S&W Seed Company (NASDAQ:SANW) Q3 2024 Earnings Conference Call May 14, 2024 11:00 AM ET Company Participants Robert Blum - Lytham Partners Mark Herrmann - CEO Vanessa Baughman - CFO Conference Call Participants Benjamin Klieve - Lake Street Capital Markets Kurt Caramanidis - Carl M. Hennig, Inc. Operator Good day, and welcome to the S&W Seed Company Third Quarter Fiscal Year 2024 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note this eve ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 001-34719 S&W SEED COMPANY (Exact Name of Registrant as Specified in Its Charter) (State or Other Juris ...

Management Discussion S&W Announces Third Quarter Fiscal 2024 Financial Results LONGMONT, Colorado – May 14, 2024 – S&W Seed Company (Nasdaq: SANW) today announced financial results for the three months ended March 31, 2024. Financial Highlights "S&W's commercial launch of Double Team has gone exceedingly well, with expectations for the proprietary, high-value sorghum trait technology to be planted on more than 10% of all sorghum acres in the United States in 2024," commented S&W Seed Company's CEO, Mark He ...

S&W Seed Company (NASDAQ:SANW) Q2 2024 Earnings Conference Call February 14, 2024 11:00 AM ET Company Participants Robert Blum - Lytham Partners, LLC Mark Herrmann - Chief Executive Officer Vanessa Baughman - Chief Financial Officer Conference Call Participants Ben Klieve - Lake Street Operator Good day, and welcome to the S&W Seed Company Second Quarter Fiscal Year 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there ...

Strategic Focus and Partnerships - The company has maintained its strategic focus on sorghum and is positioned to be a leading technology provider for this crop, with the Double Team grain sorghum solution gaining traction since its fiscal 2022 launch [129]. - A partnership with Equilon Enterprises LLC and Vision Bioenergy was established to develop camelina and other oilseed species, with over 7,000 acres planted and initial grain production expected later this year [131]. - The company is exploring new revenue opportunities through the expansion of non-GMO product lines and entry into gene-edited markets [142]. Financial Performance - Revenue for the three months ended December 31, 2023, was $10,864,809, a decrease of 16.0% compared to $12,937,802 in the same period of 2022 [153]. - Revenue for the six months ended December 31, 2023, was $27,297,275, a decrease of 16.8% from $32,803,667 in the same period of 2022 [167]. - The net loss for the three months ended December 31, 2023, was $6,494,046, compared to a net loss of $5,990,593 in the same period of 2022, representing an 8.4% increase in loss [167]. - The loss before income taxes for the six months ended December 31, 2023, was $11,668,516, compared to a loss of $10,885,741 in the same period of 2022, reflecting a 7.2% increase in loss [167]. Cost Management and Expenses - In fiscal 2024, the company expects to recognize improvements in seed cost position due to operational efficiency plans, with a focus on reducing obsolescence costs and optimizing low-margin product lines [130]. - Selling, general and administrative expenses decreased by $0.3 million, primarily due to a reduction in compensation and benefits [156]. - Research and development expenses decreased by $0.5 million, reflecting management's cost reduction efforts and a narrowed focus on R&D programs [157]. - Research and development expenses decreased by $0.9 million year-over-year, primarily due to a $0.5 million decrease in salaries and a $0.4 million decrease in other R&D expenses [171]. Tax and Interest Expenses - The effective tax rate is influenced by various factors, including differences in expense deductibility and projections of taxable income, leading to valuation allowances on deferred tax assets in certain jurisdictions [152]. - The effective tax rate for the three months ended December 31, 2023, was 10.6%, compared to 4.5% in the same period of 2022, primarily due to a valuation allowance against deferred tax assets [164]. - Interest expense, net, increased by $0.2 million, primarily due to higher average borrowings and increased interest rates on working capital credit facilities [163]. - Interest expense increased by $0.9 million, mainly due to higher average borrowings and increased interest rates on working capital credit facilities [176]. Cash Flow and Financing - The company reported a net cash decrease of $2.3 million for the six months ended December 31, 2023, with cash and cash equivalents at the end of the period totaling $1.1 million [192]. - Operating activities generated $1.4 million in cash, with a $5.0 million increase in deferred revenue contributing significantly to cash flow [193]. - The company expects to meet cash requirements over the next 12 months through cash flow from operations and existing debt facilities, including $1.0 million from Trigall and $6.0 million from Shell [184]. - The CIBC Loan Agreement was amended to eliminate certain covenants and increase the interest rate margin by 0.5% per annum [186]. Market and Operational Challenges - The armed conflict in Sudan and geopolitical tensions in the Middle East have disrupted shipping and may impact sales, particularly in Saudi Arabia, where government subsidies are shifting production focus [136][137]. - Logistical challenges, including limited truck availability and port congestion, are expected to persist throughout fiscal 2024, potentially delaying revenue recognition [139]. - Inflationary pressures on labor and commodity prices impacted results during the six months ended December 31, 2023, with expectations of continued effects throughout fiscal year 2024 [199]. - The company expects to manage inflationary costs through selective price increases and changes in product mix [199]. Investment Activities - Investing activities during the six months ended December 31, 2023 used $1.0 million in cash, primarily due to $1.1 million in additions to property, plant, and equipment [195]. - Investing activities during the six months ended December 31, 2022 provided $2.2 million in cash, mainly from a partnership transaction and sale of shares [196]. Equity Investments and Losses - The company had a loss of $1.5 million related to equity investments in Vision Bioenergy and Trigall Australia [178]. - The company has had negative cash flow from operations for several years, necessitating reliance on equity and debt financings for operational funding [183]. - For the six months ended December 31, 2022, operating activities used $8.3 million in cash, with a net loss excluding non-cash items of $8.0 million [194]. Receivables and Deferred Tax Assets - The company regularly assesses the collectability of receivables, providing an allowance for doubtful accounts based on historical collection experience [210]. - The company anticipates that changes in market conditions could materially affect the realization of deferred tax assets [206]. - The company evaluates the assumptions used to value stock awards on a quarterly basis, which may significantly affect share-based compensation expense [205].

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $16.4 million, down from $19.9 million in Q1 of the previous year [27] - Adjusted EBITDA for Q1 2024 improved to a negative $1.4 million from a negative $1.6 million in Q1 of fiscal 2023, reflecting a $0.2 million improvement [24] - GAAP net loss for Q1 fiscal 2024 was a negative $6 million, or a negative $0.14 per share, compared to a negative $4.5 million, or a negative $0.11 per share in Q1 of the last fiscal year [24] Business Line Data and Key Metrics Changes - Forage revenues constituted approximately 86% of total revenues during the first quarter [10] - U.S. forage sales were $2.4 million, down from $3.8 million last year, while sorghum sales increased to $2.3 million from $1.8 million [27] - Double-team sorghum sales reached $0.5 million, compared to virtually no sales in Q1 of the prior year [27] Market Data and Key Metrics Changes - MENA region saw a $2.9 million decrease in sales due to market disruptions from cheaper European seed [21] - Mexico experienced a $1.6 million decrease in non-dormant alfalfa sales due to wet conditions [21] - South Africa sorghum sales increased by $1 million from a new customer [21] Company Strategy and Development Direction - The company is focusing on operational initiatives to drive profitability, including lifecycle management and cost reduction plans [9] - Continued development of double-team grain sorghum is a priority, with expectations for total sorghum trade revenue to be between $11.5 to $14 million, representing a 77% to 115% increase compared to fiscal 2023 [12][28] - The company is also expanding its international market presence, particularly in countries like Mexico, Argentina, Brazil, and Australia [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the gross margin improvement and operational effectiveness, aiming to align with best-in-class seed industry standards [19] - The company anticipates maintaining full-year gross margins between 24% and 26%, compared to 19.8% in fiscal 2023 [23] - Management acknowledged potential short-term risks in the alfalfa market but sees a longer-term positive outlook due to reduced competition [40][41] Other Important Information - The company is set to receive a $6 million payment from Shell in February 2024, which is expected to cover cash operating needs for the year [32] - The Australian business is undergoing restructuring to optimize production capabilities and drive down costs [18] Q&A Session Summary Question: Update on Australian operations and restructuring - Management confirmed ongoing evaluations in Australia to enhance efficiency and profitability, with plans for future announcements [36][38] Question: Impact of low-cost alfalfa supply on business - Management noted the presence of low-cost supply but emphasized maintaining high-quality products and pricing strategies to protect margins [39][40] Question: Acreage for Prussic Acid-free trait - Management clarified that the acreage planted this year is primarily for trials and testing, with plans for broader production in the future [42]

Strategic Operations and Partnerships - The company has maintained its strategic path for operations and future growth in sorghum, with grower adoption of the Double Team grain sorghum solution accelerating since its fiscal 2022 launch [116]. - In fiscal 2023, the company entered into a partnership with Shell to develop camelina and other oilseed species, with over 7,000 acres of camelina planted and initial grain production expected later this year [118]. Revenue and Financial Performance - Revenue for the three months ended September 30, 2023, was $16.43 million, a decrease of $3.43 million (17.3%) compared to $19.87 million in the same period of 2022 [141]. - Cost of revenue decreased to $11.42 million, resulting in a gross profit of $5.01 million, with a gross margin improvement from 22.7% to 30.5% year-over-year [144]. - The net loss for the three months ended September 30, 2023, was $5.96 million, an increase of $1.44 million (31.9%) compared to a net loss of $4.52 million in the prior year [141]. - The effective tax rate for the three months ended September 30, 2023, was 0.0%, compared to 2.2% in the same period of 2022, primarily due to a valuation allowance against deferred tax assets [151]. Expenses and Cost Management - Selling, general and administrative expenses increased by $0.73 million (14.4%) to $5.79 million, driven by higher bad debt allowance and legal fees [145]. - Research and development expenses decreased by $0.43 million (28.3%) to $1.09 million due to cost reduction efforts [146]. - Interest expense increased by $0.62 million (78.7%) to $1.41 million, primarily due to higher average borrowings and interest rates [150]. - The company has reduced obsolescence costs through improved life cycle management and SKU optimization efforts, aiming for operational efficiency in fiscal 2024 [117]. Cash Flow and Liquidity - For the three months ended September 30, 2023, cash flows from operating activities were $794,678, a significant improvement compared to a cash outflow of $7,319,995 in the same period of 2022 [169]. - The net decrease in cash and cash equivalents for the three months ended September 30, 2023, was $2,411,371, compared to a decrease of $832,108 in the same period of 2022 [169]. - Cash and cash equivalents at the end of the period were $987,422, down from $1,224,400 at the end of the same period in 2022 [169]. - The company has had negative cash flow from operations for several years and will need additional funding to finance future operations [158]. Operational Challenges - The company shipped $1.4 million of its product to Sudan in Q1 of fiscal 2024 but does not expect additional sales in fiscal 2024 due to ongoing geopolitical conflicts [122]. - The company experienced numerous logistical challenges due to limited truck availability and port congestion, which are expected to persist throughout fiscal 2024 [126]. - The company anticipates fluctuations in product revenue due to the timing of customer orders and ongoing geopolitical and macroeconomic conditions [130]. - The company experienced inflationary pressures on labor and commodity prices, which impacted operations during the three months ended September 30, 2023, and is expected to continue throughout fiscal year 2024 [177]. Future Outlook and Compliance - The company expects to receive $1.0 million from Trigall in December 2023 and $6.0 million from Shell in February 2024 as part of partnership agreements [159]. - The CIBC Loan Agreement was amended to eliminate certain covenants and increase the interest rate margin by 0.5% per annum [161]. - The company is currently in compliance with loan agreements, but future compliance may be compromised, potentially leading to events of default [168]. - The company’s ability to raise additional capital may be limited, affecting its operations and financial condition [167]. - The company is assessing the impact of geopolitical and macroeconomic factors, including the COVID-19 pandemic and inflation, on its financial condition and operations [168].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 001-34719 S&W SEED COMPANY (Exact Name of Registrant as Specified in Its Charter) Nevada 27-1275784 (State or Ot ...

Financial Data and Key Metrics Changes - Total revenue for fiscal 2023 was $73.5 million, an increase from $71.4 million in fiscal 2022, primarily driven by a $4 million increase in Double Team sorghum sales in the U.S. domestic market [15][16] - GAAP gross margins improved significantly to 19.8% in fiscal 2023 from 8.9% in fiscal 2022, driven by higher-margin product sales and improved inventory management [16][71] - GAAP operating expenses decreased to $32.5 million in fiscal 2023 from $39.2 million in fiscal 2022, reflecting a focus on cost alignment [17][71] - Adjusted EBITDA improved to a negative $9.3 million in fiscal 2023 from a negative $23.6 million in fiscal 2022, marking a $14.3 million improvement [18][95] - GAAP net income for fiscal 2023 was $14.4 million, or $0.34 per share, compared to a net loss of $36.4 million in fiscal 2022 [86] Business Line Data and Key Metrics Changes - Double Team sorghum sales increased to $6.5 million in fiscal 2023 from $2.4 million in fiscal 2022, with expectations for further growth to $11.5 million to $14 million in fiscal 2024 [10][70][108] - Revenue from nondormant alfalfa sales in the Middle East and North Africa increased by $4 million, while sales in Australia decreased by $4.3 million due to adverse weather conditions [15] - The company anticipates overall sorghum-related revenue to be between $22 million and $23 million in fiscal 2024, up from $18.5 million in fiscal 2023 [108] Market Data and Key Metrics Changes - The company expects revenue from international operations to be between $45 million and $50 million in fiscal 2024, compared to $43.6 million in fiscal 2023 [83] - The U.S. forage operation is projected to generate about $9 million in revenue for fiscal 2024, down from $10.8 million in the previous year [83] Company Strategy and Development Direction - The company aims to become a best-in-class seed company, focusing on operational excellence and data-driven decision-making [13][67] - A partnership with Shell for developing sustainable biofuel feedstocks is expected to strengthen the balance sheet with a total of $20 million in payments and debt assumption [4][80] - The company plans to launch a prussic acid-free trait for sorghum in 2025, alongside a second-generation post-grass herbicide trait [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of Double Team sorghum, expecting it to account for over 10% of U.S. sorghum acres in the upcoming year [73][108] - The company is taking a conservative approach to international operations, minimizing dependence on high-risk markets while still seeking growth opportunities [103] - Management highlighted the importance of maintaining margins and managing inventory effectively in a transitioning market [24][137] Other Important Information - The company has suspended investment in the stevia germplasm development program to focus resources on more promising areas [81][140] - The partnership with Vision Bioenergy Oilseeds LLC is expected to produce significant long-term opportunities for the company [80] Q&A Session Summary Question: Expectations versus reality for Double Team sales in 2023 - Management acknowledged that while Double Team sales grew significantly, they fell short of the $12 million target set previously, but expressed confidence in the product's market impact and future growth [113][114] Question: Impact of logistical delays on international sales - Management confirmed that logistical challenges have been a significant issue, particularly in the Middle East and North Africa, and emphasized efforts to streamline processes and improve fulfillment [126][127] Question: Future of non-Double Team sorghum sales - Management indicated that as Double Team gains traction, non-Double Team sales are expected to decline, but they will focus on maintaining margins in that segment [24][137]

S&W Seed Company (NASDAQ:SANW) Q3 2023 Earnings Conference Call May 11, 2023 11:00 AM ET Company Participants Robert Blum - Lytham Partners, LLC Mark Wong - President and Chief Executive Officer Vanessa Baughman - Interim Chief Financial Officer Elizabeth Horton - Executive Vice President and Chief Financial Officer Conference Call Participants Benjamin Klieve - Lake Street Capital Markets, LLC Gerard Sweeney - ROTH Capital Partners, LLC Operator Good morning, and welcome to the S&W Seed Company Third Quart ...