SWAG - Earnings call 1 2023 | Stran & Company, Inc.

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Operator

Good morning, and welcome to the Stran & Company First Quarter 2023 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Alexandra Schilt. Alexandra, the floor is yours.

Alexandra Schilt

Good morning, and thank you for joining Stran & Company's 2023 First Quarter Financial Results and Business Update Conference Call.

On the call with us today are Andy Shape, Chief Executive Officer; and David Browner, our Chief Financial Officer. The company issued a press release today, May 15, 2023, containing its 2023 first quarter financial results, which is also posted on the company's website.

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

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

Andrew Shape

today Allie of Thank us for XXXX. joining first meaningful we during discuss thanks, the everyone, [ ], progress quarter and made you, as the

of we revenue for including growth on executing growth and quarter of increase organic first the M&A, As our to result reported a XX% continually approximate million an strategy, in $XX.X XXXX.

our environment. I'd and industry the have and quarter reflects period Importantly, multiple which in year cycle share believe finalized. across base more to our like being historically, pressure quarter note we our care, also given market is increasing given the fact customer health organic that the economic usually maintained to contracting steady year. This is last same still business first because marketing the tend regardless strong the growth XX% growth budgets notable our industries, customers' other on of the achieved We environment including in and planning are market slowest organic be are of gaming of also diversification the over budgets. many companies we our approximately and current

for spending However, reflects existing year-over-year increased quarter customers. and our sales the increased both the for new

improved increase of of also (sic) $X.X XX.X% sales. The reflecting the We XX.X% gross first buying greater are supply revenue experience and from margins million. margin believe a power XX.X% on our profit to easing we efforts. approximately gross the to attributed as in scale margin a of our can Gross in XX.X% this of to increased much XXXX percentage purchasing to ways quarter spent [ beginning freight to as in we XXXX well reduction We continue benefits as and quarter, costs improve gain achieved of focusing as be ] chains. to those

loss to of reported to X the acquisitions. integration for in a recent Although expenses the quarter, was we due part related temporary this our

absorbing costs implementation to are program. our as the generation well We related to expenses related of our also NetSuite, as ERP system, lead

believe However, decrease will will time. our and growth continued we investments support these over

a strong expect the return maintained as sheet over of time, As our balance through to acquisitions. strong our our with provide initiatives, that combined We no continue execute scale position, competitive debt, a organically and M&A. to business growth including cash believe advantage will continue our we to grow continue cash revenue and costs, leverage we to we us and million to investments, fixed with $XX profitability. At same allowing we have to

operational with fulfillment XX,XXX acquire definitive Miller acquisition TR capabilities Towards largest January, end, enhances important foot distribution our it milestone we our is date. This announced agreement and signing their as significantly to in this square a processing to an center.

and can overall implementation marketing, in business experience Stran. growth of we believe our their XX we standing the combined of while years the With over our extensive enhance technologies with assisting

quarter and complete We acquisition to the second the details during expect report appropriately.

we that all to will report acquisitions I'm continue which important well of While G.A.P. Premier as provide integrate we Trend to our unique effectively as Solutions of and Promo, Brand announced previous to discussing Stran. believe NYC, M&A, proud advantages

In closing integrating at Miller. on are and future moment, terms focusing TR we acquisitions, of the

lead on actively targets, diligence and to business. the accretive required continue identify M&A and complementary time potential that complete given explore to be However, due to can our opportunities we

In continue addition, existing as relationships. to we customers expand customer new secure well as

in we we February, Specifically, customer with to in can us a that launching of their merchandise out sought of product program. to multinational North direct-selling the expectation X effective by loyalty over their the loyalty company. process American program. support we their influencers store million We're now announced assist were This so incentive growing contracted our provide in beauty e-commerce bolstering

the also we unique for continue we needs to solutions well customers our requests an each to quarter, their as in as their on spending develop existing witnessed customer. address deliver creative During as increase of

value and easy customers for well We our as These our for customers online products. also managing launch continue XXX as to now to simple our online and customer stores. stores new are long-term over provide access actively

to further NetSuite, aspects our continuous important and sustainable enable new Importantly, our training believe adhering -- of executing the out we to growth. lead include laid and year, our implementing fully core very each business budget. growth and consistency initiatives and to to to are and annual employees These which future These meeting we propel are profitability. long-term and our revenue setting that pursuing will to profitability are business goals,

industry, executed $XX these promotional of national So business to customer now will wrap growth at and with further strong resulting up, which solidify base we we Stran, over are believe leadership in is billion. awareness We a strategy, undertaking developed our footprint. activities the valued increased a products and position

David. investments ahead, go in that turn steps look to We're profitability. Financial and Officer, to in expect Browner, detail. proud the go our are of accomplishments in to and our I'd over progress this David these making the long-term extremely we Chief to call we're taking will forward our also over point, We like result XXXX. At financials Please

David Browner

XX.X% for from the March Revenue million as $XX.X as ended from $XX.X months was well primarily customers. XXXX. X XX, increase higher spending new The increased clients from X Andy. to you, the existing business XXXX, to ended XX, for approximately million due March approximately Thank months

ERP we acquisitions the -- ended compared XX.X% Promotions sales was of approximately March amount The August in XXXX. Gross expenses X NYC $X.X by ended in million increase costs. Net X XXXX. a XX, our the in of an XXXX initiative, the XX, increase million of as dollar acquisition the December the offset for percentage purchasing loss increase agreement to for ended the XX, XX.X% X related to was to March offset implementation platform, ended increased revenue of assets integration company X in approximately Trend of XXXX, purchases the Trend increase lead due the acquisition months XX, G.A.P. our in the to back months assets, NYC March to March the profit the to the Promotions March partially or XX, the increased expenses generation of assets related lower for debt. At Additionally, to business. At of a Solutions months was in approximately Premier of NetSuite's million of million in Brand ERP by from of G.A.P. XXXX. an revenue diligence organic profit ended Premier cost assets XXXX, This partially due XX.X% for XXXX, the from of of $XX.X assets, Miller's and gross March call on $X.X and net months public due The assets approximately system XXXX, the in the XX, the the the this to January cash or I'll growth point, an increase XXXX. a company had to X and the $X.X revenue Brand $X.X over no March primarily XX, TR relating X months increased due and the was ended assets, loss benefited Solutions turn XXXX, in Andy. higher long-term the being purchases million ongoing and investments asset expenses months related purchase to

Andrew Shape

year. I'd growing strategy, base footprint, you, We increased additional resulted open up, by joining the on this successfully national Thank throughout To customer growth strong Operator? have wrap remain our for has to and forward of outlook up look David. the the you in thank business we like to to call we'd questions. point, to At which and reporting call today. the like a executed the encouraged meaningful revenue. updates

Operator

[Operator Instructions] from And morning coming this have a we EFI. from question Edward Reily

Edward Reily

as few quarters. down. It a bit over costs of if looks quite like been about freight maybe you and this last what's down the come talk trending can have been a driving Wondering percentage down revenue

Andrew Shape

China went those of Eddie. the of Thanks, freight Sure. couple One, normalized. down. went costs up. importing up goods significantly, as But been freight from shortly well a have during driving thereafter, bit it things cost the as domestic quite pandemic and A have freight

the range of, cost one maybe to a the point container say, during of $X,XXX. down in the has $XX,XXX, at under even gone was $XX,XXX, think I somewhere pandemic

seen we've a freight of cost. normalization So the

also addition charge freight. to -- for being appropriately we're we're to cognizant that, In very trying of being

of and getting our freight. as of the or Service LTL freight, advantage Postal being just of of our carriers using shipping one our that's U.S. taking aware goals So is in more profitability to efficient -- being with opposed more UPS to

effort a conscious coming it's also making rates down. that on So with combination end a we're our of

a So it's good combination.

Edward Reily

than little for bit. you know I expected. costs a to It And some was I if could expenses mergers. Okay. bit guys Got relating looks you operating then maybe me little nonrecurring I these higher of you. quantify various on a wondering touched

Andrew Shape

Yes.

launched there's that. -- as of driving put as things energy last one lot of of the going a stages -- So focus was we One big and we month are that a with that had a final into going the time since and and different our our of into ERP live few lot it. that NetSuite

the So leading to go have go to to lot energy licenses. to we put going that's again, be that, time trying a we We're continually that's improvements and into and to something up But of always to of that. really, away seed we're not make going because launch that. completely the NetSuite,

So that's one.

integrating that the diligence closer the to due closing and work, the of that, acquisitions was part legal, operational there's the through the and as and as doing second a accounting resources. The for perspective getting close from accounting working Miller them well all TR

about the in because are of attract enterprise calls to needs, those last long-term long-term contracts onetime a the needs. expenses long different results to So just not gen but the single few we've then starting necessarily we're is that talked from. us, trying on do with initiative lead that final lot sales that see It's one. And one cycle customers that a we're more

it's SG&A looking at a and much relative driving it even and ideally aware that to profitability. those some create all our gross So of combined relative more of expense ways of things to can SG&A smaller our are profit profit. to it We're our gross so reduce

So may kind hopefully, to have we historically QX those explain compared sales. expenses things in to be a of what had relative higher operating why the you to little

Edward Reily

Okay. And quarter. for current the last Wondering on this one if environment maybe you about historical trends can maybe the see me talk And historical affecting seasonality then trends year? you by if seasonality.

Andrew Shape

Yes.

-- it's versus about XX% first quarter, -- has a are then the which typically, much higher. lowest So our quarter, -- third, so very quarter at of second, been revenue similar. smallest fourth our think couple about the is historically, usually And typically I

years, the quarter we've worst in XX had almost past the for our always quarter. first So

the such or something for to of budgets the the the these be delivered budgets need the end at by are year those of because end be end finite end us. And executing was to the need the to year, people not planning year. of the people It's of of our then it's is that and beginning that's new and or the period before where And used before the holidays. the say things using typically on orders. a holidays spent So year,

happened. why So it's that's

significant amount terms the with as -- outlook spent. of you general in can in the terms haven't XX% necessarily business, of seen dollar growth, we slowdown see In a orders the

though. have orders seen as not many We

to theoretically it with a good over which a seen smaller take order is seen less less period have go we process the for But time have us volume. as We long orders. many should size because volume, average of up

wisely than more what So that should of really why having bit taking direction more should our we of people and a rather spending little more campaigns campaigns. targeted they and much find trend of blanketed a spending they be and

much be shifted to of our some we've our more to and -- efforts sales So efforts blanketing. opposed targeted marketing

our haven't So significant billings reflected There yet. of and necessarily we the is sentiment some little bit that in about seen haven't the but being we slowdown. people necessarily seen future, more a uncertainty a of nervous conservative

Edward Reily

Okay. more And in. if I could sneak one

increasing. Just customers function size general? working in on larger the with order average this a Is of

Andrew Shape

making combination we well more energies a of with as effort in help think customers as them a can towards larger with line effectively. customers more I to are us our conscious working focus us who it's how

smaller So ROI. as up completed need much in to doing fulfillment and single compliance who store who a one the that company value exactly isn't really a see online going distribution want program with value get what as us to back much doesn't for they because with an set reports as has that us them we're them in for customer them

really we're conscious a for that. effort So making

So that. or that's think be I well would could big that think I as do a that that, of of part part that a

Operator

like Shape turn now no And there Andy in questions for are back would Instructions] closing queue [Operator this I floor the to at remarks. further to time.

Andrew Shape

rising, excited for excited of position economy, for the about you, rates the a for right and in into massive well joining. We're our and the market our cash the Stran of think, future. uncertainty our we're Thank position reputation in more strength I interest well differentiator our and With as now company, in is rest our the progress quarter, our year. about everybody, for as the sheet Stran first balance

I capitalize, well few the months about to the now and excited think for as is I'm Stran next into for us future. the right time

everyone, joining. So for thank you,

organization. developments updated listening you. and confidence We I will in as keep Stran everyone occur. an appreciate your And as everyone recent Thank

Operator

conference call. This today's conclude does

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

Stran & Company (SWAG) 15 May 232023 Q1 Earnings call transcript