Longmont, CO (November 19, 2024) — S&W Seed Company (Nasdaq: SANW) 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.

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.