S&W Seed Company (NASDAQ:SANW) Q4 2019 Earnings Conference Call - Final Transcript

Sep 18, 2019 • 11:00 am ET

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S&W Seed Company (NASDAQ:SANW) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Mark Wong

with other investments, but I don't see right now an opportunity that I want to commit S&W to. It's an interesting market, lots of people are getting into it. But right now, we have so many opportunities in more traditional agricultural crops that with -- on paper very, very interesting returns, like I said, mid-teens or higher that we just don't want to lay on the risk of a new market like hemp, where nobody really knows how big it's going to get, where the acres grow a lot, then shrink a lot. If you follow marijuana as sort of a crop, then maybe hemp will emulate.

So when the first -- when Colorado first came -- legalized marijuana, I think, about six years ago, there was a lot of money made early on in the first couple, three years, but it's really marijuana is proven to be a crop like any other ag crop. Price varies with demand and supply. And right now, there's more supply in marijuana, both legal and illegal than there is demand, and prices have fallen over the last three or four years, and not many people are making money.

It's difficult to understand that given mostly the Canadian companies that are public and the huge valuations they get, multiples of sales, right, not multiples of earnings because a lot of them don't have earnings, but it's a risky market. We think -- we're watching them for sure. We watch both those markets. We kind of understand what's going on in them, and -- but we think the opportunities for S&W are really more focused on the four crops that we have, alfalfa, sorghum, wheat and sunflower and then our stevia operations.

Analyst
Roger Miller

Okay. Well, I appreciate you answering my question.

Executive
Mark Wong

Yeah. You're welcome.

Operator
Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mark Wong for any closing remarks.

Executive
Mark Wong

Thank you very much, operator, and thank you everyone for being on the call today. I think it's come across that we're pretty darn excited about S&W's prospects, what we've achieved in 2019, where the company is going in 2020. We're calling 2020 the year of integration. I mean, we've got to show that we can take market share in our crops. We've got to show that the investments we're making in breeding and in sales and marketing can get us additional bags of seed to the top line and to the bottom line.

So stay tuned. We're going to probably do one big acquisition in the year. We've got a couple of candidates for that. So it's a busy time. It's a wonderfully interesting time for S&W and for US agriculture and worldwide agriculture in general. And we're very, very excited about the opportunities that we have. So thanks everyone on the call, and we look forward to talking to you in the quarter again. Thanks so much.

Operator
Operator

[Operator Closing Remarks]