S&W Seed Company CAPEX surged on 492% while Revenue dropped on 27.5%
09/23/2020 • About S&W Seed Company (
$SANW) • By InTwits
S&W Seed Company reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -15.8%
- S&W Seed Company spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 0.0%. Average EBITDA Margin for the same period was -1.6%
- S&W Seed Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $5m in FY2020, $1m in FY2019, $1m in FY2018, $3m in FY2017, $3m in FY2016
- The company has unprofitable business model: ROIC is -14.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.5x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 27.5%. Revenue decline showed acceleration in FY20Q4 - it was 44.8% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 15.0 pp from -0.79% to -15.8% in FY2020. EBITDA Margin pursued a declining trend in FY2016-FY2020.
Gross Margin dropped on 18.3 pp from 37.1% to 18.8% in FY2020. During the last 5 years Gross Margin topped in FY2019 at 37.1%. SG&A as a % of Revenue jumped on 10.9 pp from 15.9% to 26.8% in FY2020. SG&A as a % of Revenue grew at 3.2 pp per annum in FY2016-FY2020.
Net Income margin dropped on 16.2 pp from -8.5% to -24.7% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 5.8%. The company's CAPEX/Revenue increased slightly on 1.7 pp from 4.1% in FY2017 to 5.8% in FY2020. It's average level of CAPEX/Revenue for the last three years was 2.9%.
Return on investment
The company operates at negative ROIC (-14.5%) and ROE (-21.7%). ROIC dropped on 10.6 pp from -3.9% to -14.5% in FY2020. ROE dropped on 11.4 pp from -10.2% to -21.7% in FY2020. ROIC stuck to a declining trend at -3.5 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is 3.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2020. Debt surged on 97.8% while cash surged on 20.1%.
S&W Seed Company has short term refinancing risk: cash is only 13.8% of short term debt.
Financial and operational results
FY ended 06/30/2020
S&W Seed Company ($SANW) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 96.0 | 75.4 | 64.1 | 109.7 | 79.6 | -27.5% |
| Gross Profit | 18.4 | 16.1 | 14.8 | 40.7 | 14.9 | -63.3% |
| SG&A | 10.4 | 11.8 | 10.5 | 17.5 | 21.3 | 22.1% |
| EBITDA | 5.2 | 0.9 | 0.4 | -0.9 | -12.6 | |
| Net Income | 0.4 | -11.8 | -4.7 | -9.3 | -19.7 | |
Balance Sheet
|
|---|
| Cash | 6.9 | 0.7 | 4.3 | 3.4 | 4.1 | 20.1% |
| Short Term Debt | 23.8 | 37.7 | 33.1 | 11.9 | 30.0 | 152.4% |
| Long Term Debt | 11.1 | 1.1 | 13.0 | 12.2 | 17.6 | 44.5% |
Cash flow
|
|---|
| Capex | 2.6 | 3.1 | 1.5 | 0.8 | 4.6 | 491.7% |
Ratios
|
|---|
| Revenue growth | 18.3% | -21.5% | -15.0% | 71.2% | -27.5% | |
| EBITDA growth | 14.5% | -82.5% | -51.4% | -294.1% | 1,353.0% | |
|
|---|
| Gross Margin | 19.1% | 21.4% | 23.0% | 37.1% | 18.8% | -18.3% |
| EBITDA Margin | 5.4% | 1.2% | 0.7% | -0.8% | -15.8% | -15.0% |
| SG&A, % of revenue | 10.8% | 15.6% | 16.4% | 15.9% | 26.8% | 10.9% |
| Net Income Margin | 0.4% | -15.7% | -7.4% | -8.5% | -24.7% | -16.2% |
| CAPEX, % of revenue | 2.7% | 4.1% | 2.3% | 0.7% | 5.8% | 5.1% |
|
|---|
| ROIC | 2.0% | -2.4% | -2.6% | -3.9% | -14.5% | -10.6% |
| ROE | 0.6% | -18.3% | -6.6% | -10.2% | -21.7% | -11.4% |
| Net Debt/EBITDA | 5.4x | 41.5x | 93.8x | | |
S&W Seed Company ($SANW) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 12 | 29 | 26 | | -53.0% | -33.5% | 60.1% | -44.8% |
| EBITDA | -3 | -4 | -1 | -4 | | -278.7% | - | - | -3,128.2% |
| Net Income | -5 | -7 | -3 | -5 | | -23,632.0% | - | - | - |
Balance Sheet
|
|---|
| Cash | 1 | 2 | 8 | 4 | | -73.6% | -4.8% | 193.6% | 20.1% |
| Short Term Debt | 12 | 19 | 31 | 30 | | -52.1% | -59.5% | -39.0% | 152.4% |
| Long Term Debt | 14 | 14 | 21 | 18 | | 13.7% | 10.3% | 73.2% | 44.5% |
Ratios
|
|---|
| Gross Margin | 25.0% | 17.7% | 22.1% | 12.5% | | 4.1% | -7.5% | -4.3% | -42.5% |
| EBITDA Margin | -23.1% | -35.3% | -4.2% | -16.1% | | -29.1% | -29.8% | 4.3% | -16.4% |
| Net Income Margin | -40.1% | -54.0% | -11.3% | -18.6% | | -40.2% | -39.1% | 7.1% | -11.7% |
Peers in Agricultural Products
Below we provide S&W Seed Company benchmarking against other companies in Agricultural Products industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
