Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Stran & Company Second Quarter 2023 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Alexandra Schilt, Vice President of Crescendo Communications. Ma'am, you may begin.

Alexandra Schilt

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

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

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

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

Officer. turn that, Shape, Executive With over Andy. Please to go now call Chief ahead, Andy we the will

Andy Shape

thanks, joining everyone, you, Thank and Aly, us today. for

in for months, million Over to the has business $XX.X growth second resulted months and of the strategy, revenue last of we $XX.X first executed X quarter several and which revenue million in in developed have on growth XX% to XXXX. our for XX% the XXXX growth

from margin for gross profit last improved million also organic the increased year. while in same a second XX.X% our to achieving period XX% and our the increase $X.X quarter, XX.X% revenue in gross profit Importantly, to XX%,

declining environment marketing to by the for X in sales XX.X% million, to our improvement, Additionally, uncertainty XX.X% period on organic $X.X from to increased months XX%, this growth margin and experiencing and the due market last XX% by of increased year. same XXXX, for current our profit gross budgets. industry We're improved gross are the margin very and profit while revenue given economic many pressure organic proud of and competitors first

contracting witnessing products contract and a sales additional strong the capturing momentum are We're result promotional focused industry. $XX within efforts though, than billion a of marketing Rather as market highly we and initiatives. growing our share

outreach We to established expect from we this trend as as acquisitions. refine as leverage our expand further and our well continue relationships

our acquisitions, X Regarding XX are within months. meaningful we the completed we to last proud say acquisitions

Miller and Brand and Trend Promotions, Premier TR important our brought all and of advantages Solutions, G.A.P. to strategic meaningful recent have NYC Stran acquisition most operations. our

Promotions, Trend G.A.P. working Brand into all Importantly, of are towards are NYC integration we our TR integrated Miller. full Solutions, operations, and fully Premier

some transaction largest to significant to our integration TR close And While Miller cost, has our it for while results time has date. and as from TR historically we Miller, taken revenue quarter profitable. this anticipate integrate the acquisition the been reflect

And and them by further additional savings, into profitability should our enhance our cost we anticipate cash organization, which flow. integrating

have that that part new support into of brings validates verticals enter and companies our believe acquisitions or as valuable to enable These strong not to propel this important to our customer established growth. national expand strategy our growth us they relationships each can footprint, we leverage potential forward. our strategy an and exploring and transaction identifying Importantly, of we only accretive complement play

of among customers building witnessing efforts, contract the customers. market. mentioned reputation and strong consolidation, established within and contains and I've strong and momentum industry, programs existing promotional both combining that our expanded building right sales the reach we M&A forefront opportunistic By strategy the marketing our with are aggressive us to is companies talent new right resources, product for industry our bring to the we're As before, the and

marketing integration our We complete of can expect their Miller this who TR the and trajectory leverage relationships. as expand to we established continue

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

we industry, and XX the the being the we're continually Specialty top recognized addition, recently In in among are Institute. Advertising by ranked distributors

awards. true say recognized in of proud exposure I industry. the ASI a to and their I'm decorators efforts visibility result business awards become suppliers, a the Stran within that awarded that the within of to XXXX industry. network receiving the our by our And billion also in products promotional the XX,XXX was validates person of accelerated the incremental as ongoing is and and distributors year being served leader and Councilor $XX.X ASI knowledge the growth

growth that initiatives we sustainable pursuing lead executing and to profitability. long-term will Importantly, are

initiatives setting already new mentioned, revenue the we Beyond fully are our and to training hearing consistency profitability and and setting working to continuously enable implement annual budget. goals, I've also employees NetSuite, to

of These and business to our our are growth. strategy very propel to aspects important our core the

the long for NetSuite the much last of these investments that valuable for are generation expenses the these a relate overall We lead temporary profitability acquisitions, our believe report loss related costs. did quarter, and term. and costs essential we While to implementation are of like to and quarter, growth in will integration the be program

time. We over costs expect these to increase

we've and savings back limiting with flexibility same $XX.X to travel as investments with initiatives implemented on entertainment. they have the cash solid cost opportunities a nonessential XX, by cutting of also explore us June XXXX. advertising and provides staff, spend the balance reducing preserved time, million At sheet as and in strategic This We recently arrive.

growth strong increased base executing national So footprint. a on in and Stran, customer business to resulting strategy, a we up, awareness of for wrap developed a

I'd ahead. over like Financial to Chief the David, David call to results the please to our Officer, point, Browner, turn detail. go this over At in financial go

David Browner

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

assets the G.A.P. in from Marketing of benefited assets the asset of the Business Services company assets the XXXX, August of Promotional Premier Miller the in of June acquisition XXXX TR in XXXX. XXXX, Promotions of January the of Additionally, and in December Trend

months Gross million $X.X months in to increase to loss the XX, from June XX, purchasing revenue of partially $X.X or due June XXXX. June approximately XX, XX, an the ended or XXXX, net an the Net was compared was The X ended for offset increased $XXX,XXX for months in months costs. ended XXXX, gross to in X by of XX.X% XX.X% approximately approximately XX% X for of loss million approximately $XXX,XXX for X increase increase amount sales, profit revenue the June profit XXXX. the dollar ended the of

an Solutions, ended million expenses Premier XXXX, XX, NYC operating were the This reoccurring change XX, to compared and acquisition $XX.X due X the the June XX, to had ended investments June and These each the partially primarily from Trend of of the Brand At increase cash by the G.A.P. factors debt. XXXX. sales increase X increase months TR costs. and XXXX, June increase long-term organic purchasing company an assets X of months no Promotions, XX, and XXXX, Miller during ended during in June of was months in offset in and sales

the this I'll to point, Andy. turn back over At call

Andy Shape

expanded increased on growth continued Thank point recognition our growing strategy, business industry, revenue, an and the you, in customer execute increased David. within national Overall, we resulting have to base. a

point, like they call very we'd accomplishments proud to are today. as joining look thank like this the of our additional reporting to to say and to At forward the Operator? We I'd achievements for unfold. up call open you questions.

Operator

from coming Smith first Our with Instructions] is question RSA Investments. Robert [Operator

Robert Smith

Just affect couple your How of a does questions. seasonality business?

Andy Shape

Sure. Yes, you. seasonality business. our Thank does affect

no year first the and quarters historically, slowest X months different. been So our have this is

affect that. it does So

that to the the now continue is now. year that year. note business the QX of second will us our in in have which very strong bookings customers supports in our bookings, between thing are because over make our addition $XX we one those deliver of accelerated growth QX, will But half acquire are open with Currently, any in and we million placed bookings to the that and but right new end of have orders already belief

the seasonality summer people quarters end either of at seen this when in our lot the affect the expecting So at -- historically year, and comes largest holidays does and very of for the really that end the it. of a preparing we've start well. the We're are as business that's year

Robert Smith

some some costs specific company but All this cite expenses right. showed Can quarter's growth, to that profitable profit loss? not quarter. nice the sales contributed just you The and and gross unfortunately,

Andy Shape

Yes. Sure.

So couple sales for of growth there's contributing XX% to see did profit. loss. that are factors as mention, did and a And XX% you gross we for

the is probably The the one acquisition. the -- first largest is one

in XX months last over we've acquisitions companies completed done million historically, X the revenue. combined $XX have in So with those historical

as really our that diligence of really the associated capitalize the business. to of portion put make then as those transaction, that to had the the the with we due identifying legal the in business capital accounting, of as with large both well opportunities to as into driver a integrating combined and we've those some costs. And close resources with well sure them, place and is on closing costs costs that it's a performing So the

revenue, also sales to -- a that close to of the in and have costs, we the and And the identify keep longer the cost, we look that. any start a transaction, recognize we Yet to So cycle maybe resources mind longer the costs lot lead recognize have when sure to employees, overhead, immediately the additional of we Resources, times, bit we make fees because the sales takes of sometimes little that. have up. went to a we those at professional cycle immediately. to to anything those do that have

those in will mentioned our should like I combine in as short-term $XX massive revenue. the So term dividends pay losses created over we that profitable in the long historically long things this million that run combined, feel

those some of one. -- costs the first So that's

additionally for again, we acquisitions, that revenue. hundreds make $XX are these of them. us making create term to millions is into to But one got get million only it technology not Stran differentiators in also it customers of to business but where so the $XX long-term that efficiencies second us our do because million, some investments The to want long for that internal easier makes going short-term investments get will of isn't with us to what

build So that to we infrastructure. have

So building time. infrastructure that takes

adjustments reductions only Yes, we or efficiency. in infrastructure, there's are also at where adding redundancy not staff -- but at looking looking making and

and are as cost the X as The and technology the really those last integration But So one really well costs big is we're looking the those together acquisition drivers at for the for quarters. combining that. improvement. really the

Robert Smith

last a one Well, just question. And lot. that helps

to going affect at And macro rest year? how seeing looking What you you of that trends. your Just the budgets? are marketing customers' do that's your think for

Andy Shape

Sure.

business, So seen our a the marketing we and the seen things as of we industry. the seeing not budgets, I industry but maybe specific within lot maybe heard have we haven't not much a many we as not growth going recognizing but suppliers backwards, any growth, past. larger customers within have We're of had have orders -- in heard have that one seen we but in slowdown as but stats, that are are the orders.

targeted have we putting bit mass a are found blanketed. taking really more larger customers what those initiatives rather initiatives is towards that more So really are and our little than

-- that optimistic we'll revenue we to to that long-term QX we're that or lot especially QX, that spending QX strong the QX confident is going and million and QX in of incremental with half revenue, the we're of between about hit holiday then, these over our of in large a because revenue bookings, very going QX confident bookings with and additional very have of worth year. bookings hit that very $XX we're are strong they a orders second hit see again, will So in currently holiday, numbers

Operator

Instructions] a Mike from We is [Operator investor. [indiscernible] an have question who

Unidentified Analyst

and Where Stock is around think trading about $X.XX. you stand Board or the do buybacks? or discuss

Andy Shape

Sure.

$XX think cash using have million have for of that buying $X we in and it's on I back buyback. where, we spent And up buybacks, do balancing preservation place and to really about versus approved So the million stock. buyback historically, a we

products and went So something money within because public. of become we things a we really to public why go we went promotional look feel within that the that at like growth industry to there's use and such a this to one is leader. accelerate an We our to create true special the opportunity combination of industry

leader So balancing back as true value building company, in becoming between long-term the a well. versus industry buying shares

$X as advantage of take left find million -- about to balance and bank we I we think see will So have or we we we when $X take between it shareholders. look to we I have at them, our a that have and we of in and that million that if past, fine mentioned, to as the advantage our

Operator

currently may have. in time, this I We questions further they it closing have at back so remarks queue for management to will no hand any

Andy Shape

Great. future. about and optimistic Well, thank Stran, you, the for our We're where are everybody, today where joining. we in we're going and future

you. thank with us in and watching. So Please keep stay touch

We to a lot in report Thank few excited have months next happen you. that. the to on and

Operator

Thank you, This at thank you this and we ladies and you today's does lines your for and conclude participation. disconnect gentlemen. conference, time, your may

Stran & Company (SWAG) 14 Aug 232023 Q2 Earnings call transcript