Stran & Company Reports 23% Increase in Six-Months Sales Year-Over-Year and Achieves Revenue of $17.5 Million for the Second Quarter of 2023

Rhea-AI Summary

Stran & Company, Inc. reports an 18% YoY increase in revenue for Q2 2023 to $17.5 million. Organic sales increased by 11%. Gross profit increased by 35% and gross profit margin improved to 29.1%. The company expects the trend to continue and plans to leverage acquisitions for further growth.

Positive

• Stran & Company reports an 18% YoY increase in revenue for Q2 2023 to $17.5 million
• Organic sales increased by 11%
• Gross profit increased by 35% and gross profit margin improved to 29.1%

Negative

• None.

Conference call to be held today at 10:00 AM ET

QUINCY, Mass., Aug. 14, 2023 (GLOBE NEWSWIRE) -- Stran & Company, Inc. ("Stran" or the "Company") (NASDAQ: SWAG) (NASDAQ: SWAGW), a leading outsourced marketing solutions provider that leverages its promotional products and loyalty incentive expertise, today provided a business update and reported financial results for the three months ended June 30, 2023.

Andy Shape, President and Chief Executive Officer of Stran, commented, “We continue to execute on our business growth strategies, as evidenced by an 18% year-over-year increase in revenue for the second quarter of 2023 to $17.5 million. Importantly, our organic sales increased 11% compared to the same period in the prior year. At the same time, our gross profit increased by 35% and gross profit margin improved to 29.1%. We are very proud of this organic growth and margin improvement given the current market environment and declining sales many competitors in our industry are experiencing due to pressure on marketing budgets. Rather than contracting, we are growing and capturing additional market share within the $25 billion promotional products industry. We expect this trend to continue as we further refine and expand our outreach as well as leverage established relationships from our acquisitions.”

“Each of our recent acquisitions brings strategic advantages, opening up new markets and new verticals to support our growth strategies. We are proud to have closed our acquisition of T R Miller in June, our largest acquisition to date, and progressing towards full integration of the business. Premier NYC, Trend Brand Solutions, and G.A.P. Promotions’ businesses are now all fully integrated into the Stran business operations. While our primary focus now is on organic growth, we continue to identify potential acquisitions that expand our product offering and geographic footprint given our successful track record of acquiring and integrating companies within our organization. The fact that we have expanded our national reach, secured new customers, and entered into new verticals is a testament to our leadership status within the industry. Towards this end, we were recently acknowledged by the Advertising Specialty Institute, ranking us among the Top 40 distributors in the industry.”

“While expenses have increased in the second quarter as a result of integration costs and onboarding personnel from the T R Miller acquisition, we are carefully monitoring expenses and expect to realize synergies from the integration of all of our acquisitions. Given our continued revenue growth and traction within the industry, we look forward to leveraging our fixed costs to drive margin expansion and long-term profitability. At the same time, we have maintained a solid balance sheet with approximately $25.5 million in cash and investments, allowing us to accelerate our marketing activities and pursue additional business opportunities that would complement and enhance our operations.”

Financial Results

Revenue increased 18.0% to approximately $17.5 million for the three months ended June 30, 2023 from approximately $14.8 million for the three months ended June 30, 2022. The increase was primarily due to higher spending from existing customers as well as business from new customers. Additionally, the Company benefited from the acquisitions of the assets of G.A.P. Promotions, LLC (“G.A.P. Promotions”) in January 2022, the assets of Trend Promotional Marketing Corporation (d/b/a Trend Brand Solutions) (“Trend Brand Solutions”) in August 2022, the assets of Premier Business Services (“Premier NYC”) in December 2022, and the assets of T R Miller Co., Inc. (“T R Miller”) in June 2023.

Gross profit increased 35.0% to approximately $5.1 million, or 29.1% of revenue, for the three months ended June 30, 2023, from approximately $3.8 million, or 25.4% of revenue, for the three months ended June 30, 2022. The increase in the dollar amount of gross profit was due to increased sales, partially offset by an increase in purchasing costs.

Net loss for the three months ended June 30, 2023 was approximately $0.8 million, compared to a net loss of approximately $0.4 million for the three months ended June 30, 2022. This change was primarily due to an increase in operating expenses and an increase in purchasing costs. These factors were partially offset by the increase in sales during the three months ended June 30, 2023 from the acquisition of the assets of each of G.A.P. Promotions, Trend Brand Solutions, Premier NYC, and T R Miller, and the increase of recurring organic sales during the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

Conference Call

The Company will host a conference call at 10:00 A.M. Eastern Time today to discuss the Company’s financial results for the second quarter of 2023 ended June 30, 2023, as well as the Company’s corporate progress and other developments.

The conference call will be available via telephone by dialing toll free 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and using entry code: 227668. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2855/48888 or on the Company’s Investors section of the website: ir.stran.com/news-events/ir-calendar.

A webcast replay will be available on the Company’s Investors section of the website (ir.stran.com/news-events/ir-calendar) through August 14, 2024. A telephone replay of the call will be available approximately one hour following the call, through August 28, 2023, and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering conference ID: 48888.

About Stran

Over the past 27 years, Stran has grown to become a leader in the promotional products industry, specializing in complex marketing programs to help recognize the value of promotional products, branded merchandise, and loyalty incentive programs as a tool to drive awareness, build brands and impact sales. Stran is the chosen promotional programs manager of many Fortune 500 companies, across a variety of industries, to execute their promotional marketing, loyalty and incentive, sponsorship activation, recruitment, retention, and wellness campaigns. Stran provides world-class customer service and utilizes cutting-edge technology, including efficient ordering and logistics technology to provide order processing, warehousing and fulfillment functions. The Company’s mission is to develop long-term relationships with its clients, enabling them to connect with both their customers and employees in order to build lasting brand loyalty. Additional information about the Company is available at: www.stran.com.

Forward Looking Statements

This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” "will” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” in the Company’s periodic reports which are filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Contacts:

Investor Relations Contact:
Crescendo Communications, LLC
Tel: (212) 671-1021
SWAG@crescendo-ir.com

Press Contact:
Howie Turkenkopf
press@stran.com

BALANCE SHEETS
		June 30,				December 31,
		2023				2022
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	15,271,199			$	15,253,756
Investments			10,277,690				9,779,355
Accounts Receivable, Net			13,958,984				14,442,626
Deferred Income Taxes			1,542,000				841,000
Inventory			5,820,887				6,867,564
Prepaid Corporate Taxes			87,459				87,459
Prepaid Expenses			695,711				386,884
Deposits			1,976,439				910,486
			49,630,369				48,569,130
PROPERTY AND EQUIPMENT, NET:			1,294,568				1,000,090
OTHER ASSETS:
Intangible Assets - Customer Lists, Net			10,711,939				6,272,205
Right of Use Asset - Office Leases			1,470,140				784,683
			12,182,079				7,056,888
		$	63,107,016			$	56,626,108
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES:
Current Portion of Contingent Earn-Out Liabilities		$	3,186,825			$	1,809,874
Current Portion of Lease Liability			676,036				324,594
Accounts Payable and Accrued Expenses			3,012,379				4,051,657
Accrued Payroll and Related			997,008				608,589
Unearned Revenue			2,290,639				633,148
Rewards Program Liability			8,875,000				6,000,000
Sales Tax Payable			291,438				365,303
Note Payable - Wildman			162,358				162,358
			19,491,683				13,955,523
LONG-TERM LIABILITIES:
Long-Term Contingent Earn-Out Liabilities			4,883,265				2,845,944
Long-Term Lease Liability			762,946				460,089
			5,646,211				3,306,033
STOCKHOLDERS’ EQUITY:
Common Stock, $.0001 Par Value; 300,000,000 Shares Authorized, 18,540,834 and 18,475,521 Shares Issued and Outstanding as of June 30, 2023 and December 31, 2022, respectively			1,855				1,848
Additional Paid-In Capital			38,416,582				38,279,151
Retained Earnings			(449,315	)			1,083,553
			37,969,122				39,364,552
		$	63,107,016			$	56,626,108

STATEMENTS OF EARNINGS (LOSS) AND RETAINED EARNINGS THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (UNAUDITED)
		Three Months Ended June 30, 2023				Three Months Ended June 30, 2022				Six Months Ended June 30, 2023				Six Months Ended June 30, 2022
SALES		$	17,470,106			$	14,806,904			$	33,246,353			$	27,066,487
COST OF SALES:
Purchases			10,810,268				9,497,551				20,833,814				17,454,167
Freight			1,582,917				1,549,163				2,641,665				2,633,965
			12,393,185				11,046,714				23,475,479				20,088,132
GROSS PROFIT			5,076,921				3,760,190				9,770,874				6,978,355
OPERATING EXPENSES:
General and Administrative Expenses			6,351,174				4,232,170				12,430,269				8,256,388
			6,351,174				4,232,170				12,430,269				8,256,388
EARNINGS (LOSS) FROM OPERATIONS			(1,274,253	)			(471,980	)			(2,659,395	)			(1,278,033	)
OTHER INCOME AND (EXPENSE):
Other Income (Expense)			15,092				(23,781	)			71,729				(27,461	)
Interest Income (Expense)			146,177				6,108				284,259				92,972
Unrealized Gain (Loss) on Investments			(33,303	)			-				98,582				-
			127,966				(17,673	)			454,570				65,511
EARNINGS (LOSS) BEFORE INCOME TAXES			(1,146,287	)			(489,653	)			(2,204,825	)			(1,212,522	)
PROVISION FOR INCOME TAXES			(307,957	)			(42,210	)			(671,957	)			(219,265	)
NET EARNINGS (LOSS)			(838,330	)			(447,443	)			(1,532,868	)			(993,257	)
NET EARNINGS (LOSS) PER COMMON SHARE
Basic and Diluted		$	(0.05	)		$	(0.02	)		$	(0.08	)		$	(0.03	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
Basic and Diluted			18,540,834				19,971,552				18,540,834				19,971,552

FAQ

What was Stran & Company's revenue for Q2 2023?

Stran & Company reported revenue of $17.5 million for Q2 2023.

What was the increase in organic sales for Stran & Company?

Organic sales for Stran & Company increased by 11%.

What was the gross profit margin for Stran & Company?

The gross profit margin for Stran & Company improved to 29.1%.