LONGMONT, Colo., Nov. 19,
2024 /PRNewswire/ -- S&W Seed Company (Nasdaq:
SANW) today announced preliminary financial results for the three
months ended September 30, 2024.
Operational Highlights
- The Voluntary Administration, or VA, process expected to
conclude this month as it pertains to S&W Australia.
- Following the completion of the VA process, S&W is
primarily focused on its core Americas based operations, led by its
high margin Double Team sorghum solutions.
- S&W introduces new guidance for fiscal 2025 which includes
adjusted EBITDA for the remaining three quarters of fiscal 2025
(period from October 1, 2024 to
June 30, 2025) to be between
approximately ($1.9) million and
$0.1 million.
Financial Highlights
- Preliminary financial highlights for the first quarter are
broken out between continuing operations and discontinued
operations for the three months ended September 30, 2024 and 2023. Discontinued
operations relate to S&W Australia and relates to activity from
July 1, 2024 to July 24, 2024, the date S&W no longer
retained control of S&W Australia for accounting purposes due
to the VA, for the three months ended September 30, 2024.
- Preliminary revenue for the first quarter of fiscal 2025 is
expected to be $8.3 million, a 22.8%
decrease compared to the first quarter of fiscal 2024.
- Preliminary gross profit margin for the first quarter of fiscal
2025 is expected to be 16.1%, a decrease from 25.3% in the first
quarter of fiscal 2024.
- Preliminary adjusted EBITDA is expected to be ($3.1) million for the first quarter of fiscal
2025 compared to ($1.7) million for
the first quarter of fiscal 2024.
Management Discussion
"As a result of the VA process, which is expected to be
completed this month, on a go forward basis S&W will be
exclusively focused on its core U.S.-based operations led by our
high margin Double Team sorghum solutions," commented S&W Seed
Company's CEO, Mark Herrmann. "The
enthusiasm of growers towards Double Team is high. We believe we
have a robust commercial plan in place to drive continued adoption
of Double Team, while at the same time expanding our focus on new
high value solutions through the planned launch of our Prussic Acid
Free trait this fiscal year. This is then expected to lead to the
introduction of our first "stacked trait" by combining Double Team
and Prussic Acid Free into a single seed option which adds
incremental value for farmers. High-value, trait technology
solutions will be a key driver to S&W's long-term success as we
are working to become the key technology provider in sorghum."
"While we maintain a focus on growing our high value trait
solutions, we are similarly focused on driving efficiencies across
our production and operating operations. Our guidance indicates
continued strong improvement in gross margins, coupled with a
reduction in operating expenses, which is paving the way for us to
approach positive adjusted EBITDA performance. In fact, we are
expecting the high end of our range to be at adjusted EBITDA
breakeven for the rest of fiscal 2025. This would be a significant
potential milestone if we can achieve our expectations," Herrmann
concluded.
Preliminary Financial Results
The preliminary results set forth above are based on
management's initial review of the Company's results as of and for
the quarter ended September 30, 2024
and are subject to revision based upon the Company's quarter-end
closing procedures and the completion and external review of the
company's quarter-end financial statements. Certain details,
largely pertaining to the VA process which are expected to impact
financial results below the continuing operations line are not
provided in today's announcement. Actual results may differ
materially from these preliminary results as a result of the
completion of quarter-end closing procedures, final adjustments and
other developments arising between now and the time that Company's
financial results are finalized, and such changes could be
material. In addition, these preliminary results are not a
comprehensive statement of the company's financial results for the
quarter ended September 30, 2024,
should not be viewed as a substitute for full financial statements
prepared in accordance with generally accepted accounting
principles, and are not necessarily indicative of the Company's
results for any future period.
Please note that the accounting requirements for reporting the
S&W Australia business going forward will be classified as a
discontinued operation upon the entry into VA on July 24, 2024. Accordingly, the Company's
preliminary consolidated financial information for all periods
presented reflect the S&W Australia business as a discontinued
operation.
Preliminary total revenue for the first quarter of fiscal 2025
is expected to be $8.3 million
compared to total revenue for the first quarter of fiscal 2024 of
$10.8 million. The year ago period
included approximately $5.6 million
pertaining to S&W Australia which is no longer included in the
comparative results.
Preliminary gross profit margin for the first quarter of fiscal
2025 is expected to be 16.1% compared to gross profit margin for
the first quarter of fiscal 2024 of 25.3%.
Preliminary GAAP operating expenses for the first quarter of
fiscal 2025 is expected to be $5.6
million compared to GAAP operating expenses for the first
quarter of fiscal 2024 of $5.7
million.
Preliminary adjusted EBITDA for the first quarter of fiscal 2025
is expected to be ($3.1) million
compared to adjusted EBITDA for the first quarter of fiscal 2024 of
($1.7) million.
S&W Australia
The VA process involving S&W Australia is expected to
conclude this month. S&W is not expected to regain control of
S&W Australia following the completion of the VA process and
will primarily be focused on its core Americas based operations,
led by its high margin Double Team sorghum solutions.
Fiscal 2025 Guidance
S&W expects fiscal 2025 revenue to be within a range of
$34.5 to $38
million. This includes approximately $4.1 million of international sales in the just
completed first quarter of fiscal 2025. Adjusted EBITDA is expected
to be in the range of ($5.0) million
to ($3.0) million for fiscal 2025.
Adjusted EBITDA for the first quarter of fiscal 2025 was
($3.1) million indicating that the
Company expects adjusted EBITDA for the remaining three quarters of
the fiscal year to be in a range of ($1.9) to $0.1
million.
Conference Call
S&W has scheduled a conference call for Tuesday, November 19, 2024, at 11:00am ET (8:00am
PT) to review preliminary 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 S&W's website at
http://www.swseedco.com/investors or
https://app.webinar.net/w84a50KDn6v. A teleconference replay of the
call will be available for seven days at (877) 344-7529 or (412)
317-0088, replay access code 7451994. A webcast replay will be
available in the Investor Relations section of S&W's website at
http://www.swseedco.com/investors or
https://app.webinar.net/w84a50KDn6v for 30 days.
About S&W Seed Company
Founded in 1980, S&W 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," "intends"
"should" or "expects." Forward-looking statements in this release
include, but are not limited to: the timing of the resolution of
the VA; our success in growing and expanding our Double Team
operations in the Americas and driving the continued adoption of
Double Team Grain Sorghum; our expected timelines for the
development and launch of our planned products and the anticipated
commercial success of such products; the shift in revenue towards
our higher margin products and the expected continued increase in
profit margins; and the success of our cost-saving, production
optimization and operational initiatives to reduce operating
expenses and drive our business towards profitability. 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 conflict
in the Middle East, 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 and to meet any
obligations resulting from the VA; 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";
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 goals to drive growth, improve gross margins
and reduce operating expenses; the inherent uncertainty and
significant judgments and assumptions underlying our financial
guidance; 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,
2024 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
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SOURCE S&W Seed Company