• Total Revenue: $60.4 million, down from $73.5 million last year.
• Double Team Revenue: $10.9 million, an increase of 68% from the previous year.
• Americas Sorghum Revenue: $20.4 million, up 10% compared to the previous year.
• Americas Forage Revenue: $9.9 million, above the $9 million expectation.
• Australia Domestic and International Sales: $29.1 million, down 33% from last year.
• Gross Margin: 26.2%, above the stated outlook of 24% to 26%.
• Total Operating Expenses: $30 million, below the guidance of $32.5 million.
• Adjusted EBITDA: Negative $8.5 million, an improvement from negative $9.3 million last year.
• Net Loss: Negative $30.1 million or negative $0.70 per share.
• International Forage Sales: $29.1 million, down from $43.6 million last year.
• Sorghum Gross Margin: 48% in aggregate for the Americas.

• Warning! GuruFocus has detected 7 Warning Signs with SANW.

Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Double Team revenue increased by 68% to $10.9 million, indicating strong growth in the Americas market.
• Company-wide gross margins improved to 26.2%, exceeding the stated outlook of 24% to 26%.
• Total operating expenses, excluding impairments, were reduced to $30 million, below the guidance of $32.5 million.
• Sorghum technology, including Double Team, is expected to be planted on 10% of U.S. sorghum acres in 2024, up from 6% in 2023.
• The company is recognized as a leader in sorghum technology, working with over 15 independent companies in the U.S. market.

Negative Points

• International operations faced significant challenges, with Australian subsidiary entering voluntary administration.
• Australia domestic and international sales fell to $29.1 million, down 33% from the previous year.
• The company experienced a severe and abrupt shift in the MENA markets, with over $5 million in orders canceled due to Saudi Arabia's import restrictions.
• Net loss for fiscal 2024 was $30.1 million, compared to a net income of $14.49 million in the previous year.
• The voluntary administration process in Australia has led to an event of default under S&W's debt facilities, requiring ongoing negotiations with creditors.

Q & A Highlights

Q: Could you break down the EBITDA loss embedded within the Australian operations? A: Vanessa Baughman, Chief Financial Officer, mentioned that the segment reporting needed for the reconciliation of EBITDA losses is included in the 10-K filing. However, she did not provide specific numbers during the call.

Q: What is the maximum liability associated with the Australian business once the VA process is completed? A: Vanessa Baughman explained that the maximum liability is expected to be AUD 15 million, approximately $10 million. This is part of the ongoing discussions with the National Australia Bank (NAB) and is expected to be resolved by November.

Q: How do you view the financial outlook for the Americas, given the lack of cash flows from VBO and the wheat JV? A: Vanessa Baughman stated that they expect continued growth in the Double Team platform and Prussic-free pilot. They are also in discussions with a new lender, so funding is not a concern. More specifics will be provided in mid-November.

Q: Can you provide more details on the expected growth of the Double Team sorghum trait technology? A: Mark Herrmann, Chief Executive Officer, indicated that Double Team is expected to grow to 13% to 15% share of the US sorghum acres next year, driven by positive farmer experiences and operational improvements.

Q: What are the expectations for the Prussic-free sorghum launch? A: Mark Herrmann noted that last year was a pilot, and this year is a full launch of Prussic-free sorghum. They anticipate continued growth in the market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.