Longmont, Colorado, USA
May 15, 2025
S&W Seed Company (Nasdaq: SANW), or S&W, today announced financial results for the three months ended March 31, 2025.
Financial Highlights
- Revenue for the third quarter of fiscal 2025 was $9.6 million, a 2.0% increase compared to the third quarter of fiscal 2024.
- Gross profit margin for the third quarter of fiscal 2025 was 37.7% compared to 24.6% in the third quarter of fiscal 2024.
- GAAP operating expenses were $4.3 million for the third quarter of fiscal 2025 compared to $5.5 million for the third quarter of fiscal 2024.
- Net loss from continuing operations was ($2.2) million, or ($1.04) per basic and diluted share, for the third quarter of fiscal 2025 compared to ($4.8) million, or ($2.11) per basic and diluted share, for the third quarter of fiscal 2024.
- GAAP net loss was ($2.2) million, or ($1.04) per basic and diluted share, for the third quarter of fiscal 2025 compared to ($5.5) million, or ($2.41) per basic and diluted share, for the third quarter of fiscal 2024.
- Adjusted EBITDA (see Table B) was $0.2 million for the third quarter of fiscal 2025 compared to ($2.2) million for the third quarter of fiscal 2024.
Management Discussion
"The strategic actions we have taken during the past year to reposition S&W's focus on our high-value, high-margin sorghum trait technology were clearly beginning to deliver results during the most recent third quarter (January through March 2025) culminating in year-over-year revenue growth, strong improvement in gross margins, and our first positive Adjusted EBITDA quarter in many years," commented Mark Herrmann, CEO of S&W Seed Company. "However, certain tariffs that went into effect in April 2025 have impacted our outlook for the current fourth quarter of our fiscal year largely due to a decline in customer exports to China and general market uncertainty, causing us to revise our overall fiscal 2025 expectations. China has historically been the largest export buyer of sorghum; however, recent reports indicate Chinese customers have largely pulled out of the market causing a near-term disruption. Once market equilibrium is reestablished, we believe we are poised to continue growing market share with our high value, high margin Double Team and Prussic Acid Free sorghum trait solutions which continue to receive strong endorsements from the domestic sorghum community."
"Longer-term, we are optimistic that the nutritional characteristics of sorghum, specifically that its high protein, non-GMO, and gluten-free will allow it to gain traction. As the leader in sorghum trait technology solutions, we believe this bodes well for future demand of the crop and our ability to deliver increased ROI to farmers," Herrmann concluded.
Financial Results
Total revenue for the third quarter of fiscal 2025 was $9.6 million compared to total revenue for the third quarter of fiscal 2024 of $9.4 million. The $0.2 million growth was driven by a $0.6 million increase in non-dormant alfalfa sales in Mexico, a $0.4 million increase in conventional grain sorghum sales in the U.S., and a $0.2 million increase from the initial launch of Prussic Acid Free in the U.S. These increases were partially offset by declines of $0.5 million in sorghum sales in Asia, $0.3 million in sorghum sales in Mexico, and $0.2 million in dormant alfalfa sales in the United States.
Gross profit margin for the third quarter of fiscal 2025 was 37.7% compared to gross profit margin for the third quarter of fiscal 2024 of 24.6%. The gross profit percentage increase was primarily driven by improved life cycle management, improved international margins due to shift from non-dormant alfalfa mix to sorghum, and improved margins due to a shift from conventional sorghum to higher margin Prussic Acid Free sorghum.
GAAP operating expenses for the third quarter of fiscal 2025 were $4.3 million compared to GAAP operating expenses for the third quarter of fiscal 2024 of $5.5 million. This decrease was due to a $1.0 million decrease in selling, general, and administrative expenses and a $0.2 million decrease in depreciation and amortization costs.
Adjusted operating expenses (see Table A1) were $3.5 million for the third quarter of fiscal 2025 compared to $4.7 million for the third quarter of fiscal 2024.
Net loss from continuing operations for the third quarter of fiscal 2025 was ($2.2) million, or ($1.04) per basic and diluted share, compared to ($4.8) million, or ($2.11) per basic and diluted share for the third quarter of fiscal 2024. Net loss from discontinued operations for the third quarter of fiscal 2025 was ($0.0) million, or ($0.01) per basic and diluted share, compared to ($0.7) million, or ($0.29) per basic and diluted share, for the third quarter of fiscal 2024. GAAP net loss for the third quarter of fiscal 2025 was ($2.2) million, or ($1.04) per basic and diluted share, compared to ($5.5) million, or ($2.41) per basic and diluted share, for the third quarter of fiscal 2024.
Adjusted net loss (see Table A2) for the third quarter of fiscal 2025 was ($1.2) million, or ($0.57) per basic and diluted share, excluding the loss from discontinued operations, interest expense - amortization of debt discount, non-recurring transaction costs, dividends accrued for participating securities and accretion, and equity in loss of equity method investee (Vision Bioenergy), net of tax. Adjusted net loss (see Table A2) for the first quarter of fiscal 2024 was ($4.1) million, or ($1.79) per basic and diluted share, excluding the loss from discontinued operations, interest expense - amortization of debt discount, non-recurring transaction costs, dividends accrued for participating securities and accretion, and equity in loss of equity method investee (Vision Bioenergy), net of tax.
Adjusted EBITDA (see Table B) for the third quarter of fiscal 2025 was $0.2 million compared to Adjusted EBITDA for the third quarter of fiscal 2024 of ($2.2) million.
Fiscal 2025 Guidance
The Company is updating its expectations for fiscal 2025 revenue to be in the range of $29.0 to $31.0 million. The change in expectations is primarily due to expected continuing disruptions within the U.S. sorghum market due to decreased exports by customers to China and general market uncertainty. In fiscal 2024, comparable revenue from continuing operations was $38.0 million, which excludes revenue generated by the Company's former Australian subsidiary.
The Company now expects Adjusted EBITDA to be in the range of ($8.5) to ($7.0) million for fiscal 2025.
Topics
Species
