S&W Seed (SANW) Tops Q2 EPS by 2c, Revenues Miss
S&W Seed (NASDAQ: SANW) reported Q2 EPS of ($0.07), $0.02 better than the analyst estimate of ($0.09). Revenue for the quarter came in at $18.58 million versus the consensus estimate of $20 million.
Mark Wong, President & CEO of S&W Seed Company, commented, "We believe S&W's transformation is firmly underway to becoming a multi-crop, middle-market agricultural company, with a focus on developing higher value crops through technological advances and proprietary breeding. While we only recently acquired the sorghum assets of Chromatin, our conviction in the synergies that we believed would be available is growing each day, including our belief that we can build upon a U.S. farmer-dealer network, leverage our international distribution channels, drive efficiencies in the production process, and accelerate development of next generation trait technologies. These important factors were key components behind the guidance we previously provided for revenue growth and positive EBITDA contribution from the acquisition in fiscal 2020. Overall, we believe we are delivering strong execution on the integration of the Chromatin acquisition."
"We feel that further evidence of the traction we are seeing in the turnaround of our business is our return to organic revenue growth during the second quarter and first half of fiscal 2019. On an equivalent comparable basis (excluding the impact of ASC 606 and excluding any contribution from the Chromatin acquisition), revenues increased organically by 14% during the second quarter of fiscal 2019, compared to the second quarter of fiscal 2018, and 3% during the first half of fiscal 2019, compared to the first half of fiscal 2018. Our efforts to grow sales in the United States and Australia with dedicated sales personnel, coupled with small improvements in the Saudi Arabia market, give us continued optimism that our customer centric strategies are yielding dividends. We believe this renewed sales focus, coupled with a realignment of our organization across geographic lines as opposed to products lines, has the ability to lead to continued improvement in the future."
Mr. Wong concluded, "I am enthusiastic of the opportunity we have at S&W to continue our evolution. The strategies we have implemented from an operational and strategic perspective are proceeding according to plan. The further integration of the Chromatin assets into S&W should only accelerate in future periods, which should in turn create a larger and more diverse platform from which to operate. I thank our shareholders for their continued support and look forward to the future with optimism."
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