Earnings call transcript Q2 2023

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Operator

Good day, and welcome to the S&W Seed Company’s Second Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Robert Blum from Lytham Partners. Robert, please go ahead.

Robert Blum

right. All quarter much S&W all fiscal Seed financial for so today joining year thank XXXX. results discuss XX, to Company's the and you for you us XXXX Thanks December ended second quarter With us Company Mark Officer. Betsy President Wong, and representing Chief Officer; Chief today Executive are and Horton, the on call the Financial the question-and-answer session. a the of conclusion for today's At prepared call remarks, we'll open

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

are low plans, or Forward-looking four centres plans by should, half expectations, of of of years, our will call JV going JV of future projected. the statements draft, as few describe and value expected, advancement planned, words Such future strategies anticipates, energy during outlook results fiscal shell sustainable on and eventually our foremost generally business the prospects fiscal for future, as our operations strategy. or this carbon perform to the well to include including statements of to revenue such or contribution the positioning second ability and preceded the our our for at solutions business the our the JV's the JV the a guidance may, but our June forward, the production financial and year as the XXXX on of be plan key timing our on ending focus anticipated forward-looking not XX, and for EBITDA are impact of initial adjusted limited XXXX, by expected the to JV, on or

the uncertainties cautioned forward-looking cause materially such circumstances, to results or subject and risks events, statements, that could statements from the of identified in and risks projected subsequently materially Company made differ the differ including the for are of the Listeners actual future that Company's statements in to that result filings may year are the various and XX, other from projected those a multitude results factors as the other those XXXX a with Exchange Commission. in forward-looking fiscal Securities ended June risks and by XX-K

with on supplement read as substitute standardized GAAP, U.S. to GAAP accordance be discussing S&W These has or isolation or prescribed not GAAP adjusted addition for measures non-GAAP no be be comparable are with In and considered prepared of rules conjunction S&W's by in meant generally principles. results the in accordance as should a to or in accounting accounting reported statements with will any principles EBITDA GAAP in prepared financial not financial this call. under consolidated S&W's set measure meaning comprehensive financial

and or the predicted. adjusted not cannot net S&W reconciling at fiscal for the has of to has today, website. guidance loss of reconciliations and earnings on net items of loss EBITDA out EBITDA earlier included the its uncertain are for its page loss end Relations adjusted net reasonably a description historical A XXXX S&W's which reconciled to EBITDA is be impact S&W's because posted adjusted that Investor issued released of of these line been control

and call net page. online made An significant today's Company's fiscal audio not loss. impact a actual the available amount be replay reconciliation available will will this income Relations on XXXX for efforts. without of a these webcast Investor The of conference have is items on non-GAAP recording or Accordingly, during measure also unreasonable

Mark Officer Wong, to With for Mark, call proceed. Seed that Company. S&W said, let Chief please me Executive over the turn

Mark Wong

Thank on exciting topics. us call number you. This of for of to really an you, all Robert a is good and morning

continue which were We with our meet gross will of of expenses, translated in up adjusted improvements We XXXX another to margin of margins, million operating improvement a which sales, points, savings. these had XXX profit through basis $X.X cost our all significant EBITDA. decrease a all execution Betsy, growth operational into quarter our revenue strong and goals million team numbers. in $X.X improvement and course, on our double in in go

item the is quarter that lightest of remember QX sales to is seasonally important One year. our

are through hitting So marketing shows their the for production this building on research, and operations, quarter this level sales year. of a targets low our leverage and all revenue improvement we are

This ventures we Australian and existing parties market, leveraging all would benefiting S&W's commercial We joint we Now exciting pleasant solutions forward capabilities is breeding [indiscernible]. and quarter. for and for Trigall footprint have Desprez's with joint Genetics we venture group's develop spend high crop varieties opportunity the and BIOS HBXG Florimond finalized base about time closed performing market from to the the this some the to an series forward. talking wheat collective like with wheat going to look

oil green exciting partnership our cover crop last managing fuel purpose seed and crop the jet these new announced and most week the new diesel production. for of worldwide of developing biofuels, plant is for Shell novel with genetics, acres, -- acres the joint But venture crushing increasing seed

Importantly, camelina. species us partnering evolution forefront novel to taking the production, carbon with capabilities genetics leader advanced at -- to in to and allows place world processing fuels that produce low leverage we like of from be genetics crop seed are a sustainable our energy Shell

I green now this partnership Vision the to Seeds than would significant a a value the Oil Big is name year transportation validates be about level venture the more with or have market, a friendly player for more where of a formation week's last in S&W for development announcements talked the and high Oil at fuels. certainly call that VBO. The short environmentally of we S&W new Bioenergy brings LLC, of

little detail. opportunity So into bit more in a let's dive this

our Germplasm this oils, in seed crops to moment in Vision Panter, a joint Don in worldwide Including in of of technology, developing America's the and ago, moving genetics, Nampa, key contribute will with S&W future. Seeds facilities to focused said and become S&W is have Oil will S&W its VBO. plant S&W cover expertise a novel starting new on VBO. genetics, Idaho, seed seed research venture to LLC. contribute research, and production, will the to personnel also I our from camelina Camelina, and production research Bioenergy processing As CEO agreed move processing EVP unit other

million anniversary off of the plus one $XX of mortgage year together, will With have on the the S&W this million, this million approximately venture joint $X position receives upfront to and $X remaining altogether NAPA signing we'll $XX paid amounting also million, our deal a million facility on of $X another payment. the

with as sustainable price -- as of camelina food seed for gas of planted between cover the around the scalable Cover regarded Camelina and greener viable is transportation aim crop transition be availability Now grown for a familiar, commercially a seasons low those influencing and not crop potential feed. recognized crop for the growing feedstock world. is source greenhouse the main or also fuels. with crops crops are a not oil the to is the energy to

camelina decarbonize duty in reap reducing oil hard effective sectors and in transportation environmental in the such made social income the diversifying can sustainable streams co-benefits customers effective to those and erosion. where Using management, from way as farmers' road density soil an has camelina potential provide by to key, feedstocks controls Biofuels is be heavy and and to including help sectors. energy abate marine fuels aviation, create

as is other starts by seed for breeding Napa camelina seed, the will in crops follows, model VBO molecular biology camelina as we same its plant to and off cleaning our expertise plant. and basic The seed. use improve do VBO it growing

farmers The currently are VBO sold the grain. who year is seed production. camelina of camelina We grow crop acres of in seed large to second

buy oil meal fractions. will feed. the oil sold meal with North Next crushing. and VBO of into camelina and for into The collected grain Shell separate will every byproducts by storage grain for be crush The then be contract will animal elevator grain from will camelina sent and farmers. VBO the biofuels American The facilities. to and transported a Camelina grain its partners central industry will converted in bushel be it

of terms JV XX% initially the Shell will own of ownership, S&W In VBO with XX%. owning

to Upon milestones, eligible we the in receive an achievement to additional the are XX% interest up certain of specific JV.

this In to in the VBO. a anytime equal addition, will S&W purchase X% could XX-XX signing anniversary This option eventually percentage of to agreement. membership will ownership the at partners. put a Shell have of the from be interest fifth us S&W up

an million Napa additional S&W, payoff the cash $XX that payments mortgage, operations Shell is In million also Shell VBO. contributing the the addition funding to plus in in the of of $X to is making $XX to million

utilize important is NAPA facilities a make to production that continue agreement, One process is VBO to under the point our seed. additional alfalfa to will

In fact, arrangement in our cost, overhead of believe will creating under has drag with alfalfa. the the we on associated our this seed and that since the cost been decrease cost actually we're largely underutilized processing facility a goods

will we'll that have and ongoing initial will the which VBO our is million up quarters the that positive we nominal VBO expect the start, provide carry VBO XXXX. talking So ramp though expecting but years of cash calendar now, that any to future? still of and coming of to be our $XX be about flow expenses in in be a XXXX, out VBO few period. cover big numbers but I question are The will We the this projections that, funding grain we first year expectations does the the course what not will look years. is after future The production fiscal right the quickly. in like guidance shell late during to middle are

talked This forward. a S&W now centers past high a creating just we about new at have of team value for the be opportunity or an with more to about opportunity agreement working we long a was value. time that are be couldn't exciting Shell this As creates year with so, all I over pleased incoming. on announcement going

some me centers let the Double impact the is huge teams' other in operations. sorghum value. cover a key run on of team, Now short obviously of our

as has corn, the sorghum market for other crops in have believe we soybeans to and yields team revolutionize potential enhanced such have same double the I technologies control cotton. weed As the before, way said

revenue fulfilment we the $X starts Remember, on the double February. season million During in in normally about recognize quarter, team. of

demand a on us the to ship confirm the million farmers want dollars to hands supplies. and ending quarter really early their to December it So in in order highlights for the their get product for that fact

projected hindering past season demand This of ensure one seed. sorghums. our availability the we stated of I production adequate As of the factors have Team we the in we to Double big past, supply is maximized the have have for seed

Following Double to expected our a XXX,XXX is quality farmers finished successful seed target. to than seed, sales Team of hit supply Team over more XXXX. acres million translate of our high $XX Double These harvest be in to planted by enough revenue

talked currently about have Double that an of expectation our brand, different with willing will Partners Double We some come expect Sorghum fiscal S&W in addition we agreement the moment seven label sell million that third nearly label private is label to this private It in At for to the customers. to partners Team we are sell $XX quarter, a selling XXXX partners. the Team but last in also. we have

should and be The geographies to other their utilize beneficial and expertise in partners leverage label distribution ability key us. private to systems

our formulate to beginning excuse America, strategy Africa. South South me, also are and Team Africa, Double Asia for We

we Double to piloting for our spring, sorghum Team sorghum this Team in pilot similar Sorghum are grain In XXXX. addition, Double

Double to Team X,XXX about potential a the sorghum this sell with acres of have We spring. forge

sales the XXXX, reason everyone, $XX line, the the we or margin significantly Double the second Double we about year. to EBITDA Team is majority of of in of product. are this Based our fiscal excited Team million outlook XX% expect remind occur half To profile the $X the million on of will so to about enhanced drop for in which

year. our as lightest the international Transitioning seasonally of to this the at and US quarter mentioned beginning, forage, now I is

forage So the hard points a domestic certain the how what back to half year I data the possibly are it is be, operations we extrapolate to while me just of and might think shaping of a that on couple comments year see up. let the to relevant make bit international

margins. pricing controls put in demand cost seeing [ph] increasing control resulting alfalfa, increase in First, and we manager and we are alfalfa This in an in the our also inventory are tighter in but nice pricing. in with place meina a we increase coupled improvement would --

few may crops a cautious to will ago June. as out supply months the and Additionally, we which in starting we shipping seed our the still to prior recently in there hope turn to the risks ease, remain around ability be and get international we door quickly encountered challenges as of chain here. them are to But the end assist

last I mentioned in quarter, has across of severely it This business. flooding domestic start farming bears and to our land Australia cropping mixed but led Eastern impacted repeating, Australian this slow the vast devastating enterprises. a areas has

water we once there sustainable be replanting and recedes, believe Also, will for required pastures. opportunities crops in the of remediation

So on a business a and the remain numbers. the feel internationally the both bit domestically. quarter, more very forage let on I'll heels strong Betsy within of we good our trends expand

to are begin Simply focused September leverage call and about of about driving the commercial As it's and our been beyond towards November, QX term. done the fiscal as we that year work for all execution five we talked over during put, call we past in years. XXXX, on has the profitability in end year near our in

We centers of out forage camelina our include crops, led including four on primarily our applications around our me, hybrid, intensely Australia specialty operate herbicide now by operations with previously for remain products biofuel solution, provide value GMO excuse and Double our well sorghum Shell the US generation focused Team, our have forage lastly, operations, next non and technology tolerant a key of as which JV as international we sorghum stevia, world, outlined which operations

guidance our for We year. are reiterating the

$XX sales in a expecting and end of we of EBITDA As are a guidance, $X high million. adjusted negative million the on reminder,

walk million On adjusted in negative million through bridges. the $XX and and the is you once end, in sales low $X Betsy again expand will it this a EBITDA. on momentarily

end With the will self-sustainable achieving the it that to first something high the and with during having of cash company to progress half soon the closer guidance a year, of standpoint. see from path a a made flow be we

of who'll now the we'd walk and over it end more answer be Betsy presentation. please. at numbers Betsy, her to turn questions me detail Let you happy to in the through

Betsy Horton

joining Thanks morning. Mark on and call to the everyone thanks this us

tolerant $XX.X region. second on in the Team to attributed revenue increase of a of in increase was increase X.X% $X sorghum start American an compared million the million Revenue increase non-GMO as generation is year's quarter, million sorghum Mina The the to line. $XX.X for quarter. primarily in Let's prior as the the solution Double North next sales to well with associated sales an herbicide million alfalfa company's $X.X

$X.X by in a of sales to a in This and decrease in was decrease to offset of decrease sorghum discussed $X.X million sales service $XX million revenue on 'XX revenue. guidance Mina Americas a alfalfa $X.X million, the the quarter, currently reiterate what is million. our last $XX the but to Mark guidance, of we range to fiscal year million revenue in hit

assumptions. the fiscal As XXXX to million following we look in making $XX XXXX, growth are from bridge to in million $XX million we to $XX

are revenue end On attributable in and million into incremental rest the operations. in $X revenue our to of of simply flat Team Double low the account growth guidance, taking the we

from higher and assumed in guidance, of Double our $X international $X the in volume, and we million operations operations. growth million million in forage Team to growth, the about non-DT of growth pricing coming assuming coming At half from then from sorghum with related improvements are end addition the $X from about half approximately traditional

basis was and growth XX.X% Mena minimization to the the quarter in XXXX margins of improved point of margins improved were to the downs. in of quarter. prior to right margin XX.X% Now the regions key in solution, turning driver compared to Team pricing sales increased fiscal The improvement second margins, year's higher company's the second the in Double market inventory margins alfalfa due gross the sorghum XXX

Now we'll operating expenses. transition to

reduction to GAAP with re the of operating $XX.X SG&A, remainder of from came expense reductions coming million. the in QX were in quarter, expenses half for prior of a R&D little XXXX compared decrease the from year's Our million second million A $X.X spend. $X the over

by new and and agreement. as level expenses ventures savings. are service show to incur income line. HR our both for for this thing administrative will the a handling under within be for Therefore, we IT, finance that Trigall Australia both in remainder will in other creation service for but things JVs the of an $X with the ventures One BBO mind biofuels, income OpEx accounting, of such our have for keep year, expense we'll some OpEx we up wheat operating will For million our track and be role still of in the the reimbursed we we then line, will playing and on joint is that

So statement confirm making will talk our that this that will next way the nuances are these stated we to adjustments about quarter, some goals. to income when about the for think flow we meeting through account we

For will the million, comp be back will will come year, through this we at income. a previous maintained play guidance likely in for flow you QX, that reimbursement add of believe adjustment, heads the $XX you the million. clear, stock-based our operating other is Once about into up. expenses, give adjustment be of but including to about wanting To $X

the second year. improvement improvement to a on adjusted million prior adjusted million to compared first adjusted a we $X.X negative million to million. of second EBITDA quarter at fiscal quarter, quarter we EBITDA EBITDA back year's for that negative $X.X an EBITDA adjusted in $X.X This $X.X the Now in of the line, of to the this the layers $X.X of improvement EBITDA, had million saw

Vision Shell or outlook of let Oil Bioenergy EBITDA more our talk me the with year, venture the the remainder share I VBO. joint for Before about for Seeds

million will $X which upfront receive receive also remaining the off -- and the year mentioned, portion which of Shell Mark mortgage of plus $X s in received million was has $XX on our we about Nampa will one received $X facility S&W of million, As million. paid another

pro ending remain forma the filed discussing we the issued now in guidelines September the connection balance with are agreement the in quarter XX, effective sheet XXXX while We general a the and was December, that same. X-K

As you in $X of the cash may us to the the payment plus in present million for Shell and $X long-term transfer value million seen adjustments, of facility have increase off receivable equipment, one of year. property, in was cash forma there make to million the accounts will pro facility. paid our which was debt reduction plant There the million on is $X.X the in to a Nampa corresponding course reduction the $X from and a

There was million the a was other ownership company's the in retention increase to $XX.X which fair XX% assets, of market value also our VBO. calculated of

minority In of funded and financial a VBO at ongoing in year in operating infuse all million first money a course operations after equity are JV, expected to the in investment. classify one and has Because terms JV $XX income impact to of on years. close million will and lose XXXX. anniversary The S&W's loss additional of an payment the is the an the we reports Shell owner basis, with will on $XX the through will flow an income as

we the adequately will been JV funded. expect S&W this to However, since impact non-cash a be has

first of discuss to S&W that Any directors. are distributions and be Details option will you our any of let questions, affiliates. after JV be through likewise board various expectations to JV Mark here. have me net the earnings lot As in JVs additional please time, cashed the are SEC There's the At the of filings we a at the cash flow the its if stated, will know. will any from that have profits few in equity years. positive of

look last back turn what out EBITDA our to bridge let adjusted how did guidance achieve XXXX. guidance. to Similar we to our let's me fiscal quarter, in Now EBITDA I

the gross revenue start is the a 'XX, for higher high a cost $X from DT costs for loss 'XX, LCM to end $XX lower improvement $X year improvements of million million profit and profit a or expected Starting growth, million to both fiscal Let's the as production or fiscal sorghum market our the of $X year. well $X growth our overall in a which million our due in and charges following to end expenses. a at for our adjusted assumptions, we operating a $X incremental traditional our cuts international gross in EBITDA with to improvement as million improvement forage due EBITDA adjusted assumed negative million our of

of $X adjusted gets expected million year us All that for an fiscal EBITDA 'XX. to loss

remind end end For the revenue Team incremental low attributable account to did of guidance. Double we low operations. assumed into the I'll for We revenue of our you and our growth guidance, rest simply adjusted EBITDA of in took the revenue flat what our

million assumed adjusted EBITDA low would end in for of adjusted DT, same and be the On loss. our EBITDA, we the did a range growth only which $X

We of and million. XXXX. of made market $X would benefit charges and due to some OpEx our international in additional million be margins loss end benefit This about or increase EBITDA $X would the have captured forage million lower assumptions; of with $X cost an adjusted versus combined, we

You not fiscal will of that for bridge include VBO notice this share S&W's 'XX. does loss

we to losses line. noted, the flow our few income that we've through to incur will venture years that XX% statement investment As an of equity first the anticipate and

flow adjusted non-cash to do Please capital are for impact we going investment from to becoming exclude that years JV, S&W not venture EBITDA. the However, a is anticipate minor from because these generating, cash amounts. for the adequately before albeit exclude adjusted it calls, EBITDA is note given we we it Trigall Australia it plan that funded and to

to bit factors I wanted is of a year. these second Now our ahead this half the of share realize complicated, but

MFP, standby XXXX. our bank $XX the S&W agreements. for to facility. about largest Letter let's credit maturity to support December, talk In show of million on million $XX CIBC our their Credit back March extending by the facility continued Next, CIBC our the shareholder maturity extended our XX, of of

CIBC long-term new extended to this VBO close partnership pursue to allow deal actively lender time prior transaction post continue a to our the us maturity. extra We with from to refinancing replacement appreciate the and

ahead of pathway us, fiscal year great progress remains believe of we There of forward. the going are extremely a pleased definitely work XXXX. lot and us we provides first a with but half So it

will, I call I back to will that, Mark. turn over With the

Mark Wong

come Thank especially you, our this with JV so excited the make made far and remarks. great all about feel A quarters groundwork With for improvements Many few the few. results been We two Shell. the have our execution we true I and really about new has really in company beginning worked year critical very consecutive this highlighting are field people the last JVs, us. in hard closing Betsy. feel significant of progress we're operating now to the the bio over that to benefit laid from of

As questions much we'll operator S&W your the for and the thank forward call your Thank support now And it so I'll we to collect and look for the today. your turn attending continued call. to questions. always, over of in you you

Operator

instructions] [Operator Capital. We Street from Ben, ahead. Ben have go coming please with Lake first question Klieve

Ben Klieve

questions. for my All taking thanks right,

line first the guess on and JV congratulations on the here. of I questions finish all, couple a getting Shell First

getting the of that guys kind of the are this like that the year, of or given as first costs is, finish signed or JV Trigall, line. you the the in nature any second that the there fact legal were question agreement half you the elevated with of First maybe expenses complexity around also quarter coupled anything arose with

Mark Wong

you let that. I'll answer Betsy,

Betsy Horton

transactions both the we did Yeah. Thanks question. Ben getting across one line. have for the Yes, costs time for some transaction

one in QX. queue let's $XXX,XXX have You'll it that as, see, for that we time, our see

that well. the QX in JV see charge. come a amount amount time Shell a You -- given we to Probably as more onetime but they're a EBITDA through, similar excluding are will related one

Ben Klieve

that apologize, it. in if was got release, missed I I that. press the sorry outlined If, Okay,

then help to the other JV oil referred provide a that And with kind vast kind Shell if working any looking that's of has feed, Camelina, a a Okay. the Very bit on to -- context but and Can know, you kind of Mark, these of at the helpful. crops of would extent already, be into of around moving with universe. you would been you're which you kind of any S&W implications global great. question starting crops

Mark Wong

thanks, Yeah, Ben.

have these think I view to measured markets of a just important are gigantic. really of it's These kind markets.

acres a have US grow the crops the XXX could million wouldn't enough diesel you to You that supply are and seeds in these US market. of cover oil

So, that more are planted planted corn. the acres you're acres now talking in about the in than

our farmers living basically It requires their to do what And of society we Shell standard are and energy is increase well, They're science support sell focus and to huge well how on markets. do clean with we in produce what them then about says and and trying we we both then something them, seeds, we right? apply and we seeds the improve we to acres. to we

fuels What fuels Shell their does distribute these well to sell is then customer they they liquid refine and and base.

the and sweet it, it's excited where doing And down we're their experience this that's spot about so, really about both excited these. of companies are a joint and what's venture is why so so why we're

your allow two be now. year. planting a we'll seed as for up but, last losses on grain for grew as been ramp seed of about the in we're couple Betsy specifically, in also we with will the the the said, this sense answer year also We a focused DBO in year, concerned have we which for we're Shell crop first which question years production the years that have expansion to opportunity current ground, and To big a US, mentioned crop in probably but that the production we've we'll get Betsy at next

mean was and signed. and and been we the potential that time our couldn't even important whole it in until name laying so agreement on talking time -- names we agriculture the the is weren't we we that venture, So, before joint deal weren't focused us about we've working because where this but obviously and not with doesn't groundwork was done, that Shell was

We seeds for camelina people a production, focused which cousin used are lot really that talked business. a soybeans Right not food. others. a soybean like oils, Coronada but and [ph] these have for we're second, the the farmer few on production oil US second in So price food diesel and are other or they a crops we're after source the us about, crops into planted being and oil get they that Camelina of to give going probably affect give us now, don't the is to a they of because cover

the start your camelina question, looking we In XXXX, in so implication of will Australia. geographic at

and a Singapore that also on the working production So biodiesel Shell plant has be next supply in plant facilities. decade other has us for facilities in next wants Green and DBO oil supply Diesel conversion Asia, to over to to other that Shell geographic and we'll other regions

a Shell does so big future. So sort -- the our other on that so about breeding on of collect geographically the the seed we other we're have things and venture we that improving the a germplasm normal it's thankful production programs but and we're of a not it's that start big camelina and other more We'll crops, -- US focused but now we're company really markets. on excited than in and done haven't do means with worldwide to opportunity this joint we're out expanding seeds, what all

Ben Klieve

to that would've this dollars in eager there than piece this, then I'll just those occurrence? was more you. quarter, the of is a and No, get bought hand were One Got -- you Or Really, that there random into more revenue realized that to second initial question context. were drove that Double distributors farmers, premature of realization of line, for was revenue that -- they year? earlier kind get of expected? appears this was it's in that what back you sooner this in for helpful to anything Team read so the exciting, certainly the million certainly Can me is than expected. be

Mark Wong

Yeah, small amounts, Team problem then readiest weed your, the your planning that. that rest can of your and on they haven't it saw last excited the basically the our say and in if talked very acre, Team go of consider Double grass very, about we show we solve year it market's Double we for Double us and about and we, farmers philosophy And on if Team is you to maybe buy we acre that's farm. your weedy should

the to we product I've that last this, farmers over farm. over been And as once since the wants his small herbicide herbicide, the farmer seen in one herbicide impressed number I've we're decades only own a converts he of so, year, the the doing on one had performance with resistance of usually very

keep So because couple he him he's different for herbicides someone wrong herbicide. maybe of concerned works won't of kind that a might spray who the

one the he and that's years. hopefully herbicide seeing of converts to going we're next everything to So in couple start what

-- a lot big farmers where year that because in out next we want we're be acres year also our acres, it's to current this and more estimating to than of with XXX,XXX year another So want we're we get if it's and product really it come it get your distributor, your put and just people a can flat it. it on they take excited about in need willing if so you're and the to, storage farmers

year. And seed sort supply knows we if you're then short before, farmer, as this on it's everyone, lining because we're for a of said your up that still

a supply. have to trying sure make they're so they And

Ben Klieve

to that start Got it, my on place to I'll taking Alright, more Very got probably it. in for here. good A get good great That's it. leave talk the to plenty back well year line. about. a Thanks then. one. questions

Operator

Our please Capital. instructions] Sweeney Gerry, Roth is you Pardon sorry, Gerry from Gerry, next Gerry. coming go are there? me. [Operator from I'm ahead. question

Gerry Sweeney

for me Can worries, I Betsy, now? no call. am, Mark, yes. taking thanks No my you hear worries.

be or there should the with JV, type more aware Shell, terms on exclusivity any of? regions or anything of of question two one type we anything crop or Shell is in Just that

Mark Wong

they the VBO right there. to opportunity other -- has companies actually to an other actually if grain camelina companies, oil We see international sell

of it's for our and footprint to will four of Shell, diesel be in a over the won't if that but anybody such these extra vast are producing So so to that be exclusivity, market markets else. reverse left any Shell the and sell huge belief it's grain decade the sort next there

it supply just and this will hard to the and VBO we're it's to said now farmers then an we that so that to and because crushed fuel, and creating. farmers to going Shell it be the that and pressed all be with pleased and conversion oil get pressed of Shell hard develop and practically diesel and So seeds sell accumulate vast to we'll then demand the from then jet sell and than grain back that plants, we're more buy as before, grain I shell's has deal basically network

Gerry Sweeney

gears of United talked of and in talked planted? Switching DT Got into economics the of sorghum the that the also we where some how In acres it. planted sorghum acres and sorghum. what plays also past, number are -- farmers about, we've over those go you think to on I corn planet about States, is? could versus that And

Mark Wong

mentioned big had year, There So sorghum. six also a we grain acres USDA acres farmers sorghum, around provide last of number of Ford DT for improvement I financial also we think sorghum. we and around additional million in are said, these, will believe that

that's think next forge the is our lines. into DT market to the gene we introduce in US So sorghum

forge, drier But the states. big the states big grain are the sorghum

a water crop. So less corn sorghum requires to XX% about than make

the Nebraska, are So states. Colorado, Eastern big Texas, those like Kansas, states the sorghum

and for used ethanol feed both feed those is Sorghum in animal stock states. in

maybe the projecting up million because going think to issues. in USDA water acres are go of just is sorghum I this to $X that year

farmer think, we option for is corn that, To to your bids so sorghum and compete just have product the to before our sorghum just think of starting learn I starting control that with community And well grass line. how learn an does to that didn't they we're question weeds.

an giving and at control we're And least weeds for them can sorghum. but couldn't corn now so, they planted because corn, they grass, option

a problem but tougher the that going just tougher we on relative that production thinking that and price we're and of seeing and are sorghum, to other sorghums demand and the here in think issues depends of corn the in and is in start the future things tickling farmer lots on we it sorghum, your water the and US. piece also going on corn benefit win. to general, that depends think Chinese sorghum, to sort to of and So we're in But as market water states versus

Gerry Sweeney

seed that is You curious to to I roadmap, out if herbicide believe the the And Got product right your bring resistant DT had of version? it sort the forage seed get to then sorghum the next the side, on similar more grow it. to it just helps steps with digestibility and

Mark Wong

access right? the these at. new digestibility technologies that basically genes way stacks they with I control at developing trait time the gets all point these that it's other, Monsanto's on trait board farmer we DT in looking make so So, were sat one were grass And are the to, this stacks I we a The and money when valuable. to incredibly new Monsanto at we're with or where in

Australia And also excuse it's able forage sick in to storage, get but a just to in make its US there's -- at in and sheep, the sick. to and looking one cattle particular be mainly it don't the crop a cattle cattle feed me, we're where be the his to cows would they cow

our other so problem We, that must eat trials we guess they a during, take taste it. and real find have just rabbits with good other in things, that because and animals, I come

the some because to So animals didn't because did the have these out we animals and to we're so basically sick. of crop have they where get going out how fields tastes places good our wild keep ate to seed our figure

was not excited and that will be it's in a have on be basically top it's next herbicide in we've put three will opportunity years depends but digestibility through be there's or be to sort stacked the genes gene. whether not some to sort a of this at we're year before the on The super a a other and genes it'll grass been to gene separate so gene markets. will ago. this of be or new opportunity digestibility where DT two a -- They'll that new do, of we where markets, other it's thinking fascinating two companies, So great two problem us

for times got near very exciting the So us. term sorghum it's it's in for it,

Gerry Sweeney

It you On to, I international, US, get going do that opportunity? herbicide, here thinking should not or market sales good alluded what's to in the you international? sounds what are should cart you before I or how you horse. be but attack the How the like do at go pretty do if but least that? the the mentioned, we market alluded want say don't

Mark Wong

that times there of people the remind where place our call in market investment those year cash and next to we giant incurred to Double to smaller is losses want profitability funding also. and are And to Ag development it obviously important us EBITDA. and long to contributions raise. getting on five now making is that's I the years Team that sustainability And significant it really and Yeah, took this where smaller expect are we difficult in here bring hopefully

and and really focus stuff inventory on make term going we control to opportunities trying to control and we're money like that as near is So, and us obsolescence the our costs do that. what our

Double imagine which We if sales probably As margins though seed top the in have a in three Team the our we of we you We're manage the you Australian might very Australia Australia. have strong we the Middle East, than with position But sales, out more US companies in are actually Australia. have bit count US. higher. to in a

take hybrids that they going selection of work market. well make in it's Team sure Australian perform to be putting We trial we're that Double into the think some some amounts needed. There'll So, to Australia.

free process Australia. as US introducing as we're new during going So the gene germplasm understand We're through that we really quickly a in where just to it's the well. be like not that in going

the forward you stacks thing the your to XX So competitors before is the takes for trade their it once had long, years little a is a long of bit thing the The than Monsanto respect the harvest stack put markets, to harvested look bad a market. good they into more time. of can trait value.

gene improvement over stack the real is single like that a think business trade just we trade So Double Team. a

Gerry Sweeney

in a update of like on still else I I'll in the an line. last One Sure. and was that's Double Team. part process. strategy. And a talked it. Ag, question us then if give curious We licensing could back if Got everything bit resistant little herbicide about of jump you it's

Mark Wong

Yeah. Sure.

to because the was still big so plus both So and margin allow the in farmer your to definitely a traits it's money are Monsanto to the basically make have strategy. own strategy and make he margin to acres for on competitors left of enough a that originator these competitors, obviously there's to seed license of your include the margins profit your It bags the the traits the gene. traits buys that on the profit still

of management the you time, I'll companies Team big do have state need grain that fact we unusual originate something is genes. farmer's and approval Double performance that this field but, and it's another then have get sorghums for of strategy, at company we that S&W a gene in a very increase like the and looking we've all and that we're regulatory Again, very, technically doing long been companies, coming forward we're amount a the worldwide to at then and The seed. small to to staff comfortable do small of what in sort and not with S&W sorghum,

own. been going and than tries the for their industry last that that's continue. that These licenses genes to things up That's the protection gene is to trying the such you I rather similar like basically come are all against genes. people this And model develop from the leader industry years, other process we with think basically, said, to XX a that difficult give is the the

that think Double we with couple that or hopefully Team the put of in that we're product should their they two, is people believe year some have the now license in on our announcements competitors and a we'll lines. next in something and right own discussions And there who

Gerry Sweeney

the I it. Got for it. appreciate update. Thanks Okay.

Mark Wong

welcome. You're

Operator

Brad [Operator [ph] next please from Jennie comes instructions] Brad, Our from question ahead. Scott. Montgomery go

UnidentifiedAnalyst

Is just Horton. and opportunity this the seed have with biofuels. at, due you opportunity you're diligence for the Hi How I the that is I'm that seed just go-to are hi biofuels? looking bean. with the or camelina you? something my Mark doing run castor better Ms. decided into on

Mark Wong

lots now, Yeah, camelina for different reasons. of right choice first is our

not our any produce more told again, fathers that to we we they're makers. do farm as second as making a us, for crop, it areas camelina So right look can

Oregon -- those Montana dry. And an acre oil So and Washington areas food every for part of as Idaho a basically, need we is farm need to year we up an my to example, pretty the in crop. for eastern and year twice, a once belief are once crop that

into will other look but for Those bean say areas camelina. little castor is a at farmers. to We pretty whether early key relationships areas a concentrates is could where at broad fit going obviously opportunities it, are we crops, line has with think yet but and geographic -- the on appeal look have too where it's we we product what strength, have to we that

always That's important.

to We good hopefully reputation, a farmers. have a have reputation with

So crop they're that when try to willing to new that. we do are trying to get a them

be at portfolio. in might it's for us of seed castor on to and want early to be have Camelina looking a spread crops we so start what be bit And but oil little to how to other we'll because a bean the potentially areas that do the we with in future, too about geographically concentrate careful our grow little wide we our net others best too for sort talk much

UnidentifiedAnalyst

Okay.

of negotiating S&W with I Shell assume to ongoing CIBC? is infusion clout that your will the with improve With that really capital the venture

Mark Wong

let I'll Betsy? answer that Betsy question,

Betsy Horton

was had more the Yeah, for the that question, It improves to allows underutilized using rate. get overall, we services take that VBO It alfalfa to for a right? our mortgage for no, certainly need us takes situation we thanks market the from and the out Napa on just and facility facility at a processing Brett. that

our taking by improves cash it flow that and out So improves debt as mortgage. situation well

come in standpoint. a coming in situation year that's and also cash one our will the improves banking addition, come in In from that has

place continuing you discuss we of lenders ahead that's refinance get a this in So know, with maturity coming here the of with CIBC spring. to make up sure and that good that all

UnidentifiedAnalyst

a one, last the on one update And brief initiative. Stevia Great. just

Mark Wong

talking to flying and still them with opportunities forced to down. beginning Ingredion Stevia better the and and We're situation America seems to There over get things balloons Yes. there with real about Force the are politically Air shoot no opportunity. the China North the other being

situation have that can't China. just grown the -- to leaf You supply themselves in. in Ingredion finds Stevia being full of that's your in And being afford

things So a these take these -- while. but

it of a had my us Shell to a the and people with S&W agreement there. a because the deal who Shell, negotiated over we of relationship. relationship call the why just get was to because year I that's involved my gave our over in American XX it Shell, helped worldwide Our end complicated all North with We meetings thanks accomplish at with that and statement not

They of obviously execution, stated had both that partner were make as spot we're right we the our doing in that sweet of right that, seed do to sure to company kind basically spot maybe sells company what sense that ha right? been this in customer base. the where decades. experience. the in have liquid what the we And, were farmers, This not they We're then trying their make of had they be and the are fuels to refines I they're they've sweet to much and not a companies companies sells isn't that doing a both to of sure for the something partner, and is about

than And pleased about so as those came that Stevia. take Ingredion we're just talk lessons and we we Shell about more to

come think about who there. partner. sales understanding nothing We contributions of have your still on working and we $XXX is to market's and Ingredion of we in going it's We we'll the be that. on is just breeding market million I each is yet. we We've sales. million value to the the of lot crop Stevia, continue years, a still think And we to And new that a market Stevia XX been US So $XXX to to to in an product leader opportunity. a remember, think Ingredion what question, finished announce company's work the think big haven't right it's there's great but with for who on we're

UnidentifiedAnalyst

and the Thank taking show my deal. good questions on you for Shell

Mark Wong

than You're welcome. We more that. appreciate Thanks again.

Operator

question-and-answer conference you. would any turn I like remarks. for closing back over And management to our Thank concludes to the this session.

Mark Wong

everyone So building traits making it's quickly of in change sure cost sales and that near all one look on remain and a that thanks we're a possible. as the hopefully focused point those this on and is history for as calls We It's the and term, Seeds. call. back S&W we'll new that focused DT being on maker in we coming control the year on get on can and our profitability sorghum traits the for

us In just gigantic, the and opportunity. next of markets we time. over huge real our you'll from in addition, Shell The earnings as is are and more a about work the Shell with calls though, opportunity hearing details define be thing that the plan

being forward Thanks the thanks with the and quarters. again. you speaking So of couple to we for on everyone look in again call, next

Operator

for concluded. now attending has presentation. conference Thank you The today's

You may now disconnect.

S&W Seed (SANW) 13 Feb 232023 Q2 Earnings call transcript