S&W Seed revenues sharply up 1,586% in Q4 FY 2013

Date:09-26-2013

For the fourth fiscal quarter ended June 30, 2013, S&W reported revenues of $12.7 million versus $0.8 million in the comparable period of the prior year, an increase of 1,586%. Revenues for the quarter were driven by contributions from the company's Seed Genetics International ("SGI") operations, based in Australia, which commenced shipments from its Spring 2013 harvest in April 2013, contributing $10.4 million. Revenues derived from the company's Imperial Valley Seeds ("IVS") operations and its core proprietary S&W alfalfa seed operations were $1.9 million and $0.4 million, respectively, for the quarter as the company had limited available inventory and focused its sales efforts on limited strategic sales in anticipation of the late summer 2013 harvest and planting season. 

Adjusted gross margins were 20.4% during the fourth quarter compared to 13.5% in the first nine months of fiscal year 2013 reflecting improved gross margin contribution from the company's SGI and IVS operations during the fourth quarter. Gross margins in the fourth quarter of fiscal year 2012 were (22.4%) which were impacted by a loss on the company's non-core and non-recurring discontinued wheat and triticale crops. 

Adjusted EBITDA for the fourth quarter of fiscal 2013 was $682,000 compared with a loss of $(812,000) in the fourth quarter of fiscal 2012. 

Revenues for the fiscal year ended June 30, 2013 were $37.3 million, compared to $14.1 million in the previous fiscal year. Gross margins (excluding stevia-related operations) were 15.9%, compared with 27.6% in the previous fiscal year due primarily to the lower margin profile of the acquired IVS operations, as well as increases in seed production costs in the Fall of 2012 from S&W's organic (existing) operations.

Adjusted EBITDA  for fiscal 2013 was $1.2 million, compared with $1.1 million in the prior year.

Outlook

The company maintains alfalfa seed production and sourcing estimates of 18 to 19 million pounds for the calendar 2013 harvest cycles which is significantly up from S&W's prior year production of 2.8 million pounds. Production of the company's Australian operations continued to come in stronger than expected offsetting lower production contribution from S&W's varieties.  The company currently expects that it will continue to see gross margin improvement compared to the previous year across all selling regions of its business.