S&W Seed Co, an agricultural company specializing in crop production, disclosed its financial outlook and product timelines in a recent SEC filing. The company, based in Longmont, Colorado, provided guidance on its sorghum sales and gross margin projections, along with anticipated commercial launch dates for its various sorghum products.
According to the filing, S&W Seed Co expects its fiscal 2025 sorghum sales to range between $24.0 million and $27.5 million, with traited sorghum sales contributing $12.0 to $14.5 million and conventional sorghum sales accounting for $12.0 to $13.0 million. Looking further ahead, the company forecasts a significant increase in sorghum sales by fiscal 2033, estimating a range of $80.0 to $90.0 million, with traited sorghum sales making up the majority.
The company also predicts a compounded annual growth rate (CAGR) for sorghum sales of 17 to 22 percent from fiscal 2022 through fiscal 2025, and a CAGR of 16 to 18 percent from fiscal 2025 through fiscal 2033. For fiscal 2025, S&W Seed Co anticipates adjusted gross margins for all sorghum sales to be between 47 to 50 percent, and an even higher range of 71 to 75 percent for fiscal 2033, reflecting a positive trajectory for profitability.
In terms of product development, the company plans to commercially launch its second-generation Double Team (DT2™) forage sorghum in fiscal year 2027 in the United States. This will be followed by the launch of DT2 plus Prussic Acid Free (PF™) grain sorghum in fiscal year 2028 in the U.S., with launches in certain other countries expected between fiscal years 2029 to 2030. Broad Spectrum HT sorghum and Insect Tolerant sorghum are slated for commercial release in fiscal year 2031 in the U.S., with international launches anticipated in fiscal year 2033.
S&W Seed Co also estimates that its U.S. grain sorghum market share will range from 10 to 12 percent in fiscal 2025, with expectations to capture 25 to 30 percent by fiscal 2033.
The company uses non-GAAP financial measures, such as adjusted gross margins, to facilitate analysis and believes they are useful to investors as a supplement to GAAP measures. However, it acknowledges that these measures are not intended to replace GAAP reporting and may differ from non-GAAP measures used by other companies.
In other recent news, S&W Seed Company (NASDAQ:SANW) is exploring strategic alternatives to enhance shareholder value, which may include a potential sale, merger, or continuation of its current business strategy. Rabobank Securities Inc. and Cooley LLP are advising the Board on this matter.
In financial developments, S&W has secured a $25 million revolving credit agreement with Mountain Ridge, backed by a $13 million letter of credit from MFP Partners L.P., S&W's principal shareholder. In its Q4 earnings call, the company reported a 68% increase in revenue from its Double Team sorghum technology in the Americas, but a decrease in total revenue for the fiscal year and a GAAP net loss of $30.1 million.
On the corporate front, S&W elected four directors at its Annual Meeting of Stockholders and approved executive compensation and amendments to the equity incentive plan. The company has also regained compliance with Nasdaq listing requirements.
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