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 ...

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, 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) (State or Other Juris ...

Forward-Looking Statements Strategic Review In 2022, S&W underwent a strategic review to determine areas it believes are 'Key Centers of Value' and align its cost structure to drive revenue growth and value generation. 2019 (141,073) Est. FY 23 Growth Operating Expense Reduction $(2) - $(7) Million 1 Figures on this slide represent S&W Seed Company's estimates of future performance. Adjusted EBITDA is a non-GAAP financial measure; for further information, see "Non-GAAP Financial Measures" in the appendix. 2 ...

S&W Seed Company (NASDAQ:SANW) Q2 2023 Earnings Conference Call February 13, 2023 11:00 AM ET Company Participants Robert Blum - IR, Lytham Partners Mark Wong - President and Chief Executive Officer Betsy Horton - Chief Financial Officer Conference Call Participants Ben Klieve - Lake Street Gerry Sweeney - Roth Capital Operator Good day, and welcome to the S&W Seed Company’s Second Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please no ...