S&W Announces Fiscal 2023 Financial Results
- Revenue increase of 3.0% to $73.5 million
- Gross profit margin improvement from 8.9% to 19.8%
- GAAP net income of $14.4 million compared to net loss of $(36.4) million
- Adjusted EBITDA improvement of $14.3 million to $(9.3) million
- Partnership with Shell for biofuel feedstocks
- Evaluation of options for unlocking value in international operations
- None.
Financial Highlights
- Revenue for fiscal 2023 was
$73.5 million 3.0% increase compared to fiscal 2022. Double Team™ sorghum revenue was$6.5 million $2.4 million - GAAP gross profit margin for fiscal 2023 was
19.8% , a strong improvement from8.9% in fiscal 2022, reflective of the Company's execution on its gross margin expansion initiatives, including the revenue growth in its high margin Double Team sorghum solutions. - Operating expenses decreased by
$6.7 million $32.5 million $39.2 million - GAAP net income was
$14.4 million $0.34 $(36.4) million $(0.93) $38.2 million - Adjusted EBITDA (see Table B) improved by
$14.3 million $(9.3) million $(23.6) million U.S. Federal Employee Retention Credit.
Recent Highlights
- In February 2023, S&W entered into a partnership with Shell to develop and produce sustainable biofuel feedstocks. Refer to the Shell Partnership section below for further information.
- In May 2023, S&W announced that its Board of Directors, or Board, is evaluating potential avenues to unlock what the Company sees as unrecognized value in its international operations, which are headquartered within the Company's Australian subsidiary.
- In July 2023, seed industry veteran Mark Herrmann was appointed as Chief Executive Officer, or CEO, following the planned retirement of its previous CEO, Mark Wong, who remains on the Board.
Management Discussion
"S&W successfully executed on a number of strategic initiatives in fiscal 2023 to unlock value and position the Company for success going forward, including the successful launch of the Company's high value Double Team sorghum solutions, gross margin expansion, operating expense optimization and the establishment of a biofuels partnership with Shell," commented S&W's recently appointed CEO, Mark Herrmann. "The result was a
"Since taking over as CEO in July, we have moved quickly to define our business strategies to optimize results centered around best-in-class operational effectiveness of our broader sorghum technology program and forage operations. Grower adoption of our Double Team grain sorghum solution continues to rapidly accelerate since we launched the product in fiscal 2022, having captured an estimated
"Further, we have implemented a new series of operational initiatives to drive the business towards profitability in the near-term. This includes improved life cycle management to reduce obsolescence costs, as well as having a positive impact on working capital management; the rationalization of certain low margin forage product lines and seed treatments; suspension of our stevia development program; and a seed manufacturing cost reduction plan to improve operational efficiencies and align with best-in-class standards. Every organizational decision we make is expected to be data driven to ensure it will have a positive impact on our customers and shareholders going forward," Herrmann concluded.
Shell Partnership
On February 7, 2023, S&W announced the execution of an agreement to establish a partnership with Shell for the purpose of developing novel plant genetics for oilseed cover crops as feedstocks for biofuel production. The partnership company, named Vision Bioenergy Oilseeds LLC, or Vision Bioenergy, is
S&W contributed its expertise in seed research, technology, production, and processing to the partnership, including its seed processing and research facilities in
At closing, Shell paid
International Operations Update
In May 2023, S&W announced that its Board is evaluating potential avenues to unlock what the Company sees as unrecognized value in its international operations, which are headquartered within the Company's Australian subsidiary. S&W has retained Bell Potter Securities Limited as its financial advisor and to assist the Board in its evaluation. As part of the process, the Board expects to review a full range of potential alternatives, which may include an IPO/Australian public listing of S&W International, or a merger, reverse merger or other business combination or strategic transaction involving the Company's international operations – any of which would be expected to help improve strategic focus, enhance financial transparency, and better enable stakeholders to value separate components of the Company's businesses independently.
The Company cautions that there can be no assurance the Board's evaluation will result in a completed transaction, or any assurance as to its outcome or timing. S&W expects that the Board's evaluation will be completed in the second half of the 2023 calendar year. It does not intend to disclose any developments related to the process unless and until S&W executes a definitive agreement for a particular transaction, or the Board otherwise determines that further disclosure is appropriate or required.
Management Transition
Effective July 1, 2023, seed industry veteran Mark Herrmann was appointed as CEO following the planned retirement of its previous CEO, Mark Wong. Wong continues to serve as a member of S&W's Board. Herrmann has more than 35 years of experience in the seed industry, including as the CEO of AgReliant Genetics LLC, the 3rd largest North American Seed Corn company and leader in Soybeans and other supporting crops, headquartered in
Financial Results
Total revenue for fiscal 2023 was
GAAP gross margins for fiscal 2023 were
GAAP operating expenses for fiscal 2023 were
Adjusted operating expenses (see Table A1) for fiscal 2023 were
GAAP net income for fiscal 2023 was
Adjusted net loss (see Table A2) for fiscal 2023 was
Adjusted EBITDA (see Table B) for fiscal 2023 was
Fiscal 2024 Guidance
S&W expects fiscal 2024 revenue to be within a range of
As the partnership with Shell is accounted for as an equity method investment, it is not expected to have a material impact on S&W's full-year financial results for fiscal 2024.
Conference Call
S&W Seed Company has scheduled a conference call for Wednesday, September 27, 2023, at 11:00am ET (8:00am PT) to review these 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 the Company's website at http://www.swseedco.com/investors. A teleconference replay of the call will be available for seven days at (877) 344-7529 or (412) 317-0088, confirmation #1861963. A webcast replay will be available in the Investor Relations section of the Company's website at http://www.swseedco.com/investors for 30 days.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with accounting principles generally accepted in
For reconciliations of historical non-GAAP financial measures to the most comparable financial measures under GAAP, see Tables A1, A2, and B accompanying this release. We have not reconciled our guidance for adjusted EBITDA for fiscal 2024 to net income (loss) because the reconciling line items that impact net income (loss), including interest expense, non-cash stock-based compensation, and foreign currency (gain) loss, among others, are uncertain or out of our control and cannot be reasonably predicted. The actual amount of these items during fiscal 2024 will have a significant impact on net income (loss). Accordingly, a reconciliation of this non-GAAP measure to its most directly comparable GAAP measure is not available without unreasonable efforts.
In order to calculate these non-GAAP financial measures, we make targeted adjustments to certain GAAP financial line items found on our Consolidated Statement of Operations, backing out non-recurring or unique items or items that we believe otherwise distort the underlying results and trends of the ongoing business. We have excluded the following items from one or more of our non-GAAP financial measures for the periods presented:
Selling, general and administrative expenses; operating expenses. We exclude from operating expenses a portion of SG&A expense related to depreciation and amortization, non-cash stock-based compensation, other finance expenses, and non-recurring transaction costs. Other finance expenses represents the costs incurred when S&W was pursuing other lenders (prior to continuing with CIBC), which were written off in March 2023. These amounts are unrelated to our core performance. We exclude non-recurring transaction costs from our SG&A expense and total operating expenses to provide investors a method to compare our operating results to prior periods and to peer companies, as such amounts can vary significantly based on the frequency of acquisitions and the magnitude of acquisition expenses.
Gain on disposal of intangible assets. The gain is the result of our transfer of certain intellectual property rights under a license agreement to Trigall Australia as part of our equity investment in the partnership. This is a unique item unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Goodwill Impairment. The goodwill impairment charge relates to the full impairment of our goodwill and was a result of a decline in the market valuation of our common shares during the fourth quarter of 2022. This amount was a non-cash charge and is unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Change in contingent consideration obligation. The change in contingent consideration obligation represents our estimated change in the value of contingent earn-out related to the February 2020 acquisition of Pasture Genetics. These amounts are non-cash and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Foreign currency loss. The foreign currency loss represents fluctuations from changes in exchange rates that are uncertain or out of our control and cannot be reasonably predicted. We believe it is useful to exclude this amount in order to better understand our business performance and allow investors to compare our results with peer companies.
Interest expense – amortization of debt discount. Amortization of debt discount and debt issuance costs are primarily related to our working capital lines of credit and term loans. These amounts are non-cash charges and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Dividends accrued for participating securities and accretion. Dividends accrued for participating securities and accretion relates to dividends accrued for the Series B convertible preferred stock and the accretion for the discount related to the warrants issued in conjunction with the Series B convertible preferred stock. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Gain on sale of business interest. The gain on the sale of business interest relates to the gain S&W recognized from the Vision Bioenergy transaction, for which we have a
Gain on sale of equity investment. The gain on the sale of equity investment represents the stock sale from our Bioceres investment. We believe it is useful to exclude this amount in order to better understand our business performance and allow investors to compare our results with peer companies.
Equity in loss of equity method investee (Vision Bioenergy), net of tax. This loss represents S&W's percentage of Vision Bioenergy's loss for the year ended June 30, 2023, as it has significant influence in the Company. We believe it is useful to exclude this amount in order to better understand our business performance and allow investors to compare our results with peer companies.
Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:
Adjusted Operating Expenses. We define adjusted operating expenses as GAAP operating expenses, adjusted to exclude depreciation and amortization, loss on disposal of property, plant and equipment, and one-time expenses related to our two partnership transactions. We believe that the use of adjusted operating expenses is useful to investors and other users of our financial statements in evaluating our operating performance because it provides a method to compare our operating results to prior periods and to peer companies after making adjustments for depreciation and amortization and amounts that are not expected to recur.
Adjusted net loss and loss per share. We define adjusted net loss as net loss attributable to S&W Seed Company less interest expense – amortization of debt discount, other finance expenses, non-recurring transaction costs, change in contingent consideration obligation, dividends accrued for participating securities and accretion, gain on sale of business interest and equity in loss of equity method investee (Vision Bioenergy), net of tax. We believe that these non-GAAP financial measures provide useful supplemental information for evaluating our operating performance.
Adjusted EBITDA. We define adjusted EBITDA as GAAP net loss, adjusted to exclude interest expense, net, interest expense – amortization of debt discount, other finance expenses, provision for (benefit from) income taxes, depreciation and amortization, non-recurring transaction costs, non-cash stock-based compensation, foreign currency loss, gain on disposal of intangible assets, gain on sale of business interest, gain on sale of equity investment, equity in loss of equity method investee (Vision Bioenergy), net of tax, change in contingent consideration obligation, and dividends accrued for participating securities and accretion. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We use adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. Management does not place undue reliance on adjusted EBITDA as its only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP.
Financial Tables
For a complete press release including financial tables, please view online at: https://swseedco.com/investors/press-releases/.
About S&W Seed Company
Founded in 1980, S&W Seed Company is a global multi-crop, middle-market agricultural company headquartered in
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," "should" or "expects." Forward-looking statements in this release include, but are not limited to: our guidance on revenue and adjusted EBITDA for the fiscal year ending June 30, 2024; the expected timing of initial grain production by the partnership; the anticipated impact of the partnership on our business and future prospects, including our financial outlook going forward; the ability of Shell's cash contributions to the partnership company to fund the partnership's operations for a few years; our plans for the advancement of our business strategy; our expected increases in sorghum acre share in fiscal 2024; our success in developing stackable traits for prussic acid-free and insect tolerance in our sorghum products and in becoming a leading technology provider in sorghum; the success of our operational initiatives to drive the business towards profitability; and the outcome and timing of our evaluation of potential avenues to unlock what we see as unrecognized value in our international operations. 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 the 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
S & W SEED COMPANY | |||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
June 30. | June 30, | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Revenue | $ | 23,055,316 | $ | 20,004,331 | $ | 73,521,291 | $ | 71,354,298 | |||||||||
Cost of revenue | 20,201,509 | 21,141,616 | 58,983,210 | 64,999,136 | |||||||||||||
Gross profit | 2,853,807 | (1,137,285) | 14,538,081 | 6,355,162 | |||||||||||||
Operating expenses | |||||||||||||||||
Selling, general and administrative expenses | 5,141,568 | 6,209,945 | 22,430,687 | 24,470,730 | |||||||||||||
Research and development expenses | 1,010,881 | 1,700,470 | 5,237,772 | 7,710,642 | |||||||||||||
Depreciation and amortization | 1,071,265 | 1,375,767 | 4,768,809 | 5,460,321 | |||||||||||||
Disposal of property, plant and equipment loss (gain) | 11,422 | (45,045) | 44,335 | (31,088) | |||||||||||||
Goodwill impairment charges | — | 1,548,324 | — | 1,548,324 | |||||||||||||
Total operating expenses | 7,235,136 | 10,789,461 | 32,481,603 | 39,158,929 | |||||||||||||
Loss from operations | (4,381,329) | (11,926,746) | (17,943,522) | (32,803,767) | |||||||||||||
Other (income) expense | |||||||||||||||||
Foreign currency loss | 160,267 | 209,950 | 859,696 | 777,913 | |||||||||||||
Government grant income | — | — | (1,444,044) | — | |||||||||||||
Gain on disposal of intangible assets | — | — | (1,796,252) | — | |||||||||||||
Gain on sale of business interest | 156,404 | — | (38,167,102) | — | |||||||||||||
Gain on sale of equity investment | — | — | (32,030) | (68,967) | |||||||||||||
Change in contingent consideration obligation | — | — | — | (714,429) | |||||||||||||
Interest expense - amortization of debt discount | 416,341 | 238,306 | 1,975,938 | 898,497 | |||||||||||||
Interest expense - convertible debt and other | 1,141,528 | 598,183 | 4,184,067 | 2,333,575 | |||||||||||||
Other (income) expense | (45,528) | (107,527) | 1,552,154 | (121,273) | |||||||||||||
Income (loss) before income taxes | (6,210,341) | (12,865,658) | 14,924,051 | (35,909,083) | |||||||||||||
Provision for (benefit from) income taxes | 120,438 | (1,213) | (763,639) | 413,423 | |||||||||||||
Income (loss) before equity in net earnings of affiliates | (6,330,779) | (12,864,445) | 15,687,690 | (36,322,506) | |||||||||||||
Equity in loss of equity method investees, net of tax | 841,637 | — | 1,252,330 | — | |||||||||||||
Net income (loss) | (7,172,416) | (12,864,445) | 14,435,360 | (36,322,506) | |||||||||||||
(Loss) income attributable to noncontrolling interests | 41,924 | 30,905 | 25,282 | 72,844 | |||||||||||||
Net income (loss) attributable to S&W Seed Company | $ | (7,214,340) | $ | (12,895,350) | $ | 14,410,078 | $ | (36,395,350) | |||||||||
Calculation of net income (loss) per share: | |||||||||||||||||
Net income (loss) attributable to S&W Seed Company | $ | (7,214,340) | $ | (12,895,350) | $ | 14,410,078 | $ | (36,395,350) | |||||||||
Dividends accrued for participating securities and accretion | (120,070) | (113,103) | (469,329) | (166,298) | |||||||||||||
Net income (loss) attributable to common shareholders | $ | (7,334,410) | $ | (13,008,453) | $ | 13,940,749 | $ | (36,561,648) | |||||||||
Net income (loss) attributable to S&W Seed Company per common share: | |||||||||||||||||
Basic | $ | (0.17) | $ | (0.31) | $ | 0.34 | $ | (0.93) | |||||||||
Diluted | $ | (0.17) | $ | (0.31) | $ | 0.34 | $ | (0.93) | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||
Basic | 42,968,218 | 41,821,784 | 42,752,759 | 39,133,681 | |||||||||||||
Diluted | 43,121,498 | 41,821,784 | 42,935,551 | 39,133,681 | |||||||||||||
TABLE A1 | ||||||||||||||||||
S&W SEED COMPANY | ||||||||||||||||||
ITEMIZED RECONCILIATION BETWEEN OPERATING EXPENSES AND NON-GAAP ADJUSTED OPERATING EXPENSES | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
Three Months Ended | Year Ended June 30, | |||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
Operating expenses | $ | 7,235,136 | $ | 10,789,461 | $ | 32,481,603 | $ | 39,158,929 | ||||||||||
Less: | ||||||||||||||||||
Depreciation and amortization | (1,071,265) | (1,375,767) | (4,768,809) | (5,460,321) | ||||||||||||||
Non-recurring transaction costs | (274,434) | (138,489) | (1,240,274) | (138,489) | ||||||||||||||
Goodwill impairment | — | (1,548,324) | — | (1,548,324) | ||||||||||||||
Loss (gain) on disposal of property, plant and equipment | (11,422) | 45,045 | (44,335) | 31,088 | ||||||||||||||
Non-GAAP adjusted operating expenses | $ | 5,878,015 | $ | 7,771,926 | $ | 26,428,185 | $ | 32,042,883 | ||||||||||
TABLE A2 | ||||||||||||||||||
S&W SEED COMPANY | ||||||||||||||||||
ITEMIZED RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED NET INCOME (LOSS) | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
Three Months Ended | Year Ended June 30, | |||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
Net income (loss) attributable to S&W Seed Company | $ | (7,214,340) | $ | (12,895,350) | $ | 14,410,078 | $ | (36,395,350) | ||||||||||
Goodwill impairment charges | — | 1,548,324 | — | 1,548,324 | ||||||||||||||
Interest expense - amortization of debt discount | 416,341 | 238,306 | 1,975,938 | 898,497 | ||||||||||||||
Other finance expenses | — | — | 1,458,168 | — | ||||||||||||||
Non-recurring transaction costs | 274,434 | 138,489 | 1,240,274 | 138,489 | ||||||||||||||
Change in contingent consideration obligation | — | — | — | (714,429) | ||||||||||||||
Dividends accrued for participating securities and accretion | (120,070) | (113,103) | (469,329) | (166,298) | ||||||||||||||
Gain on sale of business interest | 156,404 | — | (38,167,102) | — | ||||||||||||||
Equity in loss of equity method investee (Vision Bioenergy), net of tax | 765,808 | — | 1,089,346 | — | ||||||||||||||
Non-GAAP adjusted net income (loss) | $ | (5,721,423) | $ | (11,083,334) | $ | (18,462,627) | $ | (34,690,767) | ||||||||||
Non-GAAP adjusted net income (loss) attributable to | ||||||||||||||||||
Basic | $ | (0.13) | $ | (0.27) | $ | (0.43) | $ | (0.89) | ||||||||||
Diluted | $ | (0.13) | $ | (0.27) | $ | (0.43) | $ | (0.89) | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||
Basic | 42,968,218 | 41,821,784 | 42,752,759 | 39,133,681 | ||||||||||||||
Diluted | 43,121,498 | 41,821,784 | 42,935,551 | 39,133,681 | ||||||||||||||
TABLE B | |||||||||||||||||||||
S&W SEED COMPANY | |||||||||||||||||||||
ITEMIZED RECONCILIATION BETWEEN NET INCOME (LOSS) AND NON-GAAP ADJUSTED EBITDA | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
June 30. | June 30, | ||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Net income (loss) attributable to S&W Seed Company | $ | (7,214,340) | $ | (12,895,350) | $ | 14,410,078 | $ | (36,395,350) | |||||||||||||
Interest expense, net | 1,141,528 | 490,656 | 4,184,067 | 2,212,302 | |||||||||||||||||
Interest expense - amortization of debt discount | 416,341 | 238,306 | 1,975,938 | 898,497 | |||||||||||||||||
Other finance expenses (Other expense) | — | — | 1,458,168 | — | |||||||||||||||||
Provision for (benefit from) income taxes | 120,438 | (1,213) | (763,639) | 413,423 | |||||||||||||||||
Depreciation and amortization | 1,071,265 | 1,375,767 | 4,768,809 | 5,460,321 | |||||||||||||||||
Goodwill impairment charges | — | 1,548,324 | — | 1,548,324 | |||||||||||||||||
Non-recurring transaction costs | 274,434 | 138,489 | 1,240,274 | 138,489 | |||||||||||||||||
Non-cash stock-based compensation | 549,522 | 445,372 | 1,932,416 | 2,267,180 | |||||||||||||||||
Foreign currency loss | 160,267 | 209,950 | 859,696 | 777,913 | |||||||||||||||||
Gain on disposal of intangible assets | — | — | (1,796,252) | — | |||||||||||||||||
Gain on sale of business interest | 156,404 | — | (38,167,102) | — | |||||||||||||||||
Gain on sale of equity investment | — | — | (32,030) | (68,967) | |||||||||||||||||
Equity in loss of equity method investee (Vision Bioenergy), net of tax | 765,808 | — | 1,089,346 | — | |||||||||||||||||
Change in contingent consideration obligation | — | — | — | (714,429) | |||||||||||||||||
Dividends accrued for participating securities and accretion | (120,070) | (113,103) | (469,329) | (166,298) | |||||||||||||||||
Non-GAAP adjusted EBITDA | $ | (2,678,403) | $ | (8,562,802) | $ | (9,309,561) | $ | (23,628,595) | |||||||||||||
S & W SEED COMPANY | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
As of June 30, | ||||||||||
2023 | 2022 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS | ||||||||||
Cash and cash equivalents | $ | 3,398,793 | $ | 2,056,508 | ||||||
Accounts receivable, net | 24,622,727 | 19,051,236 | ||||||||
Notes receivable, net | 6,846,897 | — | ||||||||
Inventories, net | 45,098,268 | 54,515,894 | ||||||||
Prepaid expenses and other current assets | 4,099,027 | 1,605,987 | ||||||||
TOTAL CURRENT ASSETS | 84,065,712 | 77,229,625 | ||||||||
Property, plant and equipment, net | 10,082,168 | 16,871,669 | ||||||||
Intellectual property, net | 21,650,534 | 23,035,925 | ||||||||
Other Intangibles, net | 8,082,325 | 11,059,902 | ||||||||
Right of use asset - operating leases | 2,983,303 | 4,094,253 | ||||||||
Equity method investments | 23,059,705 | 367,970 | ||||||||
Other assets | 2,066,081 | 1,128,507 | ||||||||
TOTAL ASSETS | $ | 151,989,828 | $ | 133,787,851 | ||||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | ||||||||||
CURRENT LIABILITIES | ||||||||||
Accounts payable | $ | 13,312,180 | $ | 15,901,116 | ||||||
Deferred revenue | 464,707 | 605,960 | ||||||||
Accrued expenses and other current liabilities | 8,804,456 | 10,788,740 | ||||||||
Current portion of working capital lines of credit, net | 44,900,779 | 12,678,897 | ||||||||
Current portion of long-term debt, net | 3,808,761 | 8,316,783 | ||||||||
TOTAL CURRENT LIABILITIES | 71,290,883 | 48,291,496 | ||||||||
Long-term working capital lines of credit, less current portion | — | 21,703,286 | ||||||||
Long-term debt, net, less current portion | 4,499,334 | 3,992,540 | ||||||||
Other non-current liabilities | 2,102,030 | 3,587,041 | ||||||||
TOTAL LIABILITIES | 77,892,247 | 77,574,363 | ||||||||
MEZZANINE EQUITY | ||||||||||
Preferred stock, | 5,274,148 | 4,804,819 | ||||||||
TOTAL MEZZANINE EQUITY | 5,274,148 | 4,804,819 | ||||||||
STOCKHOLDERS' EQUITY | ||||||||||
Common stock, | 43,004 | 42,609 | ||||||||
Treasury stock, at cost, 25,000 shares | (134,196) | (134,196) | ||||||||
Additional paid-in capital | 167,768,104 | 163,892,575 | ||||||||
Accumulated deficit | (91,932,808) | (105,873,557) | ||||||||
Accumulated other comprehensive loss | (6,987,791) | (6,560,600) | ||||||||
Noncontrolling interests | 67,120 | 41,838 | ||||||||
TOTAL STOCKHOLDERS' EQUITY | 68,823,433 | 51,408,669 | ||||||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | $ | 151,989,828 | $ | 133,787,851 | ||||||
S & W SEED COMPANY | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
Year Ended June 30, | ||||||||||
2023 | 2022 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income (loss) | $ | 14,435,360 | $ | (36,322,506) | ||||||
Adjustments to reconcile net loss from operating activities to net cash used in operating activities: | ||||||||||
Stock-based compensation | 1,932,416 | 2,267,180 | ||||||||
Allowance for doubtful accounts | 11,659 | 216,466 | ||||||||
Inventory write-down | 2,778,414 | 6,365,542 | ||||||||
Depreciation and amortization | 4,768,809 | 5,460,321 | ||||||||
Loss on disposal of property, plant and equipment | 44,335 | (31,088) | ||||||||
Gain on disposal of intangible assets | (1,796,252) | — | ||||||||
Gain on sale of business interest | (38,167,102) | — | ||||||||
Gain on sale of equity investment | (32,030) | — | ||||||||
Equity in loss of equity method investees, net of tax | 1,252,330 | — | ||||||||
Government grant income | (1,444,044) | — | ||||||||
Change in deferred tax provision | (806,479) | 78,954 | ||||||||
Change in foreign exchange contracts | (63,889) | 971,386 | ||||||||
Foreign currency transactions | 46,283 | — | ||||||||
Change in contingent consideration obligation | — | (714,429) | ||||||||
Amortization of debt discount | 1,975,938 | 898,497 | ||||||||
Accretion of note receivable | (99,763) | — | ||||||||
Changes in: | ||||||||||
Accounts receivable | (5,840,310) | (422,335) | ||||||||
Inventories | 5,755,856 | 688,903 | ||||||||
Prepaid expenses and other current assets | 84,605 | (104,442) | ||||||||
Other non-current asset | (27,950) | (137,320) | ||||||||
Accounts payable | (2,151,619) | 977,036 | ||||||||
Deferred revenue | (139,826) | 223,586 | ||||||||
Accrued expenses and other current liabilities | (1,344,945) | 1,226,353 | ||||||||
Other non-current liabilities | (149,946) | (15,243) | ||||||||
Net cash used in operating activities | (18,978,150) | (18,373,139) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Proceeds from sale of business interest | 7,000,000 | — | ||||||||
Proceeds from partnership transaction | 2,000,000 | — | ||||||||
Proceeds from disposal of property, plant and equipment | 1,417 | 200,605 | ||||||||
Net proceeds from sale of equity investment | 400,000 | 988,504 | ||||||||
Additions to property, plant and equipment | (856,716) | (2,098,535) | ||||||||
Capital contributions to partnerships | (172,917) | — | ||||||||
Net cash provided by (used in) investing activities | 8,371,784 | (909,426) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Net proceeds from sale of common stock | 128,778 | 11,777,690 | ||||||||
Issuance of common stock for cash upon exercise of stock options | 1,994 | — | ||||||||
Net proceeds from sale of Series B convertible preferred stock | — | 5,000,250 | ||||||||
Taxes paid related to net share settlements of stock-based compensation awards | (82,165) | (192,545) | ||||||||
Borrowings and repayments on lines of credit, net | 9,857,653 | 1,770,219 | ||||||||
Borrowings of long-term debt | 4,208,460 | 868,372 | ||||||||
Repayments of long-term debt | (1,743,514) | (1,392,533) | ||||||||
Debt issuance costs | (421,538) | (692,779) | ||||||||
Net cash provided by financing activities | 11,949,668 | 17,138,674 | ||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (1,017) | 672,462 | ||||||||
NET DECREASE IN CASH & CASH EQUIVALENTS | 1,342,285 | (1,471,429) | ||||||||
CASH AND CASH EQUIVALENTS, beginning of the period | 2,056,508 | 3,527,937 | ||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 3,398,793 | $ | 2,056,508 | ||||||
Company Contact: | Investor Contact: |
Mark Herrmann, Chief Executive Officer | Robert Blum |
S&W Seed Company | Lytham Partners, LLC |
Phone: (720) 593-3570 | Phone: (602) 889-9700 |
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SOURCE S&W Seed Company
