, 2023 and in other filings
subsequently made by us with the Securities and Exchange
Commission. All forward-looking statements contained in this press
release speak only as of the date on which they were made and are
based on management's assumptions and estimates as of such date. We
do not undertake any obligation to publicly update any
forward-looking statements, whether as a result of the receipt of
new information, the occurrence of future events or
otherwise.
Company
Contact:
Mark Herrmann, Chief Executive
Officer
S&W Seed Company
Phone: (720)
593-3570
www.swseedco.com
Investor Contact:
Robert Blum
Lytham Partners, LLC
Phone: (602) 889-9700
sanw@lythampartners.com
www.lythampartners.com
S & W SEED
COMPANY
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
|
|
|
2023
|
|
|
2022
|
|
Revenue
|
|
$
|
16,432,466
|
|
|
$
|
19,865,865
|
|
Cost of
revenue
|
|
|
11,421,152
|
|
|
|
15,361,354
|
|
Gross profit
|
|
|
5,011,314
|
|
|
|
4,504,511
|
|
Operating
expenses
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
5,786,579
|
|
|
|
5,056,257
|
|
Research and
development expenses
|
|
|
1,086,512
|
|
|
|
1,515,380
|
|
Depreciation and
amortization
|
|
|
1,069,022
|
|
|
|
1,336,434
|
|
Gain on disposal of
property, plant and equipment loss
|
|
|
(32,955)
|
|
|
|
(3,660)
|
|
Total operating
expenses
|
|
|
7,909,158
|
|
|
|
7,904,411
|
|
Loss from
operations
|
|
|
(2,897,844)
|
|
|
|
(3,399,900)
|
|
Other (income)
expense
|
|
|
|
|
|
|
Foreign currency
loss
|
|
|
372,189
|
|
|
|
190,915
|
|
Interest expense -
amortization of debt discount
|
|
|
455,574
|
|
|
|
283,643
|
|
Interest expense -
convertible debt and other
|
|
|
1,405,767
|
|
|
|
786,679
|
|
Other
income
|
|
|
(37,560)
|
|
|
|
(44,270)
|
|
Loss before income
taxes
|
|
|
(5,093,814)
|
|
|
|
(4,616,867)
|
|
Provision for (benefit
from) income taxes
|
|
|
1,207
|
|
|
|
(101,664)
|
|
Loss before equity in
net earnings of affiliates
|
|
|
(5,095,021)
|
|
|
|
(4,515,203)
|
|
Equity in loss of
equity method investees, net of tax
|
|
|
861,896
|
|
|
|
—
|
|
Net loss
|
|
|
(5,956,917)
|
|
|
|
(4,515,203)
|
|
Loss attributable to
noncontrolling interests
|
|
|
(7,288)
|
|
|
|
(6,262)
|
|
Net loss attributable
to S&W Seed Company
|
|
$
|
(5,949,629)
|
|
|
$
|
(4,508,941)
|
|
|
|
|
|
|
|
|
Calculation of net loss
per share:
|
|
|
|
|
|
|
Net loss attributable
to S&W Seed Company
|
|
$
|
(5,949,629)
|
|
|
$
|
(4,508,941)
|
|
Dividends accrued for
participating securities and accretion
|
|
|
(120,045)
|
|
|
|
(114,061)
|
|
Net loss attributable
to common shareholders
|
|
$
|
(6,069,674)
|
|
|
$
|
(4,623,002)
|
|
|
|
|
|
|
|
|
Net loss attributable
to S&W Seed Company per common share, basic and
diluted
|
|
$
|
(0.14)
|
|
|
$
|
(0.11)
|
|
Weighted average number
of common shares outstanding, basic and diluted
|
|
|
43,009,221
|
|
|
|
42,604,020
|
|
TABLE
A1
|
|
|
|
|
|
|
|
S&W SEED
COMPANY
|
ITEMIZED
RECONCILIATION BETWEEN OPERATING EXPENSES AND NON-GAAP ADJUSTED
OPERATING EXPENSES
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Operating
expenses
|
|
$
|
7,909,158
|
|
|
$
|
7,904,411
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(1,069,022)
|
|
|
|
(1,336,434)
|
|
|
|
|
|
|
|
|
|
|
Non-recurring transaction costs
|
|
|
(162,232)
|
|
|
|
(73,493)
|
|
|
|
|
|
|
|
|
|
|
Loss
(gain) on disposal of property, plant and equipment
|
|
|
32,955
|
|
|
|
3,660
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted
operating expenses
|
|
$
|
6,710,859
|
|
|
$
|
6,498,144
|
|
|
TABLE
A2
|
|
|
|
|
|
|
|
S&W SEED
COMPANY
|
ITEMIZED
RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED NET
LOSS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Net loss attributable
to S&W Seed Company
|
|
$
|
(5,949,629)
|
|
|
$
|
(4,508,941)
|
|
|
|
|
|
|
|
|
|
|
Interest expense -
amortization of debt discount
|
|
|
455,574
|
|
|
|
283,643
|
|
|
|
|
|
|
|
|
|
|
Non-recurring
transaction costs
|
|
|
162,232
|
|
|
|
73,493
|
|
|
|
|
|
|
|
|
|
|
Dividends accrued for
participating securities and accretion
|
|
|
(120,045)
|
|
|
|
(114,061)
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
equity method investee (Vision Bioenergy), net of tax
|
|
|
776,973
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
loss
|
|
$
|
(4,674,895)
|
|
|
$
|
(4,265,866)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
loss attributable to
S&W Seed Company per common share, basic and
diluted
|
|
$
|
(0.11)
|
|
|
$
|
(0.10)
|
|
|
Weighted average number
of common shares outstanding, basic and diluted
|
|
|
43,009,221
|
|
|
|
42,604,020
|
|
|
TABLE
B
|
|
|
|
|
|
|
|
|
|
S&W SEED
COMPANY
|
|
|
ITEMIZED
RECONCILIATION BETWEEN NET INCOME (LOSS) AND NON-GAAP ADJUSTED
EBITDA
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
Net loss attributable
to S&W Seed Company
|
|
$
|
|
(5,949,629)
|
|
|
$
|
|
(4,508,941)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
|
1,405,767
|
|
|
|
|
742,409
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense -
amortization of debt discount
|
|
|
|
455,574
|
|
|
|
|
283,643
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit
from) income taxes
|
|
|
|
1,207
|
|
|
|
|
(101,664)
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
1,069,022
|
|
|
|
|
1,336,434
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring
transaction costs
|
|
|
|
162,232
|
|
|
|
|
73,493
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash stock-based
compensation
|
|
|
|
411,820
|
|
|
|
|
456,112
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
loss
|
|
|
|
372,189
|
|
|
|
|
190,915
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
equity method investee (Vision Bioenergy), net of tax
|
|
|
|
776,973
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends accrued for
participating securities and accretion
|
|
|
|
(120,045)
|
|
|
|
|
(114,061)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted
EBITDA
|
|
$
|
|
(1,414,890)
|
|
|
$
|
|
(1,641,660)
|
|
|
|
|
|
|
|
|
|
|
|
|
S & W SEED
COMPANY
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
September 30, 2023
|
|
|
|
As of
June 30, 2023
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
|
987,422
|
|
|
$
|
|
3,398,793
|
|
Accounts receivable,
net
|
|
|
|
27,945,969
|
|
|
|
|
24,622,727
|
|
Notes receivable,
net
|
|
|
|
6,910,691
|
|
|
|
|
6,846,897
|
|
Inventories,
net
|
|
|
|
42,941,333
|
|
|
|
|
45,098,268
|
|
Prepaid expenses and
other current assets
|
|
|
|
3,359,517
|
|
|
|
|
4,099,027
|
|
TOTAL CURRENT
ASSETS
|
|
|
|
82,144,932
|
|
|
|
|
84,065,712
|
|
Property, plant and
equipment, net
|
|
|
|
9,769,222
|
|
|
|
|
10,082,168
|
|
Intellectual property,
net
|
|
|
|
21,304,305
|
|
|
|
|
21,650,534
|
|
Other Intangibles,
net
|
|
|
|
7,758,855
|
|
|
|
|
8,082,325
|
|
Right of use asset -
operating leases
|
|
|
|
3,340,651
|
|
|
|
|
2,983,303
|
|
Equity method
investments
|
|
|
|
22,176,338
|
|
|
|
|
23,059,705
|
|
Other assets
|
|
|
|
2,327,714
|
|
|
|
|
2,066,081
|
|
TOTAL
ASSETS
|
|
$
|
|
148,822,017
|
|
|
$
|
|
151,989,828
|
|
LIABILITIES,
MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
|
17,076,594
|
|
|
$
|
|
13,312,180
|
|
Deferred
revenue
|
|
|
|
306,758
|
|
|
|
|
464,707
|
|
Accrued expenses and
other current liabilities
|
|
|
|
10,514,049
|
|
|
|
|
8,804,456
|
|
Current portion of
working capital lines of credit, net
|
|
|
|
41,593,630
|
|
|
|
|
44,900,779
|
|
Current portion of
long-term debt, net
|
|
|
|
3,938,493
|
|
|
|
|
3,808,761
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
|
73,429,524
|
|
|
|
|
71,290,883
|
|
Long-term working
capital lines of credit, less current portion
|
|
|
|
—
|
|
|
|
|
—
|
|
Long-term debt, net,
less current portion
|
|
|
|
4,786,699
|
|
|
|
|
4,499,334
|
|
Other non-current
liabilities
|
|
|
|
2,382,695
|
|
|
|
|
2,102,030
|
|
TOTAL
LIABILITIES
|
|
|
|
80,598,918
|
|
|
|
|
77,892,247
|
|
MEZZANINE
EQUITY
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.001 par value; 3,323 shares authorized; 1,695 issued
and outstanding at
September 30, 2023 and June 30, 2023
|
|
|
|
5,394,193
|
|
|
|
|
5,274,148
|
|
TOTAL MEZZANINE
EQUITY
|
|
|
|
5,394,193
|
|
|
|
|
5,274,148
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value; 75,000,000 shares authorized; 43,047,951
issued and 43,022,951
outstanding at September 30, 2023; 43,004,011 issued
and 42,979,011
outstanding at June 30, 2023
|
|
|
|
43,048
|
|
|
|
|
43,004
|
|
Treasury stock, at
cost, 25,000 shares
|
|
|
|
(134,196)
|
|
|
|
|
(134,196)
|
|
Additional paid-in
capital
|
|
|
|
168,011,474
|
|
|
|
|
167,768,104
|
|
Accumulated
deficit
|
|
|
|
(98,002,482)
|
|
|
|
|
(91,932,808)
|
|
Accumulated other
comprehensive loss
|
|
|
|
(7,148,770)
|
|
|
|
|
(6,987,791)
|
|
Noncontrolling
interests
|
|
|
|
59,832
|
|
|
|
|
67,120
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
|
|
|
62,828,906
|
|
|
|
|
68,823,433
|
|
TOTAL LIABILITIES,
MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
|
|
$
|
|
148,822,017
|
|
|
$
|
|
151,989,828
|
|
S & W SEED
COMPANY
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
2023
|
|
|
|
2022
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
|
(5,956,917)
|
|
|
$
|
|
(4,515,203)
|
|
Adjustments to
reconcile net loss from operating activities to net cash used in
operating activities:
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
|
411,820
|
|
|
|
|
456,112
|
|
Allowance for
doubtful accounts
|
|
|
|
165,342
|
|
|
|
|
(155,421)
|
|
Inventory
write-down
|
|
|
|
376,168
|
|
|
|
|
537,998
|
|
Depreciation and
amortization
|
|
|
|
1,069,022
|
|
|
|
|
1,336,434
|
|
Gain on disposal
of property, plant and equipment
|
|
|
|
(32,955)
|
|
|
|
|
(3,660)
|
|
Equity in loss
of equity method investees, net of tax
|
|
|
|
861,896
|
|
|
|
|
—
|
|
Change in
deferred tax provision
|
|
|
|
13,730
|
|
|
|
|
—
|
|
Change in
foreign exchange contracts
|
|
|
|
64,127
|
|
|
|
|
503,985
|
|
Foreign currency
transactions
|
|
|
|
(329,196)
|
|
|
|
|
(1,294,985)
|
|
Amortization of
debt discount
|
|
|
|
455,574
|
|
|
|
|
283,643
|
|
Accretion of
note receivable
|
|
|
|
(63,738)
|
|
|
|
|
—
|
|
Changes
in:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
|
(3,712,963)
|
|
|
|
|
(8,996,608)
|
|
Inventories
|
|
|
|
1,703,845
|
|
|
|
|
3,124,383
|
|
Prepaid expenses
and other current assets
|
|
|
|
574,099
|
|
|
|
|
(216,080)
|
|
Other
non-current assets
|
|
|
|
33,551
|
|
|
|
|
72,381
|
|
Accounts
payable
|
|
|
|
3,985,916
|
|
|
|
|
1,671,381
|
|
Deferred
revenue
|
|
|
|
(156,719)
|
|
|
|
|
361,348
|
|
Accrued expenses
and other current liabilities
|
|
|
|
1,291,682
|
|
|
|
|
(436,714)
|
|
Other
non-current liabilities
|
|
|
|
40,394
|
|
|
|
|
(48,989)
|
|
Net cash
provided by (used in) operating activities
|
|
|
|
794,678
|
|
|
|
|
(7,319,995)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
|
(239,434)
|
|
|
|
|
(151,376)
|
|
Proceeds from disposal
of property, plant and equipment
|
|
|
|
92,656
|
|
|
|
|
3,660
|
|
Net cash
used in investing activities
|
|
|
|
(146,778)
|
|
|
|
|
(147,716)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net proceeds from sale
of common stock
|
|
|
|
(153,230)
|
|
|
|
|
—
|
|
Taxes paid related to
net share settlements of stock-based compensation awards
|
|
|
|
(15,176)
|
|
|
|
|
(8,210)
|
|
Borrowings and
repayments on lines of credit, net
|
|
|
|
(2,860,874)
|
|
|
|
|
6,750,048
|
|
Borrowings of long-term
debt
|
|
|
|
201,322
|
|
|
|
|
266,734
|
|
Repayments of long-term
debt
|
|
|
|
(131,709)
|
|
|
|
|
(457,929)
|
|
Debt issuance
costs
|
|
|
|
(140,304)
|
|
|
|
|
(128,879)
|
|
Net cash
provided by (used in) financing activities
|
|
|
|
(3,099,971)
|
|
|
|
|
6,421,764
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
|
|
40,700
|
|
|
|
|
213,839
|
|
NET DECREASE IN CASH
& CASH EQUIVALENTS
|
|
|
|
(2,411,371)
|
|
|
|
|
(832,108)
|
|
CASH AND CASH
EQUIVALENTS, beginning of the period
|
|
|
|
3,398,793
|
|
|
|
|
2,056,508
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
$
|
|
987,422
|
|
|
$
|
|
1,224,400
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/sw-announces-first-quarter-fiscal-2024-financial-results-301982670.html
SOURCE S&W Seed Company