1st QTR 2017: S&W Seed's sales even with last year, reports a loss

Date:11-15-2016

S&W Seed Company today announced financial results for the first quarter of fiscal year 2017 ended September 30, 2016.

Mark Grewal, president and chief executive officer of S&W Seed Company, commented, "The first quarter of our fiscal year is seasonally our lowest sales volume quarter of the year, but our busiest production period as we work with our contracted grower base to finalize the North American harvests which will set the stage for the remainder of the fiscal year. Our production team did an outstanding job securing a 15% increase in acreage dedicated to seed production.

"With nearly 90% of the North American harvest complete, we are expecting a global increase of contracted seed production for calendar year 2016 of more than 20%. This improvement in contracted seed inventory will help us to drive organic revenue growth in fiscal 2017, replenish our depleted inventory levels, and minimize the need to purchase higher cost inventory from the spot market to meet the needs of our customers."

Matthew Szot, chief financial officer of S&W Seed Company, commented, "Revenues for the first quarter came in consistent with our expectations. Gross margins were lower during the first quarter due to the product mix sold which consisted of a higher concentration of lower-margin non-proprietary seed. With improved contracted seed acreage, decreases in our seed production costs, and expectations for relatively stable market pricing, we continue to believe fiscal 2017 will show improvements in organic revenues and gross margins.

"Additionally, we remain committed to strengthening our balance sheet and retiring the remaining balance of our convertible debt, with only $2.1 million remaining outstanding today. We have retired nearly $25 million of convertible debt over the last 23 months demonstrating our ability to execute on our strategic initiatives and continue to drive value for our shareholders."

Mr. Grewal concluded, "As diets in developing countries continue to evolve to include higher protein levels, we expect that the demand for alfalfa will continue to expand. S&W maintains a leadership position in this global crop with advanced product offerings, a large and diversified production base, worldwide distribution into more than 30 countries, and R&D collaborations that are looking to bring next generation traits to the marketplace.

"While we look to take advantage of this leadership position in alfalfa for years to come, we are also focused on leveraging the infrastructure we have built to expand into complimentary product offerings, including our recent entry into the hybrid sorghum and sunflower seed markets. With a tremendous team in place to drive growth, efficiencies and innovation, I look forward to a strong fiscal 2017."

 To view the complete report, click here.