S&W Seed Company

Good day and welcome to the SNW Seed Company second quarter of the fiscal year 2021 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touchtone phone. To withdraw a question, please press star and then two. Please note that this event is being recorded. I would now like to turn the conference over to Robert Bloom with Lytham Partners. Please go ahead.

All right. Thank you so much, and good morning, everyone. Thank you for joining us today to discuss the financial results for S&W Seed Company for the second quarter of fiscal 2021 for the period ended December 31, 2020. With us on the call representing the company today are Mr. Mark Wong, President and Chief Executive Officer, and Mr. Matthew Zott, Chief Financial Officer. At the conclusion of today's prepared remarks, we'll open the call for a question and answer session. Before we begin with prepared remarks, Please note that statements made by the management team of S&W Seed Company during the course of this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results, or strategies and are generally preceded by words such as may, future, plan or planned, will or should, expected, anticipates, draft, eventually, or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements and including the risk that actual results may differ materially from those projected in the forward-looking statements as a result of various factors and other risks identified in the company's 10-K for the fiscal year ended June 30, 2020, and other filings made by the company with the Securities and Exchange Commission. With that said, let me turn the call over to Mark Wong, Chief Executive Officer for S&W Seed Company. Mark, please proceed.

Thank you so much, Robert, and thank Hello to everyone on the call today. It's always exciting to be able to speak to everybody. The management team, Matt and myself included, are obviously very excited about what's happening at S&W. And it's always our privilege to continue that story with all of you. So just a reminder of a couple of things that are important when understanding what we're doing at S&W as a management team. You know, we continue with the strategy. of moving from our history of being a single crop company in alfalfa to now obviously focusing on alfalfa, but also sorghum, sunflower, wheat, stevia, and the pasture products that we acquired in our acquisition of Pasture Genetics early in the calendar year last year. And I haven't said much about the pasture products, and so I wanted to just spend a minute speaking about those you know they're mainly right now our product line focused in Australia although we're moving those products to the US also in Australia we you know we believe that there is a huge opportunity to improve both the pasture and and animal yields per acre in Australia. And we see some very innovative things happening on the pasture side. So on the animal side, we see people trying to manage the cattle on a much more renewable, regenerative basis. So there's this term regenerative agriculture. where animals really are part of the process to generate uptake of carbon into the pastures. And so we see the first deal in Australia. Wilmont Cattle Company in New South Wales, Australia, just announced a sale of $500,000 of carbon credits to Microsoft. We think that's the kind of deal that you're going to see more of. And we think our position in pasture products allows us to work with those cattle companies like Walmart and, and, uh, and create these kinds of opportunities. Also, I'm not sure in my background, but, uh, that people know this, but I was, uh, CEO of a Pacific fruit, uh, company in the U S which is, uh, what, which was 20 years ago, uh, when I did this, one of the biggest Apple companies, in the U.S. up in the Wenatchee, Yakima, Washington area. We had about 15,000 acres of apples and cherries. So, you know, I have a big background in permanent tree crops. And as you all know, lots of people are looking at these pasture and cover crops for almonds, avocados, apples, cherries, the crops I was in before. And we just think that there's a real opportunity to basically improve soil management, improve water conservation in those acres. And so, you know, I haven't spoken much about pasture products, but we're really excited about the opportunities that we think those products will give us in the future. So continuing on though, you know, again, we are the only company that has an integrated technology And that means, in our definition, traits and also germplasm, elite germplasm that we develop ourselves. So that combination of putting those traits into our elite products for farmers is what we do. And we're focused, as you've heard before, on those crops that are the next largest in acreage after kind of corn, soybeans and cotton, the big crops that the big four are mostly concentrated on. So we continue to develop those crops. We were excited about our trade programs that we announced in December. Our first trade introduction is happening as we speak in the Northern Hemispheres spring planting season. So we're gearing up to introduce our double-team sorghum, which is a broad-spectrum grass herbicide gene that we have embedded in our elite sorghum products. Then in the fall, we're going to be concentrating on introducing our first alfalfa trait, and that's our improved quality trait where we've basically down-regulated the lignin pathway. and we've created a more digestible alfalfa for dairy and beef calves. So we're pretty excited about all those. As you know, traits take a long time to develop, somewhere around six to eight years. So when a company like ours has these traits to put into the market finally, it's been a long process and a long wait and a lot of hard work on the part of our technical and research people and you know it's a great opportunity to show the market what kind of new and innovative products we can develop so we're really excited about those traits coming we're really excited about the five six crops that we're in and as I said you know we're looking always as in the pasture products for new inventive ways to use the traditional products in new ways that the ag markets are calling for. So, all exciting things at S&W. We also, you know, find ourselves in a very excellent ag market, and so the commodity prices continue to be strong. Corn is up about 45%. The commodity price for number two yellow corn is up about 45% over last year at the same time. And sorghum is about up 30% over last year's commodity price. So farmers are excited to see what planning decisions based on weather and economics they're going to make this year. And we're coming up to that season, right, where in the northern hemisphere, especially in the U.S. You know, we start seeing planting in the southern part of the country in March and marching north as the weather warms and soil temperatures increase. So it's an exciting time for all seed companies, and it's a great time for the seed industry and for other input industries because commodity prices are high and farmers can make money. So the net... improvement to us. We're pretty, as I said, optimistic about this year. You're going to hear some details from Matt about our sales forecast this year, but I want to tell you all that, you know, for 2021, the full fiscal year, we think core revenues, we're going to increase our guidance. We think core revenues are going to be in the sort of 78 to $81 million range for our core business That means not counting our pioneer business. That's about 30% to 35% above last year. The growth is mainly coming in the U.S. and Australia, our two key markets, the two markets that are the sort of linchpins of our strategy. And as we integrate our acquisitions, so the chromatin acquisition in the U.S. where we acquired sorghum and we, frankly, acquired the double-team trait, and the pasture genetics acquisition about a year ago in Australia. Those have really strengthened our operations and our understanding of the market and our ability to deliver products to the market. And so we'd like to tell the market, to tell all of you that we're going to be increasing our guidance. So for the full year accounting pioneer, Uh, we're saying, uh, sales will be 92 and a half to 95 and a half for the full 2021 year. Um, so that's, uh, really exciting for us. All of our, uh, management and employees are working hard to make that happen. And, uh, Matt will give you some more details on kind of the financial picture for the company. But, uh, It's looking like one of those years that we all are in the ag business for, good commodity prices, exciting introductions of new products from our breeding programs and our first traits into the market. So all good things for this year. So that's obviously translating to increasing our guidance for the year. So with that, I think I'll turn it over to Matt, and he'll give you some of the details on what's going on from the financial side of the company.