S&W Seed Company Q2 FY2025 earnings call

• Repositioned focus on high-value crop opportunities like sorghum and Camelina through leading crop innovation.
• Successfully completed the VA process in Australia in late November 2024, including settlement agreement and release from obligations.
• Secured a new $25 million working capital facility with Mountain Ridge in late December 2024, with MFP providing a $13 million letter of credit as collateral.
• Aligned cost structure, improving gross margins, reducing breakeven rate, and lower working capital through inventory management.
• Double Team sorghum has 10-12% market share in US grain sorghum acres, with plans for new product launches over the next decade including DT2, prussic acid free, broad spectrum herbicide tolerant, and insect tolerant sorghum.
• Joint venture with Shell for Camelina remains on track, with VBO introducing Camelina seed with resistance to glucoma.
• Board exploring strategic alternatives to enhance shareholder value.

For the second quarter of fiscal 2025, revenue was $5.1 million compared to $8.3 million in Q2 of the prior year. Ex-US international revenue from the prior year's Q2 ($1.1 million) was not repeated this quarter. America's sorghum revenue including Double Team and conventional sorghum was $3.1 million, America's forage revenue was $1.7 million, and there was a small amount related to the VBO partnership. Global sorghum revenue for fiscal 2025 is expected to be $24 million to $27.5 million, with DT (Double Team) between $12 million and $14.5 million, pilot for prussic acid free contributing $200,000, international forage sales ~$3.2 million, America's Forage between $7 million and $8 million, and other sales ~$300,000. Gross profit margin for Q2 2025 was 37.1% compared to 42.8% in Q2 of the prior year, due to lower DT revenue in the current quarter.

• Fiscal 2025 total revenue for ongoing business is expected to be between $34.5 million and $38 million.
• Positive adjusted EBITDA of $1 million to $3 million is expected in the second half of fiscal 2025.
• Adjusted EBITDA for fiscal 2025 is expected between negative $5 million and negative $3 million.
• Global sorghum revenue for fiscal 2025 is projected to be $24 million to $27.5 million, with DT between $12 million and $14.5 million.

• Macro factors like potential tariffs and rise in alternative crop prices impacting farmers' decisions.
• Uncertainty in farmer cropping plans due to commodity price volatility.
• Impact of Australian VA process on inventory and sales timing.

Q: Concerns about inventory level and commercial ramp for DT sorghum A: Addressed uncertainties around timing of inventory intake and farmer decision-making, mentioned model transition to align royalty payments Q: Impact of alternative commodity prices on sorghum acreage A: Acreage trend for sorghum has been volatile, but guidance doesn't rely on significant acreage growth Q: Visibility on working capital reduction and credit facility A: Anticipated lower debt position by end of fiscal 2025, supported by Mountain Ridge facility and reduced inventory Q: Constraints on S&W's scale and synergy with larger operations A: Strategic review may identify opportunities for resource assessment and value escalation Q: Impact of tariffs and administration changes on estimates A: Tariffs and administration changes are speculative and not built into current financial estimates