Revenue and Sales Performance - Revenue for the year ended June 30, 2021, was $84.0 million, an increase of $4.4 million from $79.6 million in 2020, primarily due to a $9.9 million increase in core product revenue [201]. - Core Revenue for the year ended June 30, 2021, was $69.8 million, representing an increase of $9.9 million or 16.6% compared to $59.9 million in 2020, largely attributed to the Pasture Genetics operation acquired in February 2020 [202]. - Sales into international markets accounted for 56% of total revenue for the year ended June 30, 2021, compared to 54% in 2020, while domestic revenue decreased to 44% from 46% [203]. - Total revenue for the year ended June 30, 2021, was $84.0 million, a 5.5% increase from $79.6 million in 2020 [204]. Operational Challenges - The company has experienced logistical challenges during the twelve months ended June 30, 2021, due to limited availability of trucks and rising shipping costs, which are expected to persist throughout fiscal 2022 [184]. - The company expects logistical challenges to persist throughout fiscal 2022, impacting operational efficiency and costs [207]. - The company has shifted sales activities to video conferencing due to COVID-19, which has been less effective than in-person sales efforts, potentially impacting sales cycles [183]. Financial Performance - Cost of revenue for the year ended June 30, 2021, was $70.4 million, representing 83.7% of total revenue, compared to 81.2% in 2020 [205][206]. - Gross profit margin decreased to 16.3% for the year ended June 30, 2021, down from 18.8% in the prior year, primarily due to logistical challenges and a higher concentration of lower-margin products [207]. - Selling, General and Administrative (SG&A) expenses totaled $21.9 million for the year ended June 30, 2021, a slight increase from $21.3 million in 2020, with SG&A as a percentage of revenue decreasing to 26.0% [209]. - Research and development expenses increased to $8.5 million for the year ended June 30, 2021, up from $7.3 million in 2020, driven by investments in wheat and hybrid programs [210]. - Interest expense rose to $2.3 million for the year ended June 30, 2021, compared to $2.0 million in 2020, primarily due to increased borrowing levels [216]. Cash Flow and Financing - The company has had negative cash flow from operations for several years and anticipates needing additional funds to finance future operations [224]. - For the year ended June 30, 2021, cash flows from operating activities used $14,221,042, compared to $5,763,627 for the previous year [241]. - The net loss plus adjustments for non-cash items for the year ended June 30, 2021 was $15.8 million, with changes in operating assets and liabilities providing $1.6 million in cash [242]. - Financing activities provided $10,892,685 in cash for the year ended June 30, 2021, including net proceeds from the sale of common stock of $10.2 million [247]. Debt and Credit Facilities - The CIBC Credit Facility provides a $25.0 million credit line, with amounts due payable in full by December 23, 2022 [227]. - As of June 30, 2021, S&W Australia had debt facilities with NAB guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $11,247,000) [232]. - The consolidated debt facilities with NAB provide up to AUD $35,500,000 (USD $26,617,900) of credit, including an overdraft line of AUD $3,000,000 (USD $2,249,400) and a borrowing base line of AUD $26,000,000 (USD $19,494,800) [233]. - As of June 30, 2021, S&W Australia was in compliance with all debt covenants under its debt facilities with NAB [234]. Asset Management - The company recorded a gain on the disposal of property, plant, and equipment related to the sale of its Five Points facility [212]. - Investing activities provided $2,465,746 in cash for the year ended June 30, 2021, primarily from the disposal of property and equipment [244]. - The goodwill balance at June 30, 2021, related to the February 2020 acquisition of Pasture Genetics, showed no impairment for the year [256]. - A write-down of inventory amounting to $1.4 million was recognized during the year ended June 30, 2021, primarily due to deterioration in quality and germination rates of certain inventory lots [264]. - The company regularly assesses the collectability of receivables and provides an allowance for doubtful trade receivables based on historical collection experience and current economic conditions [265]. Future Outlook and Development - The company expects to introduce more than 25 new seed products during the 2021-2022 fiscal years, enhancing its product pipeline [177]. - The company plans to focus on high-value activities in research and development, particularly for alfalfa and sorghum, with fluctuating expenses based on project timing [193]. - The company maintains an active stevia development program, although it has yet to generate meaningful revenue [189]. - The company does not expect significant revenue from sales to Corteva in the future, as it has restructured its relationship and reduced reliance on alfalfa sales [179]. Share-Based Compensation - The company utilizes the Black-Scholes-Merton option pricing model for estimating the fair value of options granted under share-based compensation plans, considering factors such as expected term, stock price volatility, and risk-free interest rate [260]. - The Paycheck Protection Program loan of $1,958,600 was fully forgiven in March 2021 [237]. - The company had $3.1 million remaining available for sale under the At Market Issuance Sales Agreement as of September 27, 2021 [240].
S&W Seed pany(SANW) - 2021 Q4 - Annual Report