Stran & Company Reports Financial Results for Three Months Ended March 31, 2024 and Three and Six Months Ended June 30, 2024
QUINCY, Mass., Feb. 11, 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, today provided a business update and reported financial results for the three months ended March 31, 2024 and the three and six months ended June 30, 2024.
Andy Shape, President and CEO of Stran, commented, “With the restatement of our 2023 and 2022 financial statements completed, we were able to focus our attention and successfully finalize our 2024 first and second quarter filings. We experienced a 17.9% increase in revenue to approximately $18.8 million for the first quarter of 2024 compared to the first quarter of 2023 and a 6.4% increase in revenue to approximately $35.5 million for the six months ended June 30, 2024 when compared to the same period in 2023, demonstrating our continued ability to execute on our growth strategy in 2024. Additionally, we maintained a strong cash position, with approximately $21.5 million in cash, equivalents, and investments as of June 30, 2024.”
“We believe our strong results reflect our continued market penetration, securing and expanding contracts with leading brands that showcase our ability to meet the diverse needs of our customers. To further strengthen our position, we acquired strategic assets from Gander Group, enhancing our technology, product offerings, and services while supporting our long-term growth strategy. Our focus remains on accelerating growth, expanding our customer base, and strengthening our market position. We are confident in our ability to execute our strategy, and sustain long-term growth, positioning us for continued success in the years ahead.”
“Stran is poised for an exciting 2025 as we continue our growth trajectory and seek market expansion. We expect to host a detailed conference call with shareholders following the filing of Stran’s third quarter 2024 financial results.”
Financial Results
First Quarter 2024 Results
Sales increased 17.9% to approximately $18.8 million for the three months ended March 31, 2024, from approximately $16.0 million for the three months ended March 31, 2023. The increase was primarily due to higher spending from existing clients as well as business from new customers. Additionally, the Company benefited from the acquisition of the assets of T R Miller Co., Inc. (“T R Miller”) in June 2023.
Gross profit increased 3.8% to approximately $5.6 million, or 29.8% of sales, for the three months ended March 31, 2024, from approximately $5.4 million, or 33.9% of sales, for the three months ended March 31, 2023. The increase in the dollar amount of gross profit was due to an increase in sales, partially offset by an increase in cost of sales. The decrease in gross profit margin to 29.8% for the three months ended March 31, 2024 compared to 33.9% for the three months ended March 31, 2023 was primarily due to increases in product costs from vendors.
Net loss for the three months ended March 31, 2024 was approximately $0.5 million, compared to approximately $0.5 million for the three months ended March 31, 2023. These results were primarily due to the increase in sales for the three months ended March 31, 2024 from the acquisition of the assets of T R Miller to approximately $2.0 million from $0 for the three months ended March 31, 2023, and the increase of approximately $1.2 million from recurring organic sales for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. These factors were offset by an increase in operating expenses and an increase in cost of sales.
Second Quarter 2024 Results
Sales decreased 4.1% to approximately $16.7 million for the three months ended June 30, 2024, from approximately $17.3 million for the three months ended June 30, 2023. The decrease was primarily due to lower spending from new and existing clients, partially offset from the acquisition of the assets of T R Miller in June 2023.
Gross profit increased 4.2% to approximately $5.5 million, or 32.8% of sales, for the three months ended June 30, 2024, from approximately $5.2 million, or 30.1% of sales, for the three months ended June 30, 2023. The increase in the dollar amount of gross profit was due to a decrease in cost of sales of approximately $0.9 million, which was offset by a decrease in sales of approximately $0.7 million. The increase in gross profit margin to 32.8% for the three months ended June 30, 2024 compared to 30.1% for the three months ended June 30, 2023 was primarily due to improvements in purchasing from suppliers.
Net loss for the three months ended June 30, 2024 was approximately $1.0 million, compared to approximately $0.9 million for the three months ended June 30, 2023. This change was primarily due to the increase in operating expenses, partially offset by the increase in gross profit.
Six Months Ended June 30, 2024 Results
Sales increased 6.4% to approximately $35.5 million for the six months ended June 30, 2024, from approximately $33.4 million for the six months ended June 30, 2023. The increase was primarily due to higher spending from existing clients as well as business from new customers.
Our gross profit increased 4.0% to approximately $11.1 million, or 31.2% of sales, for the six months ended June 30, 2024, from approximately $10.7 million, or 31.9% of sales, for the six months ended June 30, 2023. The increase in the dollar amount of gross profit was due to an increase in sales of approximately $2.1 million, partially offset by an increase in cost of sales of approximately $1.7 million in aggregate. The decrease in gross profit margin to 31.2% for the six months ended June 30, 2024 compared to 31.9% for the six months ended June 30, 2023 was primarily due to increases in product costs from vendors during the three months ended March 31, 2024, partially offset by improvements in purchasing from vendors in the three months ended June 30, 2024.
Net loss for the six months ended June 30, 2024 was approximately $1.5 million, compared to approximately $1.4 million for the six months ended June 30, 2023. This change was primarily due to an increase in costs of sales and general and administrative expenses, partially offset by an increase in sales.
About Stran
For over 30 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 (in thousands, except share and per share amounts) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 9,486 | $ | 8,059 | ||||
| Investments | 10,710 | 10,393 | ||||||
| Accounts receivable, net | 14,209 | 16,223 | ||||||
| Accounts receivable - related parties | 878 | 853 | ||||||
| Inventory | 4,231 | 4,782 | ||||||
| Prepaid corporate taxes | — | 62 | ||||||
| Prepaid expenses | 948 | 953 | ||||||
| Deposits | 1,578 | 1,717 | ||||||
| Total current assets | 42,040 | 43,042 | ||||||
| Property and equipment, net | 1,664 | 1,521 | ||||||
| OTHER ASSETS: | ||||||||
| Intangible assets - customer lists, net | 3,029 | 3,114 | ||||||
| Other assets | 23 | 23 | ||||||
| Right of use asset - office leases | 1,192 | 1,336 | ||||||
| Total other assets | 4,244 | 4,473 | ||||||
| Total assets | $ | 47,948 | $ | 49,036 | ||||
| LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | 3,347 | $ | 4,745 | ||||
| Accrued payroll and related | 1,710 | 2,568 | ||||||
| Unearned revenue | 592 | 1,116 | ||||||
| Rewards program liability | 2,850 | 875 | ||||||
| Sales tax payable | 595 | 344 | ||||||
| Current portion of contingent earn-out liabilities | 224 | 224 | ||||||
| Current portion of installment payment liabilities | 781 | 786 | ||||||
| Current portion of lease liability | 540 | 528 | ||||||
| Total current liabilities | 10,639 | 11,186 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term contingent earn-out liabilities | 763 | 763 | ||||||
| Long-term installment payment liabilities | 639 | 639 | ||||||
| Long-term lease liability | 661 | 798 | ||||||
| Total long-term liabilities | 2,063 | 2,200 | ||||||
| Total liabilities | 12,702 | 13,386 | ||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDER’S EQUITY: | ||||||||
| Preferred stock, $0.0001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | — | — | ||||||
| Common stock, $0.0001 par value; 300,000,000 shares authorized, 18,589,086 and 18,539,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 2 | 2 | ||||||
| Additional paid-in capital | 38,413 | 38,263 | ||||||
| Accumulated deficit | (3,089 | ) | (2,602 | ) | ||||
| Accumulated other comprehensive loss | (80 | ) | (13 | ) | ||||
| Total stockholders’ equity | 35,246 | 35,650 | ||||||
| Total liabilities and stockholders’ equity | $ | 47,948 | $ | 49,036 |
| STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands, except share and per share amounts) | ||||||||
| 2024 | 2023 | |||||||
| (Restated) | ||||||||
| SALES | ||||||||
| Sales | $ | 18,781 | $ | 15,971 | ||||
| Sales – related parties | 46 | — | ||||||
| Total sales | 18,827 | 15,971 | ||||||
| COST OF SALES: | ||||||||
| Cost of sales | 13,178 | 10,562 | ||||||
| Cost of sales - related parties | 35 | — | ||||||
| Total cost of sales | 13,213 | 10,562 | ||||||
| GROSS PROFIT | 5,614 | 5,409 | ||||||
| OPERATING EXPENSES: | ||||||||
| General and administrative expenses | 6,279 | 5,991 | ||||||
| Total operating expenses | 6,279 | 5,991 | ||||||
| LOSS FROM OPERATIONS | (665 | ) | (582 | ) | ||||
| OTHER INCOME: | ||||||||
| Other income | 15 | — | ||||||
| Interest income | 93 | 138 | ||||||
| Realized gain on investments | 70 | 12 | ||||||
| Total other income | 178 | 150 | ||||||
| LOSS BEFORE INCOME TAXES | (487 | ) | (432 | ) | ||||
| Provision for income taxes | — | 52 | ||||||
| NET LOSS | $ | (487 | ) | $ | (484 | ) | ||
| NET LOSS PER COMMON SHARE | ||||||||
| Basic | $ | (0.03 | ) | $ | (0.03 | ) | ||
| Diluted | $ | (0.03 | ) | $ | (0.03 | ) | ||
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||
| Basic | 18,574,748 | 18,477,419 | ||||||
| Diluted | 18,574,748 | 18,477,419 |
| BALANCE SHEETS (in thousands, except share and per share amounts) | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 11,874 | $ | 8,059 | ||||
| Investments | 9,603 | 10,393 | ||||||
| Accounts receivable, net | 12,015 | 16,223 | ||||||
| Accounts receivable - related parties | 828 | 853 | ||||||
| Inventory | 3,974 | 4,782 | ||||||
| Prepaid corporate taxes | 32 | 62 | ||||||
| Prepaid expenses | 617 | 953 | ||||||
| Deposits | 1,910 | 1,717 | ||||||
| Total current assets | 40,853 | 43,042 | ||||||
| Property and equipment, net | 1,715 | 1,521 | ||||||
| OTHER ASSETS: | ||||||||
| Intangible assets - customer lists, net | 2,943 | 3,114 | ||||||
| Other assets | 23 | 23 | ||||||
| Right of use asset - office leases | 1,061 | 1,336 | ||||||
| Total other assets | 4,027 | 4,473 | ||||||
| Total assets | $ | 46,595 | $ | 49,036 | ||||
| LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | 3,875 | $ | 4,745 | ||||
| Accrued payroll and related | 1,211 | 2,568 | ||||||
| Unearned revenue | 854 | 1,116 | ||||||
| Rewards program liability | 3,350 | 875 | ||||||
| Sales tax payable | 227 | 344 | ||||||
| Current portion of contingent earn-out liabilities | 224 | 224 | ||||||
| Current portion of installment payment liabilities | 398 | 786 | ||||||
| Current portion of lease liability | 519 | 528 | ||||||
| Total current liabilities | 10,658 | 11,186 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term contingent earn-out liabilities | 763 | 763 | ||||||
| Long-term installment payment liabilities | 339 | 639 | ||||||
| Long-term lease liability | 550 | 798 | ||||||
| Total long-term liabilities | 1,652 | 2,200 | ||||||
| Total liabilities | 12,310 | 13,386 | ||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDER’S EQUITY: | ||||||||
| Preferred stock, $0.0001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | — | — | ||||||
| Common stock, $0.0001 par value; 300,000,000 shares authorized, 18,589,086 and 18,539,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 2 | 2 | ||||||
| Additional paid-in capital | 38,433 | 38,263 | ||||||
| Accumulated deficit | (4,118 | ) | (2,602 | ) | ||||
| Accumulated other comprehensive loss | (32 | ) | (13 | ) | ||||
| Total stockholders’ equity | 34,285 | 35,650 | ||||||
| Total liabilities and stockholders’ equity | $ | 46,595 | $ | 49,036 |
| STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (in thousands, except share and per share amounts) | ||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Restated) | (Restated) | |||||||||||||||
| SALES | ||||||||||||||||
| Sales | $ | 16,693 | $ | 17,285 | $ | 35,474 | $ | 33,256 | ||||||||
| Sales – related parties | — | 130 | 46 | 130 | ||||||||||||
| Total sales | 16,693 | 17,415 | 35,520 | 33,386 | ||||||||||||
| COST OF SALES: | ||||||||||||||||
| Cost of sales | 11,226 | 12,067 | 24,405 | 22,629 | ||||||||||||
| Cost of sales - related parties | — | 100 | 35 | 100 | ||||||||||||
| Total cost of sales | 11,226 | 12,167 | 24,440 | 22,729 | ||||||||||||
| GROSS PROFIT | 5,467 | 5,248 | 11,080 | 10,657 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| General and administrative expenses | 6,575 | 6,245 | 12,857 | 12,236 | ||||||||||||
| Total operating expenses | 6,575 | 6,245 | 12,857 | 12,236 | ||||||||||||
| LOSS FROM OPERATIONS | (1,108 | ) | (997 | ) | (1,777 | ) | (1,579 | ) | ||||||||
| OTHER INCOME: | ||||||||||||||||
| Other income | 1 | 17 | 16 | 17 | ||||||||||||
| Interest income | 82 | 146 | 175 | 284 | ||||||||||||
| Realized gain on investments | 3 | 9 | 73 | 21 | ||||||||||||
| Total other income | 86 | 172 | 264 | 322 | ||||||||||||
| LOSS BEFORE INCOME TAXES | (1,022 | ) | (825 | ) | (1,513 | ) | (1,257 | ) | ||||||||
| Provision for income taxes | 3 | 99 | 3 | 151 | ||||||||||||
| NET LOSS | $ | (1,025 | ) | $ | (924 | ) | $ | (1,516 | ) | $ | (1,408 | ) | ||||
| NET LOSS PER COMMON SHARE | ||||||||||||||||
| Basic | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.08 | ) | ||||
| Diluted | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.08 | ) | ||||
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
| Basic | 18,589,086 | 18,532,342 | 18,581,957 | 18,504,761 | ||||||||||||
| Diluted | 18,589,086 | 18,532,342 | 18,581,957 | 18,504,761 |
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