Stock Buzz: S&W Seed Company (NASDAQ: SANW)

On Friday, Shares of S&W Seed Company (NASDAQ: SANW) declined -0.97% to $3.06. The stock recorded $3.06 as its minimum price and hit the max level of $3.19, during its most recent trading session. It traded total volume of 41,816 shares higher than the average volume of 41.68K shares.

S&W Seed Company (NASDAQ: SANW) recently declared financial results for the fourth quarter and fiscal year ended June 30, 2018.

Annual Results:

For the fiscal year ended June 30, 2018, S&W stated revenue of $64.10M, contrast to revenue of $75.40M in fiscal 2017. The decrease was mostly attributable to reduced shipments to Saudi Arabia as a result of water use regulations in the country. For fiscal 2018, revenue from Saudi Arabian destinations was $1.50M contrast to $12.10M in fiscal 2017, and $26.00M in fiscal 2016. Revenue in the United States, S&W’s leading market, was $41.70M in fiscal 2018 contrast to $41.50M in fiscal 2017. Gross margins during fiscal 2018 improved 160 basis points to 23.0% contrast to gross margins of 21.4% in fiscal 2017. This improvement in gross margins was mainly because of product sales mix during the year where the Company had a higher concentration of sales, as a percentage of total revenue, to Pioneer; coupled with reductions of production costs of proprietary seed.

Total operating expenses in fiscal 2018 were $17.70M contrast to $18.50M in fiscal 2017.  Adjusted operating expenses (see Table A-2) during fiscal 2018 were $17.70M, contrast to $17.30M in fiscal 2017. On an adjusted basis, SG&A reduced by $520.0K, while R&D increased by $856.0K over the prior year. S&W continues to focus on operating efficiencies while maintaining an investment in developing next generation products that are intended to drive growth in revenues and gross profit margins. Included in fiscal 2018 operating expenses was a charge of $66.0K related to transactions expenses, whereas included in fiscal 2017 operating expenses was a charge of $837.0K related to employee separation costs, a $319.0K impairment charge related to the carrying value of certain stand establishment assets and a $60.0K reserve for uncollectable sub-lease income.

GAAP net loss for fiscal 2018 was $(4.70)M, or $(0.21) per basic and diluted share, contrast to GAAP net loss of $(11.80)M, or $(0.67) per basic and diluted share, in fiscal 2017. In fiscal 2017, the Company recorded a valuation allowance of $9.60M against its deferred tax assets which resulted in GAAP income tax expense of $8.20M for the fourth quarter of fiscal 2017.

Adjusted non-GAAP net loss for fiscal 2018, excluding various items (transaction costs, change in derivative warrant liabilities, and interest expense – amortization of debt discount), was $(4.90)M, or $(0.22) per basic and diluted share. Adjusted non-GAAP net loss (see Table A-2) for fiscal 2017, excluding various items (separation charges, reserve for uncollectable sub-lease income, impairment charges, change in derivative warrant liabilities, change in contingent consideration obligation, loss on equity method investments, anticipated loss on sub-lease land, interest expense – amortization of debt discount, and valuation allowance for deferred tax assets), was $(1.80)M, or $(0.10) per basic and diluted share.

SANW has the market capitalization of $79.38M and its EPS growth ratio for the past five years was 25.70%. The return on assets ratio of the Company was -3.10% while its return on investment ratio stands at 0.10%. Price to sales ratio was 1.24 while 73.20% of the stock was owned by institutional investors.

Marion Frost

Marion Frost

I am Marion Frost and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

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