Quincy, MA, May 29, 2025 (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, is proud to announce it has achieved the #12 ranking on the 2025 PPAI 100 list of top promotional product distributors, as recognized by the Promotional Products Association International (PPAI). This prestigious ranking, a significant jump of eight spots from th ...

Stran & Company (SWAG) Q1 2025 Earnings Call May 16, 2025 10:00 AM ET Company Participants Alexandra Schilt - Vice PresidentAndy Shape - Co-Founder, President & CEODavid Browner - Chief Financial OfficerRukun Duggal - Investment Partners Conference Call Participants None - Analyst Operator Greetings. Welcome to the Strand and Company First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Ple ...

Financial Data and Key Metrics Changes - For Q1 2025, the company achieved a 52.4% year-over-year revenue increase, reaching approximately $28.7 million, up from $18.8 million in Q1 2024 [4][12] - Gross profit rose 51.1% to $8.5 million, representing 29.6% of sales, compared to $5.6 million or 29.8% of sales in Q1 2024 [5][13] - The net loss for Q1 2025 was approximately $400,000, an improvement from a loss of $500,000 in Q1 2024 [17] Business Line Data and Key Metrics Changes - The core Strand segment saw an 11.2% organic revenue growth, with sales increasing to approximately $20.9 million for Q1 2025 from $18.8 million in Q1 2024 [12][13] - The SLS segment, which includes the former Gander Group business, generated approximately $7.8 million in sales for Q1 2025, up from zero in Q1 2024 due to the acquisition [12][14] - Gross profit margin for the Strand segment increased to 32.4% in Q1 2025 from 29.8% in Q1 2024, while the SLS segment had a gross profit margin of 21.8% [14] Market Data and Key Metrics Changes - The company is expanding its global manufacturing footprint to mitigate tariff uncertainties, including partnerships in Vietnam, Cambodia, Taiwan, India, and Bangladesh [9] - The company is addressing global trade dynamics and tariff risks, which have been fluctuating significantly [10][36] Company Strategy and Development Direction - The company aims to accelerate organic growth, expand margins, and drive sustained profitability in 2025 [9][20] - The integration of Gander Group assets is expected to enhance customer services and create new revenue channels [7][10] - The successful launch of the NetSuite ERP system is enhancing operational efficiency and scalability [6][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustained growth and operational excellence in 2025 [10][20] - The company is proactively managing tariff risks and maintaining strong relationships with customers and vendors [36][40] Other Important Information - The company ended Q1 2025 with approximately $12.2 million in cash and no long-term debt, reflecting a strong liquidity position [18] - Operating expenses increased 43.6% to approximately $9 million, but as a percentage of sales, they decreased to 31.4% [15][16] Q&A Session Summary Question: Will accounting and compliance costs decrease in 2025? - Management indicated that significant expenses related to the re-audit process should decrease in 2025, with Q1 costs around $800,000 [22][23][24] Question: Are there plans to restart a share buyback? - Management confirmed plans to reestablish a share buyback program, with approximately $6 million remaining from an initial $10 million authorization [25] Question: Can you explain the drop in cash related to the rewards program? - The drop in cash was attributed to the execution of a loyalty rewards program, where $5 million worth of prepaid debit cards were issued [26][27] Question: Will the company report ongoing versus one-time expenses? - Management confirmed plans to report adjusted EBITDA that separates ongoing public expenses from one-time costs related to audits and acquisitions [32][33] Question: Is the increase in inventory related to tariffs? - Management clarified that the increase in inventory is a natural business cadence, with most inventory purchased on behalf of customers [34][36]

Financial Performance - Sales increased 8.8% to approximately $82.7 million for the fiscal year ended December 31, 2024, compared to approximately $76.0 million for 2023[7]. - Net loss for the year ended December 31, 2024, was approximately $4.1 million, compared to a net loss of approximately $0.4 million for 2023[10]. - Basic and diluted net loss per common share was $(0.22) in 2024, compared to $(0.02) in 2023[21]. - Loss from operations widened to $(4,894) million in 2024, compared to $(1,268) million in 2023[21]. - Other income decreased to $759 million in 2024, down from $924 million in 2023, a decline of 17.9%[21]. Gross Profit and Margins - Gross profit for 2024 was approximately $25.8 million, representing a gross margin of 31.2%, down from 32.7% in 2023[8]. - Gross profit for the Stran segment decreased to approximately $23.7 million in 2024 from approximately $24.9 million in 2023, while the SLS segment saw an increase to approximately $2.1 million[8]. - Gross profit rose to $25,813 million in 2024, compared to $24,852 million in 2023, reflecting a growth of 3.9%[21]. Operating Expenses - Operating expenses rose 17.6% to approximately $30.7 million for 2024, leading to an increase in the operating expense ratio to 37.2% from 34.4% in 2023[9]. - Total operating expenses increased to $30,707 million in 2024, up from $26,120 million in 2023, marking a rise of 17.5%[21]. Assets and Cash Position - Cash, cash equivalents, and investments totaled $18.2 million as of December 31, 2024[6]. - Total assets increased to $55.148 million as of December 31, 2024, compared to $49.036 million in 2023[19]. Future Outlook - Stran expects to surpass $100 million in annual sales in 2025, driven by organic growth and expansion into high-value verticals[5]. - The company secured multiple new multi-year, six-figure contracts across various industries, indicating growing demand for its services[3]. Acquisitions and Contributions - The acquisition of Gander Group assets contributed approximately $9.9 million in sales within a few months, significantly expanding Stran's presence in the hospitality and entertainment sectors[2]. Cost of Sales - Total cost of sales increased to $56,841 million in 2024, up from $51,148 million in 2023, an increase of 11.5%[21]. Share Information - Weighted-average common shares outstanding increased to 18,587,607 in 2024 from 18,519,892 in 2023[21]. Goodwill Impairment - The company recorded a goodwill impairment of $810 million in 2023, which was not present in 2024[21].

Core Viewpoint - Stran & Company, Inc. reported strong financial results for Q1 2025, with significant revenue and gross profit growth, driven by both organic growth and the acquisition of Gander Group assets [2][3][4]. Financial Performance - Revenue increased by 52.4% year-over-year to approximately $28.7 million for Q1 2025, up from approximately $18.8 million in Q1 2024 [3]. - Gross profit rose by 51.1% to approximately $8.5 million, representing 29.6% of sales, compared to approximately $5.6 million or 29.8% of sales in the prior year [4][5]. - The Stran segment's sales increased to approximately $20.9 million, while the SLS segment, resulting from the Gander Group acquisition, generated approximately $7.8 million in sales [3]. Operational Highlights - The company achieved organic revenue growth of 11.2%, indicating resilience in a challenging market [2]. - The implementation of the NetSuite ERP system in January 2025 has improved automation, visibility, and process control, enhancing operational efficiency [2]. - Operating expenses increased by 43.6% to approximately $9.0 million, but as a percentage of sales, they decreased to 31.4% from 33.4% year-over-year [6]. Profitability and Loss - The net loss for Q1 2025 was approximately $0.4 million, a slight improvement from a net loss of approximately $0.5 million in Q1 2024, primarily due to increased gross profit [7]. Future Outlook - The company is focused on executing its strategy to enhance operational efficiency and expand margins while maintaining a strong balance sheet with approximately $12.2 million in cash and equivalents [2].

Financial Performance - Sales for the three months ended March 31, 2025, increased by 52.4% to $28.694 million compared to $18.781 million for the same period in 2024[130] - Gross profit for the three months ended March 31, 2025, was $8.482 million, representing 29.6% of total sales, compared to $5.614 million or 29.8% in 2024[138] - Total operating expenses increased to $9.017 million, accounting for 31.4% of total sales, compared to $6.279 million or 33.4% in 2024[138] - The net loss for the three months ended March 31, 2025, was $393,000, or 1.4% of total sales, compared to a net loss of $487,000, or 2.6% in 2024[138] - Total sales increased by 52.4% to approximately $28.7 million for the three months ended March 31, 2025, compared to approximately $18.8 million for the same period in 2024[140] - Cost of sales rose by 53.0% to approximately $20.2 million for the three months ended March 31, 2025, from approximately $13.2 million for the same period in 2024[141] - Gross profit increased by 51.1% to approximately $8.5 million, representing 29.6% of sales for the three months ended March 31, 2025, compared to approximately $5.6 million, or 29.8% of sales, for the same period in 2024[143] - Operating expenses increased by 43.6% to approximately $9.0 million for the three months ended March 31, 2025, from approximately $6.3 million for the same period in 2024[144] - Net loss for the three months ended March 31, 2025, was approximately $0.4 million, compared to approximately $0.5 million for the same period in 2024[149] Revenue Sources - Program clients accounted for 83.8% of total revenue for the three months ended March 31, 2025, down from 86.0% in the same period of 2024[128] - The majority of revenue is derived from program business, with fewer than 350 of over 2,000 active customers classified as program clients[128] - The increase in sales for the Stran segment was primarily due to higher spending from existing clients and new customers[140] - The SLS segment's sales increase was attributed to the acquisition of the Gander Group Assets in August 2024[140] Assets and Equity - As of March 31, 2025, total assets were approximately $52.2 million, with total stockholders' equity of approximately $31.3 million[131] - Cash and cash equivalents as of March 31, 2025, were approximately $4.2 million, down from $9.5 million at the end of March 2024[150] - The Company had net deposits from reward card programs totaling approximately $0.9 million as of March 31, 2025[178] Operating Challenges - The company is facing challenges due to U.S. tariffs, particularly a reduction of tariffs on imports from China from 145% to 30% for 90 days, which may impact pricing and customer retention[129] Financing and Credit - The Revolving Line of Credit was capped at $7.0 million or 80% of Eligible Accounts plus 50% of Eligible Inventory, with a maximum of $2.0 million for advances based on Eligible Inventory[157] - The interest rate on the Revolving Line of Credit was set at the prime rate plus 0.5% per annum, with late payments incurring a 5.0% charge and a 10.0% increase in interest rate upon default[158][159] - The Company was required to maintain a minimum net worth of $2.0 million by December 31, 2021, increasing to $3.5 million by December 31, 2023[163] - As of the Termination Date on August 26, 2024, the Company had no funds drawn on the Revolving Line of Credit, which was subsequently terminated[168][169] - The Company acquired Gander Group assets for approximately $1.1 million in cash and assumed liabilities totaling approximately $5.5 million[171] - The Company must maintain a minimum liquidity of $7.5 million at all times, defined as cash and short-term investments[165] - The Company is required to maintain a "Minimum Interest Coverage" of 1.25:1 for the fiscal year ending December 31, 2024[165] Lease Obligations - The new office lease in North Quincy, Massachusetts, starting June 1, 2025, has an initial base rent of approximately $21,000 per month with annual escalations of 2.2% to 2.5%[175] - Future minimum lease payments total approximately $1.31 million, with $398,000 due in the remainder of 2025[177] Goodwill and Asset Impairment - The company conducts an annual impairment review of goodwill in the fourth fiscal quarter, assessing qualitative factors to determine potential impairment[182] - The impairment test for goodwill utilizes both the income approach and market approach, relying on significant estimates and assumptions regarding future financial performance[183] - Long-lived assets are assessed for impairment whenever events indicate that their carrying value may not be recoverable, considering factors such as significant underperformance and negative industry trends[184] - The fair value estimation for long-lived assets requires assumptions about future business prospects and market demand, which are subjective and complex[184] - Changes in assumptions and estimates regarding goodwill and long-lived assets could materially impact the company's reported financial results[184] - The company emphasizes the importance of judgment in evaluating impairment of both goodwill and long-lived assets, highlighting the subjective nature of these assessments[184] - The company’s carrying value for reporting units excludes certain corporate assets and liabilities, such as cash and debt, during fair value assessments[183] - The impairment review process is triggered by various factors, including significant changes in asset usage or overall business strategy[184] - The company’s financial statements include significant accounting policies and estimates that impact the valuation of goodwill and intangible assets[181] Compliance and Accounting Standards - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to rely on certain exemptions from disclosure requirements[132] - Recent accounting pronouncements are discussed in Note A.18 of the financial statements, indicating ongoing compliance with new accounting standards[185]

Core Viewpoint - Stran & Company, Inc. will host a conference call on May 16, 2025, to discuss its financial results for Q1 2025 and corporate developments [1] Group 1: Conference Call Details - The conference call is scheduled for 10:00 A.M. Eastern Time on May 16, 2025 [1] - U.S. callers can dial toll-free 877-545-0320, while international callers can use +1 973-528-0002 with entry code 770173 [2] - A webcast of the call will be available on the company's Investor Relations website [2] Group 2: Replay Information - A replay of the webcast will be accessible through May 16, 2026, on the Investor Relations section of the website [3] - Telephone replay will be available approximately one hour after the call until May 30, 2025, with specific dialing instructions for U.S. and international callers [3] Group 3: Company Overview - Stran has over 30 years of experience in the promotional products industry, focusing on complex marketing programs [4] - The company serves many Fortune 500 clients across various industries, managing promotional marketing and loyalty programs [4] - Stran aims to build long-term relationships with clients to enhance brand loyalty through effective promotional strategies [4]

Financial Data and Key Metrics Changes - The company reported revenues of approximately $82.7 million for the year ended December 31, 2024, representing an 8.8% year-over-year increase from approximately $76 million for the year ended December 31, 2023 [9][30] - Gross profit increased by 3.9% to approximately $25.8 million, achieving a gross margin of 31.2%, down from 32.7% in the previous year [10][34] - The net loss for the year was approximately $4.1 million, compared to a net loss of approximately $0.4 million for the year ended December 31, 2023 [37] Business Line Data and Key Metrics Changes - Sales from the Strand segment decreased to approximately $72.7 million for the year ended December 31, 2024, from approximately $76 million in the previous year, primarily due to lower spending from clients [30] - Sales from the Strand Loyalty Solutions (SLS) segment increased to approximately $9.9 million, up from zero in the previous year, driven by the acquisition of Gander Group assets [30][31] - Gross profit for the SLS segment was approximately $2.1 million, reflecting the contribution from the Gander acquisition [33] Market Data and Key Metrics Changes - The company secured multiple six-figure multi-year contracts across various sectors, including residential real estate, diagnostics, public transportation, and premium consumer products, indicating a diversified client base [12][16] - The company is focusing on expanding into high-potential verticals such as hospitality, healthcare, infrastructure, and gaming [20] Company Strategy and Development Direction - The company aims to accelerate growth across both STRON and SLS segments by executing a robust enterprise sales pipeline and broadening its customer base [20][22] - The strategic roadmap includes leveraging technology, particularly the NetSuite ERP system, to enhance operational efficiency and improve fulfillment performance [22][17] - The company plans to optimize operating expenses with a focus on sustainable margin-accretive growth [22] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the complex macroeconomic environment, including inflationary pressures and global trade disruptions, but expressed confidence in the company's ability to navigate these challenges [23][24] - The company maintains a strong cash position, zero long-term debt, and a scalable operating model, which provides resilience [24][40] - Management views 2025 as a pivotal year for the company, transitioning from foundational investments to strategic acceleration [28][41] Other Important Information - The company completed a comprehensive re-audit of its historical financials due to the previous audit firm's barring by the SEC, which has strengthened its financial reporting infrastructure [6][8] - The company has approximately $18.2 million in cash and cash equivalents as of December 31, 2024, with plans to resume its $10 million share repurchase program in 2025 [37][27] Q&A Session Summary Question: Can you provide some light on your goals for profitability this year coming forward? - Management highlighted that audit fees will decrease significantly as they move away from the re-audit process, allowing more focus on operational business and profitability growth [46][48] - Goals include continuing revenue growth while driving operational efficiencies and finalizing the implementation of NetSuite to create efficiencies and reduce manual work [51][52]

Financial Data and Key Metrics Changes - The company reported revenues of approximately $82.7 million for the year ended December 31, 2024, representing an 8.8% year-over-year increase from approximately $76 million for the year ended December 31, 2023 [9][30] - Gross profit increased by 3.9% to approximately $25.8 million, achieving a gross margin of 31.2%, down from 32.7% in the previous year [10][32][34] - The net loss for the year was approximately $4.1 million, compared to a net loss of approximately $0.4 million for the year ended December 31, 2023 [37] Business Line Data and Key Metrics Changes - Sales from the Strand segment decreased to approximately $72.7 million for the year ended December 31, 2024, from approximately $76 million in the previous year, primarily due to lower spending from clients [30][31] - Sales from the Strand Loyalty Solutions (SLS) segment increased to approximately $9.9 million, up from zero in the previous year, driven by the acquisition of Gander Group assets [30][31] Market Data and Key Metrics Changes - The company secured multiple six-figure multi-year contracts across various sectors, including residential real estate, diagnostics, public transportation, and premium consumer products, indicating a diversified market presence [12][16] Company Strategy and Development Direction - The company aims to accelerate growth across both STRON and SLS segments by executing a robust enterprise sales pipeline and broadening its customer base in high-potential verticals such as hospitality, healthcare, infrastructure, and gaming [20][21] - The strategic roadmap for 2025 includes leveraging technology to enhance operational efficiency and optimizing operating expenses for sustainable margin growth [22][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex macroeconomic environment, including ongoing inflationary pressures and global trade disruptions, but expressed confidence in the company's ability to navigate these challenges due to its diversified client base and strong cash position [23][24] - The company plans to resume its share repurchase program in 2025, reflecting confidence in its long-term prospects [27][28] Other Important Information - The company completed a comprehensive re-audit of its historical financials, which reinforced the strength and reliability of its financial reporting infrastructure [8][39] - The implementation of the NetSuite ERP system is expected to drive operational excellence and efficiency moving forward [17][19] Q&A Session Summary Question: Can you provide some light on your goals for profitability this year coming forward? - Management highlighted that the fees associated with the audit will decrease significantly, allowing more focus on operational business and revenue growth, with goals to continue revenue growth while driving operational efficiencies [46][50] Question: How will the implementation of NetSuite impact operational efficiencies? - The implementation of NetSuite is expected to create efficiencies, automate processes, and reduce manual work, which will contribute to improved operational performance [51][52]

Financial Performance - Total sales increased by 8.8% to approximately $82.7 million for the year ended December 31, 2024, compared to approximately $76.0 million for the year ended December 31, 2023[260]. - Gross profit margin decreased to 31.2% in 2024 from 32.7% in 2023, with total cost of sales increasing by 11.1% to approximately $56.8 million[258][261]. - Total gross profit increased by 3.9% to approximately $25.8 million for the year ended December 31, 2024, compared to approximately $24.9 million for the year ended December 31, 2023[262]. - Net loss for the year ended December 31, 2024, was approximately $4.1 million, compared to approximately $0.4 million for the year ended December 31, 2023[269]. - Total operating expenses increased by 17.6% to approximately $30.7 million for the year ended December 31, 2024, from approximately $26.1 million for the year ended December 31, 2023[264]. Revenue Sources - Program clients accounted for 83.3% of total revenue in 2024, up from 81.4% in 2023, with fewer than 350 of over 2,000 active customers classified as program clients[249]. - The Stran segment's sales decreased by 4.3% to approximately $72.7 million in 2024, while the SLS segment (acquired Gander Group) generated approximately $9.9 million in sales[260]. - The acquisition of T R Miller in June 2023 and Gander Group Assets in August 2024 contributed to revenue growth[250]. Assets and Equity - The company had approximately $55.1 million in total assets and $31.6 million in total stockholders' equity as of December 31, 2024[250]. - Cash and cash equivalents as of December 31, 2024, were approximately $9.4 million, with investments of approximately $8.9 million[270]. - The Company had net deposits from reward card programs totaling approximately $6.0 million as of December 31, 2024, compared to $0.9 million as of December 31, 2023[297]. Operating Expenses and Liabilities - Operating expenses increased to 37.2% of revenues in 2024, up from 34.4% in 2023, leading to a loss from operations of $4.9 million[258]. - The Company had future non-cancelable minimum lease payments totaling $800,000, with $361,000 due in 2025[296]. - The Company was required to maintain a "Minimum Liquidity" of $7.5 million at all times, defined as cash and short-term investments, less rewards program liabilities[290]. Tax and Cash Flow - The income tax provision for the year ended December 31, 2024, was approximately $5 thousand, compared to approximately $41 thousand for the year ended December 31, 2023[267]. - The company anticipates that its effective tax rate will remain similar to the rate recorded in 2024[268]. - Net cash provided by operating activities was approximately $2.8 million for the year ended December 31, 2024, compared to net cash used in operating activities of approximately $2.6 million for the year ended December 31, 2023[274]. - Net cash used in investing activities decreased to approximately $0.5 million for the year ended December 31, 2024, from approximately $3.7 million for the year ended December 31, 2023[275]. Future Outlook and Strategic Plans - The company plans to continue leveraging technology and expanding its product offerings to enhance customer retention and acquisition[256]. - The company may require additional cash resources in the future due to changing business conditions or strategic investments[272]. - The Company was required to maintain a minimum net worth of $2,000,000 at December 31, 2021, $2,750,000 at December 31, 2022, and $3,500,000 at December 31, 2023[284]. - The Company could not incur additional indebtedness or make capital expenditures except in the ordinary course of business following the Loan Modification Agreement[285]. Lease and Credit Agreements - A seven-year lease agreement for new office space was signed on January 10, 2025, with an initial base rent of approximately $21,000 per month[251]. - As of December 31, 2024, the Revolving Line of Credit had been terminated, and no funds were drawn from it as of December 31, 2023[289]. Goodwill and Impairment - The Company performed an annual impairment review of goodwill during the fourth fiscal quarter of each year, which requires significant judgment[302].