SANW - Earnings call transcript Q1 2018

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Operator

Good afternoon everyone and welcome to the S&W Seed Company reports first quarter fiscal year 2018 financial results conference call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. today's being that note also event recorded. is Please like the conference this time, over turn would I At call to to Mr. Lytham Robert with Partners. Blum Sire, please sir. go ahead,

Robert Blum

us XX, financial Jamie to quarter Company of you and XXXX you us first for Thank ended on year September thank for the discuss With for results joining the fiscal S&W XXXX. Seed all today prepared Matthew the the President the a and Officer today's and Wong, conclusion open today At Chief Officer. Mark Szot, we are company Financial call call question-and-answer representing Chief will session. remarks, of Executive for the

begin provisions amended submit made Act Company the forward-looking the XXA the forward-looking meaning following Exchange Act management Securities of the and prepared of conference XXXX. the to XXXX we Before XXXX pursuant by statements of Litigation the the statements Securities of such Section within team with of this remarks, amended contain during for the Harbor Private the as may Securities Section made Statements of of we of Reform course are record Seed Act S&W of statement. XXE and as Safe call

Seed of ended forward-looking the various company's the June projected identified XX-K year XXXX result plan forward-looking projected the should, for future differ factors by a XX, could in actual materially risks results may those such or projected. as statements the in from future and Forward-looking in fiscal other statements are planned, preceded turn the that call or S&W are made may, including filings cautioned company results from Executive subject of and Mark? me to With that Commission. other plans, the risks circumstances, words events cause those are differ Listeners to that Officer uncertainties that expected, or or over Mark said, future, the for multitude let such and a to risk materially Company. Chief strategies statements, expectations, generally Securities will and anticipates, Wong, draft, the as or with and Exchange results statements describe by eventually

Mark Wong

Robert to you the good afternoon call of all and on you Thank today.

inaugural existing is incremental This mentioned remains As middle This occur we of well each seed our a evolving companies our my us world to that for strong CEO. one to a the I overnight. will leverage premiums reason today. drive not unique of value. opportunity enable very dollar I value to as creation focus we became shareholder weeks more am expand by in I to significantly evolution at crop during will include But the as it have market ago, asset I organization. confident believe the sales call agricultural conference sell of centric trait the day, S&W believe of end portfolio of I the customer base tremendous a eight the

Looking a year we weakness in reduced significant quarter but XX.X% gross were given the at improved XXXX, a gross of by first Saudi by profit we offset the that water continuation fiscal recent as Overall, production quarter, costs, saw our caused regulations. highlighted change the Arabia margins in improvement were margins just compared revenues XX.X%, ago, mix. XXX in to point especially The the our $XX.X year. million gross to million, product importantly compared basis in is $XX.X margins last trend

more Matt know expect shifts an of our even to pronounced we mix I trend. will this As talk about more in his year product become the margin move remainder to toward and details we higher this the shortly. varieties,

Plant and a an herbicide There that productivity being value insect high Calyxt. receive with to I interest, may breeding Biotechnology is USDA. this commercialize Company last am while of seed on technology candidates the this varieties a its be sunflower resistance to the call, demand edge traits in bring first there and think (APHIS), costs product process significant with in agency of and of or the drive a on during The crops Trait evaluating alfalfa article certain focused for meet decreasing S&W to that leading the the by our collaboration to is as we product are programs driver marketed build the Health first two pipeline for first distinction a leading be from with of well collaboration can digestibility, platform higher Inspection as with opportunity classes new that the technologies S&W to global and us just quality acquire. alfalfa Calyxt products. to non-regulated resistance. last alfalfa edge conference improved for going has of alfalfa enter providing forward of we as development are including large integrated between USDA. and the month. we Services seed Regulatory for is a under genes Seed seed with highlighted Calyxt announced is to of future degree Calyxt The marketplace. that a alfalfa quality can the input an sorghum and excited Animal we been improved I Service growing non-regulated the As ever S&W resistance, biotech key products the proud alfalfa this look enhanced announcement made jointly alfalfa, our will Along are in disease significant S&W regulated" designated these lines, product "I

Stalker. making to development In Calyxt, biotech are genetics in renowned addition with our work our developer, we by led trait technology with advancement trait David

select alfalfa seed working are biotechnology traits. We novel varieties containing develop to

with products. As coming create leverage patent proprietary patent scientific are and working genetics them S&W, knowledge utilizing to a landscape years, in S&W. of other to this generic Based preparation in coupled with off generic and another of traits and there. transgenic significant opportunity have that current we Calyxt non-regulated on the traits Currently, genetics. we pound varieties is off-patent help approach, to development development that expertise technologies believe we these generic would program. on traits constructs technologies be trait higher of looking our within seed of can to transferring the to us is goal to agreements of are with an the are unique get the we come can unique attain there of types genetics status we value specific Again, This unique to number ongoing sold per and achieve develop

have The our expanded programs. sunflower Stevia our some are increases will programs seed Idaho. R&D of facility sorghum Nampa, as of you and in we alfalfa As for recently as house facility primarily development parent well aware, our and

made with a products large R&D in collaborations the unnamed being company. in our On the consumer Stevia front, we are confident progress

customer. Our is U.S. be enhanced flavor harvestable production mechanically profiles develop to goal a Stevia would to for this that specific plant with

is with expanded Our creating initial them. this customer and three-year conclude scheduled in in coming development with months an the we agreement are agreement to process of the currently

sunflower call, allocated during As that believe adoption a mentioned growth opportunity drive to programs, and success overseeing will last these also our From the the initiatives made. In been I harvested. of good standpoint, and sunflower in I R&D I resources is ensure S&W. for be the has products are an Stevia commercialization personally being years in very Hungary In nursery the the come. the the season XXXX. for harvest. trails nursery sorghum is sunflowers EU progress Eastern to Australia, Excellent been shipped large good been entry in trials emergence. for registration produced EU being in nearing the into grain sorghum progress Ukrainian In planted markets. seed made to development Chile, has and of been evaluation has sorghum activity. Russian, in with contra Chile has spring is seed Meanwhile, U.S., for are The hybrid and

On seed higher for the sunflower production and in for seed side, with was produced metric sorghum Australia S&W recently a forage in production Australia and Northern Southern finalized markets and of production of hybrid was parent the S&W in XXX genetics we appointed tons sorghum hybrid production results. excellent manager Hemisphere. parent and seed

side grass marketing sorghum tons sales dealers direct for hybrid for made front of sorghum SV and and Australia to the has In is Genetics Ukrainian SV in Argentina South shipped has have of with being seed sunflower production Sudan the distributors. that South being sorghum sunflower, licensed model metric Africa, and and XXX licensees. in additional sales Genetics to like commenced sorghum for sold market most Pakistani to been markets. has Libyan And Argentina, On of Africa been and parent been by client and harvested to and two to hybrids

years While to to a come. believe for sorghum the are I revenue significant small and sunflower portion our base, of there the is in moment a be current opportunity this

private uncertain, non-GMO recently we an signed While with acquisition. we company U.S. dormant the the in a seed of acquired national for that remain label We from large Saudi alfalfa Pioneer DuPont in certain are optimism room markets agreement our germplasms to seeing

Pioneer customers acquired that been from which in line varieties progress regional to in to also additional that U.S. our on and the U.S. making on This seed a of selling the front. we acquisition of point working ability varieties. we this We are of the key are also has would dormant these expand here companies high-end we footprint addition seed good sell in

the registration taking for we We in dormant to time. also XXXX. year three our semi-dormant is weaknesses helping varieties in two XXXX Europe stages sale This of of some progress process for are quite see semi-dormant final products varieties channels in varieties the we in in certain offset the Saudi. for Europe. and are ready getting in expand But alfalfa is finally This in final the dormant and

the the Before strategy a going me Matt recap over forward. of discussion final for to review our let I turn results,

is to drive background Based additional technology an generated and to sorghum seed coming crops alfalfa, can Stevia. where the per biotechnology going ignore build no S&W First, years. and believe technology value integrated current forward pound longer where improvement including on I of We is side will from into and more of history, our generated. itself. within industry sunflower be in lies the our platform than all seed can focus value seed be I the and trait my This from intend

customer to become sunflower developing alfalfa, with our we of Second, Stevia key are based customers. variety conjunction and distributors to communicate a our sorghum, organization to the and attributes in centric more our strategies highlight

sorghum business Third, become forward. going sunflower our components and of larger increasingly

ensure allocated of the our sector to me growth will traits years crops a will us review to and opportunity turn look of We commercialization become allow Stevia through quarterly the results. developing Matt adoption that and are said, that growth, let this be is to With I possibly for lastly, I of the resources share come. in players organic will personally market Szot to believe S&W drive to please? And while this a acquisition and going success Matt, forward. significant initiatives establish for business overseeing and over these

Matthew Szot

Mark and on you you everyone thank Thank to today. call the

increase of quarter saw first domestic was For sales revenue the revenue by that to to decrease to driver million Arabia shipments an for the $XX.X harvest $XXX,XXX in in a had that DuPont $XX.X an $XXX,XXX uptick earlier quarter. $X.X million the shipment. the prior in This quarter, Pioneer increase year. Saudi to to offset Argentina. compared the We for We was an and first sales in primarily main in seed available partially million the in increase domestic and sales was a related can from

our improvement to in discussed the first in For XXXX, was gross XX.X%, in by nearly initiatives points, XX.X% of quarter reiterating This perspective, previously quarter revenue, margins. our are increased year. From $X.X million our compared margins gross our consistent an in a of approximately million revenue. previously communicated $XX the fiscal in million expectations improvements margins decline improvement prior of to dollar basis profit guidance drive with despite the the to $XXX,XXX. of first Gross $XX XXX gross we were and

for flat to $X while of the the were quarter quarter quarter the nearly personnel look the dormant and increase million remainder with improve costs increase up R&D $XXX,XXX continue essentially to operating to of expect were million, expenses compared the margin we Total in year. our of first was sales year. of expenses related SG&A first first prior XX, an prior due gross in varieties. higher compared $X.X we As as to concentrations fiscal we to margin the sales

amortization EBITDA. loss quarter EBITDA investments just in helped XXXX both a our and the $X.X of from the number adjusted quarter programs. the loss, decline fiscal We this depreciation additional Our prior Adjusted ticked bit profit revenue range and first adjusted expects slight gross million. improvement higher year. EBITDA the slight due was first Again, improvement U.S. $XXX,XXX the to up a in and drive $X.X to to offset the SV in for million between for and currently capital R&D a $XXX,XXX Genetics

a filed offering response and amended a the the X. from on provide October comments, registration rights comments related to to want received we on SEC. quick update statement statement offering. We I on SEC's Now rights limited X announced we an our to previously the registration November filed In

We at are expecting of to whether determine the XX which the they have will and we confirm any offering. point to further commencement rights November SEC by dates expiration able be comment,

Our week a holiday. to rights as stop the: will goal million back which is offering And up is the close this before reminder, Christmas the us. rights in proceeds for during a generate $XX.X offering,

promissory balance XX-year Now perspective, new and to due we facility capital quarter, production working XXXX. on loan a of North in two-year think significant and the in the working from last note is accounts consistent facility support From harvest. a American perspective, million closed and that providing increased the corresponding we to it's our inventory as timing KeyBanc. recent us we our Pioneer a with also inventory are securing a refinance saw This in increase a increase capital banking payable our important we end discussed working term $XX our reflects grower on to expectations recently new to June. I out The sheet is of with December payable since and point

we in $X to As revenue available for approximately be lot guidance, recap based To for $XX inventory EBITDA to expects to a to the know spike completion million XXXX be we quarter, And period. of million. $XX second levels currently fiscal approximately our past, between information our to on company the at I million the $XX of million million. expect and management, revenue through went $X.X data harvest and adjusted here. range the

any So if please feel free questions to have you ask.

turn I Mark. to Now will call the back over

Mark Wong

the give I of Thank industry. of and represents like what up would you highlights just what call market wrap a agricultural I in to this view today you are Matt. middle S&W the think unique

largest the First, we one are companies. of alfalfa seed

nearly XX% animal market. alfalfa have for worldwide demand share seed of address the We global We proteins.

through of have leading products We Pioneer the we to us our have before. gives not that also access acquisition distribution did which

We collaborations of for have the generation products. technology multiple next

and are other also into expanding crops We technologies.

rolled pipeline new out. of and strong a have We being sorghum sunflower products

We have Stevia being varieties patented commercialized.

We strong like have a Proprietary these sorghum, sunflower industry varieties and these Stevia. additional crops leading germplasm of crops. of in base alfalfa and

of us years breeding crops. germplasm long unique up have to of We programs XX to give each for these

production strong in products distribution than the base. more and countries our have around We sell XX We world.

grow the areas and We able the have world production in of our both sunflower to areas Northern and Southern are products these hemispheres sorghum expansion. support and our in we to

also We are really markets. big some addressing

believe at billion. the a I Sunflower market sorghum equal in have million is about said market in think we million we $XXX think year that the to $XXX alfalfa is sales. about We $X about almost before, is sales.

market the $XXX the alfalfa the dollars. sweetener is So billions it's is about while as than currently the Stevia market twice about big as as the twice of market. million big, more And in

helping above currently recently as bought take announced. above great we a personally market. that Bayer's a buy is Seed value at of to has to the BASF. at for we has in by very sweetener price. trade premium, in more seed as opportunity assets book my which, view, to a some the little traditionally reasonable at I And some think I in value. at just its are as sale company revenue. are And industry recently company shares the people transactions trading been of And have lastly, industry been shares seed product bit large evidenced discount real so is a Large a valued companies of We Stevia, are And category, evaluations. to increasing multiple a a

support. a and now through most in couple we in And think create we addition Operator? and described I shareholders. for initiatives on value maybe In questions. your continued ultimately, will we open execute that the to you for your importantly, lastly will initiatives We these have up great the the have calls. And our team to for you, of place last we like call thank

Operator

Instructions]. [Operator

Please from comes today Riley Sherbetchyan your from Our Sarkis ahead first with B. question question. FBR. go

Sarkis Sherbetchyan

for Good afternoon and my here. Hi. question thanks taking

Mark Wong

Sarkis. Good hear you. from to Hi

Sarkis Sherbetchyan

guys right. fact press production more the and So and I release. outlined marketing efficient to you that the sales have become you in a successful see platform, want that organization,

some trajectory? this this grow given to statement So higher of about looking fact and cost your revenue you operating that if you just you business reconcile words, not, you In are going materially annual we revenue the are do the what how And potentially have from at thinking revenues to degree rationalization? that existing compared base this maintain confidence guidance, of trajectory? expense that other do

Matthew Szot

we Yes. this spend comfortable Sarkis, stage, I is. operating expense feel think at where our

to growing our development overall, year-over-year of, We are gross most a we our in research revenues increase expenses. think and margins $XXX,XXX expanding operating see going line a item. are bit But we and probably on focused and

are course, there significant looking be don't XX really our see changing to the next but and nor expense reduce item. Of the we in to is efficiencies we opportunities dramatically over drive costs, operating ways for always months that line plan

Sarkis Sherbetchyan

this Understood. we the annual the the year about you us or guidance, the maybe cycle? maintenance If of can in just think remind stage the confidence at of

Matthew Szot

QX. course Well, revenue largest in is of one for our certainly

million So communications from have projections from by reasonable a we for million. is range book we with at this revenue our to time, our order and $XX of don't million customers, $XX this based for to on our being sales $XX our believe complete million rollup the detailed that $XX expectations our But substantiate full guys to said, year.

at expect year-over-year the And EBITDA margin of Saudi million to we we be translating be also in $X improvements be end that $X.X high will will around be to soften, market range. that that starts the should or we Saudi will improve, an if if driving, to probably million. lower part and driving be of we the range. into continues be to remains And market of We driving, will stable gross the

Sarkis Sherbetchyan

in Got mid-term around margin have. programs those it. you the maybe appreciate gross progress programs? commentary helpful. the what long-term sunflower, are for targets and Can and those near-term, I and revenue That's sorghum outline you your

Mark Wong

Mark. to through why of breeding with up breeding have and take companies its a like or new to development we an seed species is enter existing starts that's this of a Sarkis, off Well, program company. markets first new done can acquisition that years program as this most eight varieties an generate the

said think we last two in I process these to that, kind a the form breeder developing. are up in we call three sorghum and the that of or all hybrids in after seed are that it's sunflower of year ramp

We currently. any are OPs not doing

have you So hybrids, for line A, lines a B and restores. system three

seed so those all And we sell that all in those our then to the them produce increasing are the and will developing and we putting farmer customers. to field lines

and from number that and crop production question. But before. at good have for But we based $XX get a always and still number period. is. job year mentioned up historical $X going is experience that like we year our that a still expect Hope in five to number we growth we we on be $X.X assets $XX looking sure a that million to million of number in So your new sort think can our answers a this that good chance we have companies we bumpy. $X think million five my get It million around little million, these, years distribution hit can $X.X million, within rate we the How germplasm I do some from do. ramp in we am sales will which

Sarkis Sherbetchyan

specific cetera. I you a that the a how maybe this back One more Can sense communicating you going helpful. know been forward plans and I us et about as maybe go and/or hop with key have at of give organization are with you flavor distributors, queue. will have customer stage of key piece working in talked discussions centric your the creating That's customers? some a or strategy those

Mark Wong

Sure.

concentrated have the So right. many the companies, we, handoff, on like

our company sells is kind business, a some product So or the the who or like to distributor in dairy a that that our along next farmer someone or usually the which concentration. a gets farmer is then of obviously alfalfa directly dealer line a

the either producers grow alfalfa in and or We who are to selling the produce market. feed beef world selling around cows and also farmers to is who alfalfa feed are cattle. But then general who big alfalfa the to there dairy to it their trading a their

not East So pretty water is farmers alfalfa lot Eastern that, good West sell the hay to are demand we right from of Coast are a and countries different Arabia. in an as example, put that's some who alfalfa and prices and shipments what's now to and hay the Middle grow think, seeing, in that to that on of Saudi to happening Saudi of improved Coast we markets both translating forage we

trying our asked to looking are traits will into you focus since and putting we So one. are on, evaluating give these especially that you example, new an with just for products. in we I

the to us And that why then to distributor what understands farmers the dairy they products what's more through effort. something important our he maybe gets that's proves products relationship absolutely I competitors' to important is I distributor and there. aspect and farmer by buying us. focused alfalfa. He our mean bottom So to milk right? that a to of line dairy is the a farmer, really superior customer mean the benefit technical are the and our dairy that's from So

we alfalfa looks plant, more got to of to farmer or that farmer animals she how a also the to alfalfa is to seed understand pit We to do his get have processes kind feed that one have but both needs work what of metric more a teach to that he user, translates to bale value. she produce the gets value needs of like, her forage to and what is harvest in more the or is then bale that the right. to milk. or got or He final more one silage And with that a the

are use How every our better translates does pound of that how So grows farm, hay does our get that a his at more level. more alfalfa S&W But making wants or animal The to that trying get of to then develop, that he whole genetics chain of seeds he he beef to products. putting to more information got and be and get what it's value how then farmer have and for Hope the ourselves that question. to dairy also we feeds and and the for more of know, know informed value silage cows? process answers or dairy process plants for into in use our are customers. at both the the our buys, cows it's customers That's teaching They a milk to milk? seeds. how your he and sure to that

Sarkis Sherbetchyan

the I back queue. you. Thank great. That's will in hop

Operator

Our Sweeney ROTH. comes Please Gerry next with from question from go your ahead question.

Gerry Sweeney

Good and afternoon, Matt. Mark

Mark Wong

Good afternoon.

Matthew Szot

Gerry. Hi

Gerry Sweeney

probably this for little Mark, you. a more is

you been lot went of the the things, the time. this in traits, sorghum, But have you opportunity, Calyxt obviously through alfalfa a long different in prepared sunflower. remarks, So a business

could What the to As you next looking you, of wide in you opportunities couple risk most look successful? out, of the as on is years, analysis, excited? hit this this opportunity the do of look what and market base you but like gets front out most at the what you maybe variety a think are year, as you has year a be biggest

Mark Wong

that with if probably listening thing. right. about to exact going couple it are traits, of terms, be the probably little name am me down so a a competitors our I bit wouldn't in please. I to to this bear I But general good a But break talk will categories, that call Yes. because and

set more that as consumer. price are commodity. end which other But main traits original traits in at the or traits are just his farmer make money really two some his categories, the reduce he bottom the for think down help is of I important him his But way, break improve line right. can either that cost of the for They traits into the same they yield.

if kind and things nutritious that So something and protein be that, better would milk you a more makeup valuable. of with fats had would be and of vitamins that like

reduce standpoint, kind customer look they But to trying helps of opportunities of the are really are way. those of on They yield of the like the farmer sort focus we the The and care in the as ones products that really about to the see been harder we product. this cost. are technology accepting categories, history of because is as customer a care a traits. something they in have are to we of or of and price Yes, public to see So and two a farmer very, see sort them that helps the think develop. better them, at right. the they sort a money traits But focused well industry, very we if they bit development focus more traditional those has important of and traits, that to got sort increase both that, something opaque they important think from farmer either making public have really in

my So your would be to that question. answer general

Gerry Sweeney

gross the growing then the side, been this margin? the last that we Matt, And result of the the years the S&W, seed margin right. always optimization have program couple Australia in has on All talked of about California driving

Matthew Szot

was this our Well, more historical just QX, at a costs contract I cost higher sales in than have job year that concentration and profiles. sold in that, QX higher to we driver production which quarters look DuPont firm Gerry, main a by for primarily cost pricing while and pronounced our carry of quarter as dormant of QX, being the particular, to And the lower both Those margin non-dormant also to of better merely that the the maintaining we improvement are fact was a of did varieties doing would margin improvement Pioneer. securing margin us, say, production, QX. in those of was

expansion Australian So varieties your back business and improvement we importantly, to and margin to of as our feel part be drive optimized, that being our going that's to we we I look going five that's at next opportunity to three going are to that about to original for a margins tool more are margin be in demonstrating certainly continue that think getting years. and to forward fundamental to the we question go XXXX, XXXX use confident

Gerry Sweeney

Got it.

Mark Wong

don't many incorporate program. we into optimization as year, that This to Australian seeds have

Gerry Sweeney

That's at point, one were correctly. Because remember if out I right. you sold

Mark Wong

were yields Well, back the Australian harvest, the XXXX. low in May really

Gerry Sweeney

Yes. it. Got

Mark Wong

It's go our absolutely strategy. part of forward a

Gerry Sweeney

lost some that And it's was Okay. other revenue. Sudan maybe contraction? Saudi and to to about you there opportunity at of the move obviously you Arabia, and that? you the this Got in places headwind trait just some still an before eventually as of just up and then could going Are make it. towards that talk more pursuing take that a Is case? moving pivot to the that work land Or

Mark Wong

Yes. A great question.

market press is too. all the from a Arabia Saudi So there difficult we reading are clear now. right situations political all about That's the pretty

plant with short-term terms to in Saudi keep of the to their in line that in the how kind of strategies And trying and in going they California Saudi? towards grow then going in ship philosophy grow Saudi to are dairies try the going they they of to to in cows alfalfa to gone What to that from Argentina our to to Saudi Saudi take of world through some the dairies. are alfalfa countries Arabia? are they Where had in of production trying the around have forages they meetings our with wherever to milk are are can't Where market? products. has all their land what importing terms going the they they to to Arabia? and shove, liquid in buy And with places So other neighboring some milk production closer certain comes to in we market, and kind us demand push get and which just of customers, numbers the have million import much for forage people milk XX amount will for a cow lastly, cut if

Sarkis' question. there But all to an can for those back goes work where So See we a seed trying company. are us where them. help to we See that of through as is options. opportunity

to the get than trying try solution they showed really solution before we understand a may the to and to we really have help are customer them that up. We can how better what wants

working hard. that are on we pretty So

Gerry Sweeney

The note, finalized, has term Pioneer for it. Got not about then KeyBanc final you I think been Matt, question. loan, the with that And correct? talked

Matthew Szot

to working our facility with KeyBanc. Gerry, clarify, capital Yes. is so

ag appraisals are of finalizing term process that. finalize the XX working we year once close. lender with exact the appraisals We another amount can And are our done, And loan just and we on on the are our in loan.

month. XX that here do to ideally this the Looking or in next days

Gerry Sweeney

the that that Pioneer is are going to the appraisal, you on this get know assets appraisals I And --

Matthew Szot

yes. Well,

mortgage-backed this going Pioneer clarify, a be Sorry, is and from California located the term collateralized to and that's that in loan will It bought we to facilities. Idaho in be facility. the mill our by mill R&D

Gerry Sweeney

Okay.

Matthew Szot

are And for. that's what the appraisals

Gerry Sweeney

fair this. assumption? Got it. And bit Is that there you sounds an got those it a my opportunity sort like some It assets was but is little extract with pretty a of value to cheap. time, before

Matthew Szot

I Can you address question? repeat to I make the it properly. want

Gerry Sweeney

Yes.

those you think got pretty cheap. I assets

So trying value an a value up out, is little better yes. to opportunity in the that of I take really is, at, get bring you situation, against there am and loan it borrow what maybe what the puts asset investors them show out bit to to is some

Matthew Szot

tremendous Well, job our much the off and very yes. acquired We paid assets as with as we that's we set a to those assets were of valuation of leverage possible. comparable and

Gerry Sweeney

it. Okay. Thanks. Got it. I appreciate

Operator

[Operator Instructions].

your Klieve Markets. Our comes question. with from Capital next ahead NOBLE question go from Ben Please

Ben Klieve

transaction. A Thank conventional? me do more your take see largely you Pioneer here. be few will the Or right. for you questions GMO there? transaction germplasm All the think the Pioneer about on you. targets opportunity beyond after curious Do space One,

Mark Wong

understood in not we the that in we I that we mean at sure of that Obviously, we assets am majority We deal. said the are a non-GMO in think important. Ben. question, XX traits. acquired times the I I your sales mean there is different ways. I are XX about, least should very believe

assets. valuable are those think we So

process in of deal. still negotiating are that We the

the have We the till year. end of

in imagine, other and Forage to allies being are other some can ways parties you in are the As and Pioneer Genetics ways competitors. the deal

So it's a three-way negotiation.

not and about will So it that. way negotiating. an it's no put I just that more easy

Ben Klieve

understood. I Yes.

more of timeline I process your at kind when are centric in of the other thoughts here. that a given process? here, place, approach, a be what do see relative a you know changes distribution this And questions I a multi-quarter there? look is the it to curious Okay. am question Fair would or as network multi-year there would guess that happen But enough. said your former. I One those overnight. And like customer am you you I curious, couple don't But

Mark Wong

like Well, you in know, else life. anything it's

you per on and it start quarterly a do You basis year.

value I It your to she dairy to is to what feeds. show, which versus on question. maybe alfalfa be of one right. easier depends easier are yes beef works. are show the market So to market many that's markets, of only alfalfa the And question, Good how think going

think for to a I But not us of do market-by-market value it's understand it's for our the customers. doesn't it's sure, everyone I And to our So That's analysis. products why think important easy. it.

or the we sort And approach. I that. up in traits, non-GM be in they better how can want of value our customer so so our to but price we for or and for get be out from If can that return they higher see product see do, for whether from we that are wrong. is to It don't to think that's terms seed might we shorthand a shareholders. little there that for a what GM customers in can the we hopefully believe centric our we our question make be what our added that learn them of difficult breeding

Ben Klieve

seasonal level capital? know [indiscernible], Or bit the the one and to the your of And build working me you and need for investment happy you. besides ups in comments with going one capital initial you up guess I of think here? here. more I working Thank talk last this some build current are investments are about, you a Mark, but then need that to you Okay. do

Mark Wong

you company. the the very, capital. that's a happened wife, they a my time, and happy five of our very equity anymore new you just hell taken last she to man, the if the will seemingly have long boy, months time the have your the guy dog the am been ago. that you with all you for asked job, the only changed, the happy am I put you with with know, man would a what be working happy level offering should I in commitments well, give that don't made best of mood go, and our I the you to thing thermometer, you, kick sort rights job have in good it must shareholders

fine are side. So know, I financial can on you say all doing think the I is yes, we

banks more Our we to that. investors and equity and have seem our couldn't for team confidence than in ask our

question. the for thanks So

Ben Klieve

I now. back Thank Well, and am the well in queue, you. going will things guys. that work are at glad home jump I

Mark Wong

are You Ben. welcome,

Operator

have And ladies and allotted gentlemen, time to session. like Mark at conference closing this time the question-and-answer end for today's we any Wong of to the over back reached for would I the turn remarks. call

Mark Wong

of listening the participating thank to and so our for progress. intently call Well, everyone like the I in today to would explanation just company's

Thanks communicate much. opportunity you in mid We the all to of so look we February will and have forward very again. another to to call having

Operator

attending. does for Ladies We and you gentlemen, conclude call. conference today's do thank that

You lines. disconnect may your now

S&W Seed (SANW) 9 Nov 172018 Q1 Earnings call transcript