STRN - Earnings call transcript Q2 2022

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Operator

Good morning, ladies and gentlemen. And welcome to the Stran & Company Second Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode. And the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to the host, Ally Schultz [ph], VP of Investor Relations.

Unidentified Company Representative

morning. Good for call. Company's you financial second Stran conference results joining thank XXXX & quarter And

call us Financial website. the XX, which and issued On is with press XXXX David Executive Shape, a on quarter Browner, Officer containing Chief also its Interim financial today, posted Chief release Officer. second company today The August are results Andy company's the

at please any additional The Communications If the like results operational about after months will XXXX. any management the provide XXX-XXX-XXXX. June three ended would questions remarks additional you contact the now company, have or call, information for reviewing the XX, Crescendo and company's prepared financial

get implement success. These this and based financial expected timing everyone we and uncertainties future Before we its like revenues of are and statements we that conference ability Stran's of business regarding to impact during future number risks Chief and plan, market assumptions respect to remind impossible judgments competitive may of started, and go statements to would call, make a involve on turn predict are that, the difficult will beyond control. we Andy. conditions decisions, Please Shape, business call With many economic, all accurately Stran's involving Andy and to which or future Executive now are Officer. which with to of ahead, over and forward-looking

Andy Shape

period XXXX. record a discuss Thank to illustrated growth you, of quarter Ally. to we increase progress $XX.X pleased revenue and our us we during results year. same And of million for financial the by trajectory as everyone second maintained thanks quarter the I'm compared to report today the last for second a XX.X% joining our that

a through And to numbers equivalents long-term as achieved XX.X% with these We proud revenue traction result success trend expansion industry. debt. footprint, no direct reinforcing organic and revenue million drivers growth that once platform. in We're of ongoing of maintain of key the year-over-year new apart cash of are we market. balance our verticals XX, acquisitions record June a our and strategy and $XX over our opportunistic XXXX others to sheet believe cash geographic increased entering activities continue business sets solid again Importantly, from existing is within this this believe and and for our our complement

consumer our in we As well strategy, roster G.A.P. part committed we as have display acquisition to of operations of as that expertise end, identifying Toward more. January. beverage growth I'm an to brought this Promotions accretive customers remain G.A.P. and impressive business and acquisition top good into report completed in integrated point-of-sale and fully our targets. pleased tier racks

benefiting operational based We and capabilities. are forward additional transaction on and to opportunities look already witnessing our the combined from this of knowledge synergies growth

solutions in addition, leading Solutions brand located definitive acquire recently In Trend Band global agreement that we strategically a Texas. is entering to announced a company

fact, the of third area ranks home among two metro Houston location. terms XXX to and in XXX In headquarter is companies Fortune dozen areas Fortune

Houston grown base, States, beverage Trend the expanding United presence within geographic to States. our customer our increased within look customer presence we base. geography on profile companies M&A this significant opportunities and grow our will this headquartered we to the we capabilities space forward and especially provide the with By our the southern within area our goals, high within expanding believe Given key have operations United area, in and executing Texas our

relationships talent. and our we of businesses strategy top-tier Given accretive undervalued fragmented together of innovation, growth, our nature and key remain a of believe this continued bringing that acquiring the industry, will aspect

since order in enhancing growth. our provide Stran, intend infrastructure Since proposition discussions heavily as -- to this We'll presence build and those Toward we our market has opportunities customers to add geographic offering end, We very our continue with updates to in progress. initiatives. our marketing explore sales comprehensive supported and with which inception, upon our would are revenue our active to including we acquisition well value unique by in that our discussions companies provide have expanding believe and the obsession capabilities. with expanding additional we value resonated invested in success our

establishing or create consistent complement dedicated our sales sales of our and This expected customer marketing for pipeline generation and this leads lead game team which which a believe changer existing force, and will Specifically does initiatives. to for team, new strategy could will and designed marketing integrated aggressive doors enhanced through digital is new to our We Stran. a potential be approach for steady further open be a strategy. sales an expanded

type market In a position XX over while annuity and opportunities and to products of Ads believe more promotional and in recently week averaging LinkedIn, the leader program customers. companies other many the country. the we're grow rapidly than our campaigns of repeat launched of into qualified a already potential ability becoming result as XX% fact, top and XXX these initiatives, close, that as the on position daily also serving per have believe to the Through Fortune having leads in Google these we

integrated end quarter on the and third ERP, our and for on be efforts target track operational platform scalability. the efficiencies, financial In the in launch greater making order addition and of prepare fully we're sales to combined to marketing with We're progress year. by implementing Oracle's to this into as our provide to NetSuite analysis opportunities, in acquisition new our additional gain the

reiterate next It's aren't few reflected bookings delivered months. products are secured we the over second important over revenue into are of with Looking to ahead, in orders very build until seeing the numbers as heading million these year the the strong that half year-to-date. $XX

the market, are well does scalable revenue remainder Overall, business built as model the have reinforce a the set the traction continued we and in it for believe our we However, pace growth. as witnessing year. of highly

fixed expenses and to Although other company that a expenses added incur we are now carrying not last sport. did public we year

of resume track our of Our upon scalability the expect profitability plan to growth we and given record operations. our build

and have we a long-term no balance I over the mentioned solid cash million earlier. sheet debt. ended as We maintained reserves in quarter with $XX Additionally,

$XX,XXX are repurchase well on $XX execute preeminent acquisition As mouth our we to million Chief outlook our market point, to program, increasing to in growth to our I'm approximately capitalized to report continued an the a and at David our of to personally made continue ahead, plan strategies, identifying final Interim initiatives value One $X.XX in expanding industry, to the the we as of our activities. At At into long-term call detail. Please call David. of growth progress show our I'd Together our also over common to a industry to result, internally this business. growing ultimately value fund customer and for team average market. taking targets. to senior on opportunities of the the to we're like and stock earnings will accretive per and repurchased with Since execution the we entering strategy very focused Financial both where over related proud approximately on force money promotional the to time, establishing and investor acquisition organic financials the in of to Stran X and billion. we new we purchased products note, shares share. Browner putting Officer, has base, have is pleased continue and by plan our management of our worth advantage share common that for date turn under last go geographically, Stran price our drive along summary, In we execute go verticals, believe are shareholders. these awareness through are customer over conviction same

David Browner

well $XX.X to in XX.X% million The higher the $X.X Revenues Andy. XXXX the compared same XXXX. you, June for XX, customers. was million, months increase Thank spending due from as business ended period new clients three existing from primarily for to increased as to

benefited Additionally, three acquisition year. XX, XXXX. in increase XX% the the sales gross compared the partially costs. in million ended of or was gap XX.X% an revenue period from increase purchasing to for promotions January Gross in the of profit XX.X% due $X.X for last sales offset of by months The to or increase assets an $X.X increased same XXXX in million, to profit June we of

decrease the able margins compared for profitability our sheer the months primarily that due Importantly, freight same care for were Oracle's revenue, implementation the comes XXXX. scalability bodes to expenses, business which for new operating to lower ended of ongoing and client NetSuite It's compared of given in to of acquisition We believe expenses the G.A.P. loss losses expenses also as new well and first our year. inherent $XXX,XXX able the additional to this company second to our reflects increase declined June were operating XXXX the despite of We the our size $XXX,XXX operating the ERP business. XX, health on higher despite of with Promos of the organic the XXXX. quarter the $XXX,XXX the Operating loss higher related system we was margins. to as public was note by gross in assets, our growth to period which of half important contract over administrative three the of platform, loss last the general well

company, approximately year approximately approximately to G.A.P. manage three second June was Operating costs due June to revenue As expenses percentage the debt. company in XXXX, last loss carefully to XXXX, we revenue. integration period for year $XXX,XXX of as to expenses assets, months ongoing period Promotions cash loss ended public our this cash for no Net being the the the XX, million purchases. last to higher long-term over continue same increase grow XX.X% continue was points a expenses basis At expenses. the a decrease year. related net the XXX of of had to as of compared a a $XX.X equivalents same XX, of of compared of XX.X% related This to were of quarter we primarily and $XXX,XXX, and and the acquisition

of strength previously million. repurchase we sheet our balance of as to Given $XX a announced, share the implemented program up

program. June repurchased over turn total of of XX we the at for the call I'll a million point, cost back buyback As an approximately X common of this At have Andy. price $X.XX shares million to $X average through of XXXX,

Andy Shape

have us I'd to call we'd point, this excited further like the thank the today. of of we like you To model. updates balance strong successful extremely up the in for to outlook sheet growth, take acquisitions, organic forward advantage execute a open thank unfold. positioned And we're we and strong to the have our about demonstrated front for At to We're call wrap providing to are you, David. revenue look a upon questions, joining opportunities we of Great, developments XXXX. remainder to well the record track experiencing business and up, as operator? up it of

Operator

Ladies open the Instructions] you. floor questions. now is for and gentlemen, [Operator Thank

Reilly question Hutton. is Edward go Please EF first Our ahead. from with coming

Edward Reilly

I wondering touch the call? guys, recognized from if synergies earlier mentioned Good you morning, transaction was the of on could that you you've the in G.A.P. Promo some

Andy Shape

of some customers advantage customers. have capabilities the Creative some also Creative but for merchandising the services to they own really able first, we being of to of offer team, those our not that and those we've expertise only use Sure, and take that the expanded design services been have, for team, to continue

So that's business expanding product our for lines is new the for customer new base. opportunity the thing first and

and of just sharing from of expanding whether support to really from terms the In is and is it's network, integrating of really personnel systems some it's sharing, that, both them. perspective job marketing initiatives and in we that an our more accounting accounting addition getting have

with we're combined do able had So the that the the staff build of current and between having to with more two staff that being them. to we

of So customer well efficiencies. those seen internal we've both opportunity a really lot as synergies as in

Edward Reilly

pipeline. could the great. And right many talking you are to companies How if now? was you I Okay, wondering touch on

Andy Shape

In acquisition terms of targets?

Edward Reilly

Yes.

Andy Shape

that want us that works So something we're with give necessarily revenue, going from revenue looking that or fit turnarounds patient, give our we're to profitability our find not as not business. to the to but different as for We're but dozens, well actively the being are right talking that be business model. us completely that's just companies we right

with that as we're So taking being offering the it's boxes we looking sheet companies companies culturally what or make LOIs strong fit capabilities, of balance and mentioned the us, level And that dozens company next really geographical difference, check a are but that of about strategic we're for. of really talking very to additional strong profitability. to we've

future more are very near well as to belt. we we're talking So of them. under our to dozens And have hoping in the some

Edward Reilly

the end million fulfilled on the then year? in if $XX Okay, expect this bookings, of wondering the great. you'd be And I was by to

Andy Shape

booked the we're mean, year. I Yes, at absolutely. I through think already that's

historically So terms of been always our absolutely in typically see revenue. we'll the has QX strongest

to from by billed. So should end but will well some of we're that but hoping that million year, as $XX perspective, experience been most likely that going the to a XXX% absolutely of -- billing bill already has the

So the revenue, that's all current not an incremental combined that's to bookings.

Edward Reilly

you estimate now, or? Got right guys a you. current Do backlog have

Andy Shape

We end of vacation. this QX just of anything a But experienced bookings. what we somewhat in in people back Typically, see at QX. of we it terms the adding still right have the downturn it out strong, publishing, but and the don't billed have norm out a typically, ramps seeing summer, small we there estimate that on what backlog are haven't we of plus we're fairly do we strong for year, have is are because up

Edward Reilly

Got the marketing of and expansion by impact how doing you're the wondering team, me, the year may you. of And this much one planning with going the forward? just do hiring more to G&A on what for end

Andy Shape

is that they're we've knowledge It's a a not it very lead large of the to execute space. and handful but fairly, is individuals we that so that only have It's hired hired gen a on Yes, of lot feral. in team team. that, very experienced a

with we're long It adding, to should will or to revenue well, as the as a go but as there. looking profit that thing significant obviously, we're profit as an G&A. as impact one impact have that's not be well So in be it to that associated

So end them they we offset hopefully the the by that to And we're of revenue see another. should cover their hoping enough one year, generating expenses.

Edward Reilly

Okay, great. Thank you.

Operator

coming Barry Investor. is [Operator is Instructions] go a ahead. question who Private Okay, next from Pasternak, our Please

Unidentified Analyst

morning, Good guys.

customer any their impact guys As reported digital by you in seeing there for you products? What as Are spending are well? promotional operating weakness your spending have marketing know, some seeing base on space in the companies customers. amongst you

Andy Shape

a we that physical digital do, the and like the of found Yes, have haven't because has, much impact it of replacing somewhat the that we the seen of effectiveness the yet. some advertising with Again customers are downturn too of done that really digital, we spend they've it.

to really how use the in that their either campaign loyalty, Stran to But really do eyeballs that our to team. to those can can we what to we're interested to clients and promotional there help is get out get help merchandise more So really is the employees, and digital them is we interested leader more putting get build hands really Stran. on as -- them in really sales to interested them. show It's get prospects, it's physical people of more get sales our to digital facilitate in for in a in approach showing people hands

spend. digital So it's Stran towards more revenue, geared really to necessarily help more not it's revenue

to too seeing interested And the the people, slowdown so a more people get in coming back. have seen actually we seen events So downturn of much people not demand. is office, for haven't of coming mentioned, back we've much as are to I are because too Stran. People digital a more are

Unidentified Analyst

great. update And on going contract, is any that Okay, on there as healthcare expected is or? the track that

Andy Shape

forecasts three were. Yes, what there. it think, We're And $X year million had is that's with from mentioned extensions. But do as increase and expecting our two, expected. one on track revenue, it could to in that's approximately we I year a as contract

that as trip that very and So an long planned. we're for but yes, be hoping to is continue that will going annuity expand the

Andy Shape

Thank great. Okay, you.

Operator

Thank you, gentlemen. ladies and

I'm to hand no comments. back it be management questions to in closing appear to there going for queue, more As

Andy Shape

excited looking we're strong positioned joining doing future on of success the we're We're well well today. we're very about a to our to sheet, Stran, with the for continue in future for the Great, thank balance detailed you future. plan a everyone what forward report into planning and

forward Stran you for eye and on we to thank you. look an for So Thank delivering you. and keep please joining

Operator

Thank conclude you, today's does conference ladies This gentleman. call. and

time lines Thank wonderful may your You and disconnect have participation. your this day. for at a you

Stran & Company (SWAG) 15 Aug 222022 Q2 Earnings call transcript