Mr. Wong concluded, "The strategic steps implemented to transform S&W to a more diversified multi-crop, middle-market agricultural company, is expected to drive core revenue growth in fiscal 2020. We remain focused on leveraging our revised sales structure, developing value-added trait technologies, pursuing accretive acquisitions and continuing integration of our profit improvement plans with a goal to drive value for shareholders in the years to come."
(Note to readers: As S&W adopted the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASC 606) as of July 1, 2018, using the modified retrospective method, there is a lack of comparability of current financial results to prior fiscal periods.)
For the fiscal year ended June 30, 2019, S&W reported revenue of $109.7 million, compared to revenue of $64.1 million in fiscal 2018. The increase in revenue is primarily related to $34.2 million in licensing revenue from Pioneer and a $12.4 million revenue contribution from sales of sorghum acquired in the October 2018 Chromatin transaction.
As announced in May 2019, S&W entered into a termination agreement and an alfalfa license agreement with Pioneer Hi-Bred International, a subsidiary of Corteva Agriscience, to replace its prior alfalfa distribution agreement with Pioneer. Under the new agreement, Pioneer paid $45 million to S&W in May 2019, and S&W expects to receive an aggregate of $25 million in quarterly payments from Pioneer between September 2019 and February 2021. Approximately $34.2 million of the foregoing amounts were included as licensing revenue for fiscal 2019 and approximately $34 million will be recognized as revenue through February 2021 as alfalfa seed is delivered to Pioneer.
Core Revenue (excluding revenue attributable to Pioneer) for fiscal 2019 was $37.9 million, compared to Core Revenue for fiscal 2018 of $24.6 million, representing an increase of 54%. Due to the revised agreement with Pioneer in May 2019, S&W provides Core Revenue as a metric to track performance of the business on a go forward basis.
Gross margins during fiscal 2019 were 37.1% compared to gross margins of 23.0% in fiscal 2018.
In fiscal 2019, adjusted operating expenses, excluding transaction costs, restructuring and other related expenses (see Table A1) were $26.4 million, compared to $17.7 million in fiscal 2018. The increase in adjusted operating expenses for fiscal 2019 can be attributed to approximately $4.8 million of additional expenses from the newly acquired sorghum operations of Chromatin, $2.9 million of additional investments in S&W's sales and marketing and product development functions, and $1.2 million of bad debt expense associated with a reserve for Sudan receivables.
GAAP net loss for fiscal 2019 was $(9.3) million, or $(0.31) per basic and diluted share, compared to GAAP net loss of $(4.7) million, or $(0.21) per basic and diluted share, in fiscal 2018.
Adjusted non-GAAP net income (see Table A1) for fiscal 2019 was $11.7 million, or $0.39 per basic and diluted share, which excluded various items including transaction costs, restructuring charges, goodwill and intangible asset impairment charges, change in estimated value of assets held for sale, changes in anticipated loss on sub-lease land and interest expense – amortization of debt discount. Adjusted non-GAAP net loss (see Table A1) for fiscal 2018, excluding various items (transaction costs, change in derivative warrant liabilities, and interest expense – amortization of debt discount), was $(4.9) million, or $(0.22) per basic and diluted share.
Adjusted EBITDA (see Table B) for fiscal 2019 was $19.2 million, compared to adjusted EBITDA of $1.3 million in fiscal 2018.
S&W expects Core Revenue (excluding revenue attributable to Pioneer) for fiscal 2020 to be within a range of $41 to $44 million, representing an expected increase of 9% to 16% compared to fiscal 2019 Core Revenue of $37.9 million.
Including contributions from Pioneer, S&W expects total revenue for fiscal 2020 to be within a range of $64 to $67 million.