SWAG - Earnings call 3 2023 | Stran & Company, Inc.

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Operator

Greetings, and welcome to the Stran & Company Third 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, the firm's Investor Relations. Ma'am, the floor is yours.

Alexandra Schilt

Good morning, and thank you for joining Stran & Company's 2023 third quarter financial results and business update conference call.

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

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

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

Andrew Shape

increasing is achieved with most to period million for more net to for last we company. generated of million you, margin growth This year. And for initiatives. a XX% $XX.X increase business for profit XX% thanks, extremely revenue the third profit joining approximately income we a success the our increased everyone, report XX% XXXX, gross Ale, achievement the reflecting record notable, XX% that a gross our same $X.X and major proud by in Thank compared importantly, us quarter Even $XXX,XXX. today. to to a of I'm to of the the

business company. profitable have expenses, made, recent M&A Stran our while are carefully our of may sales. We declining we macroeconomic coupled these strong to of results a historically believe believe a demonstrates this challenging many as to for market demonstrates activity, managing to and a public costs competitive as is cost potential grown we return environment as the many company, organic in with profitability the and has of associated to been and and business. quarter But strong earnings $XX.X the onetime revenue -- are as in witnessing with losses quarters. We you to well you with which both the a aware, testament reported Moreover, our position XX% investments our As growth have we investments scalability our peers our share. third proud million despite our achieved with increased

expanding result streamlining our remainder the our growth of their customers as sales of the of season continue the holiday as executing quarter marketing strongest strategy, always budgets expect which our been throughout landing, included aggressive fourth as business a year annual revenue the has utilize and growth remainder our customer of to direct effectively historically, is upon with as, trajectory believe has We on operations. M&A growth us. We contracts the well in terms the

all transition report that into Brand elite advantages our clients. I'm for footprint; pleased capabilities; geographic X increasing X bringing roster into warehousing our now years. Each Solutions, Regarding a to than brought and manufacturing to fully impressive Promotions, integrated less including seen are M&A, Miller, our acquisition, expanding acquisitions and completed seamless to G.A.P. already Stran. we've and our and of strategic operations, clientele operations, have meaningful our we Stran including TR within and a Trend NYC all has Premier important

strategy. our we expenses, the acquisitions While benefits come integration are costs and onetime did other witnessing with of these the

of expect businesses time. of continue We these increase will to profitability over each

I've ideal as growth M&A while our industry consolidation. strategy M&A the as we we part And promotional has they is arise, products of exploring integral away for opportunities from As mentioned, will an been focusing are not geographies organic completed and into Moreover, expanding potential on and pipeline. acquisitions the impacting marketing expanded our of our support new verticals to maximizing while sales our growth are our growth. and positively move programs

program new gastrointestinal new medical throughout In including the has a fact, recently United group multiple over customer the as well marketing with to employees. We a XXX X,XXX also regardless our X-figure and ability kits and further and new We're new to hire we'll be and the that announced is of secured believe providing in contracts have specialize address contract leading employees. of disorders. we customers, This contract holiday process our our this of as with both customers needs for this in locations States the validation customer, over industry. gifts existing of launching of recruitment its treatment

customer client We implementation several client entertainment behavior. This redemption with other XX,XXX for approximately have approximately them. $X and total a physical well. and for this reporting expanded of number program loyalty from is program for platform, rewards this drive of to experiential through in addition, exploring aspects seamless and this The orders combination consumer client all million. to our maximum sales of more relationship ideation and to existing order from an programs generating is designed both online support In launched logistics, in as program forward a programs sales. our the clients for a and production, program, of technology, we from sports client with to engagement XX,XXX similar look million ensure this program of on management, fulfillment We in $X executing supports received consumers. We one over than of week such their experience based orders first units the which example of our inventory a product and program e-commerce loyalty further alone

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

advertising rankings the addition, in institutes products billion serves of growth revenue specialties XX suppliers, our business network being top and our well. ASI which within industry, in are of In promotional industry annual become most XXth industry, ongoing promotional validates to the decorators $XX.X including follows we listing being jump and people acknowledged a products to XXXX progress, honored the continually accelerated as and to powerful XX,XXX in distributors XX with recognized in awards our our their continuing in overall using I'm that Magento the and Adobe's efforts will the discussed, continue overall financial fully business. to operations to We our our the Open believe the program. are e-commerce confidence improve technology of outlook e-commerce the within business, of and previously to leader enhance are repurchase industry. Furthermore, have implement additional positions actively Source. Reflecting incentives our we technology platform, resumed we working into And strategy stock our investments and along as our we efficiency capabilities. our NetSuite places

approximately September over course As million of repurchased of stock of we the XXXX, the worth $X.X XX, have program.

can $XX stock any the we are to to which products quarter value have time, in strategy, technology remain offerings. Stran long-term While with growth believe explore we SEC. third the committed tool there as growth our we are the strategy, as a promotional sheet believe and management at as given capital we arise. opportunities have with many in continue allowed billion given the program of the million business has shareholder have secure drive flexibility to We the an for market team operations of effective This same XXXX, resulted we filed strategic to with be profitability as contracts, to industry. At a repurchase with position of well-designed our preserved volatility they us within in new limitations repurchase enhanced a strong open XX, investments how the execute the time, that September stock and as along which and XXXX. leader members markets. We've purchased Overall, also provides the to in reported new balance the $XX.X will shares cash

in pursuing growing by innovating initiating help efforts and to to develop investing and our our So wrap acquisitions continue apply to operations. up, deepen we marketing growth relationships to plan technology, selectively client sustain strategy and to

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

David Browner

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

freight months and months million as was of XXXX, revenue X for from million the for due sales of G.A.P. revenue for primarily million XXXX. and Brand during approximately due increase Miller, profit assets operating for the in XX% the the in of Trend September X TR Solutions Andy. the ended months partially December Promotions for for point, for $X.X assets profit XXXX, XX, increase million XXXX, Premier $XX.X change ended $X.X sales approximately an TR acquisitions defined sales, acquisition to the loss NYC and offset each organic the the excluding sales, had of Solutions turn purchasing for Miller 'XX XX, of assets an Promotions, I'll net or of September acquisitions was dollar each months $X.X Trend June income XXXX. Recurring Promotions sales million compared September increase or by $X.X approximately offset to At August months of in approximately in aggregate an of gross and in third August January XXXX; Solutions, ended and the of in Brand from for increase in XXXX; investments the partially G.A.P. expenses. At approximately of September million X XXXX. Gross months of XXXX. Additionally, accounted or XX% in approximately debt. this by of of $X.X no of NYC was XX, XX, XX.X% approximately over of $XX.X and increase in XXXX, the to XX, of XXXX; Brand million or costs. Net G.A.P. the company respectively, X September months ended million This XXXX, ended increased to Trend to $XX.X $XX.X in approximately million of approximately call or cash to XX, XXXX September the in X compared the to long-term XX, million the XX.X% XX.X% a to ended quarter increased from XXXX revenue September an the the amount September X Premier ended sales compared X the the XX, acquisitions back $X.X approximately XX.X% XXXX, The quarter assets third of of January

Andrew Shape

like in initiatives resulting call date, from We're we'll proud new increased David. for extremely to We they profitability, forward additional you we the to this progress as benefits we'd you, up have to look the open Operator? I'd provide Strong. today. the additional witnessing Thank At of to updates unfold. contracts call point, growth of to questions. and like and thank made exposure our joining

Operator

question ] Capital. [Operator Instructions] [ Our first is from with Forest Pincus coming Nick

Unknown Analyst

First, looks quarter very like congrats the is a you've return done strong a very acquisition. It strong profitability. the to revenue integrating generating on growth. and The job organic company good

balance basis flow So the do will be the to now? my a plan with you cash maintain is, strong given consistent what company forward? we're that you profitability And generating going do able the think question do on to sheet,

Andrew Shape

Yes.

So good question.

those M&A, yes, businesses the we're proud of terms within integrating our organization. of in First,

of So as goal acquire goal now retain that grow acquisitions of And is we when immediately. we is turn done we them one our we've of to can accretive we that. a them, not that of the and and is -- it. them. do to integrated focuses to companies four right portion hope just we've that's The good about, talked

question your profitability. So to about return

to sustain to long grow for XXXX, goal of went -- raise looking as that part we we is consistent public looking profitability business. to went the looking well That as the forward term. our forward, capital is returning goal, are We a when business. was public our When to long-term XXXX, QX to

we as good years. we growth, grown essentially approximately I taken that do, what job longer get possible. doubled look in doing to that while last It's grow back year is X.X a little to at at acquisitions profitable profitability to significant which trying a almost done organically, while to us seen or -- the as we've think have promised remain

that So will we forward increase business very time making creating capital operations, that a job, feel we're like goal even for position we've through more make good sheet a continuing profitability looking done our to cash stronger. us long-term our we over and so can balance

Operator

is Barry is who investor. question next [ Our coming ] an from Pasternack,

Unknown Attendee

you think that out in Andy, what could Congrats more playing quarter. looking bit -- on the a I good. you're talk bookings mentioned was about were couple for prepared wondering next you just the remarks little if over in of the seeing the bookings quarters? I

Andrew Shape

Yes.

bookings So we've year we've quarter fourth is largest we're of terms expecting that in -- quarter seen seen bookings, well. as typically strong this and our obviously,

we're XXXX, have not into expected. we too as much -- necessarily we of visibility much as that into But macroeconomic slowdown trends, Looking don't into XXXX. have potentially obviously, not seen a well

So we're looking very forward to XXXX.

position marketing terms not we're in our our But within to preparing track are and people feel spoken to maybe we're have that of good revenue slowing industry because from expected. new I and as a We a efforts as we've little sales down that others heard not for like customers. business very soft in necessarily much

So for quarter fourth are very we're that. already. Bookings positive for strong very

So we're quarter. fourth for positive the

also very in look into to as balance as be competitive like we their to to As XXXX, well our as for position able capitalize others growth that strong may they some good keep that sheet feel of allows not as to the needed anyone able with be us be on we of up capture business some as clients. where we're a or much

So very we're positive XXXX. to looking looking

Unknown Attendee

be make And the if you're what and pipeline digested on to the or now? acquisition like? Great. integrated, acquisitions, are you Okay. that to Or next does know the make if little ready pipeline another another but also, guys could And a how does they've that you're the would been bit about -- further you at acquisition said look of the prior just that you existing maybe mean current you looking acquisition? line down the comment I all acquisition acquisition timing thinking and

Andrew Shape

over the have that never ending, look targets say at. pipeline pipeline we could really but that XX,XXX the -- acquisition -- I we there's So to want is don't potential

So there's ever that we there supply any out absorb. -- the demand the pipeline -- is exceeds well could

So at footprints who clients who Again, looking complementary someone their business after under we're who and identify as well go a, as and really has being we very about, where geographical going anybody them we're and grow or why? selective maybe can serving that.

a of want rates a may see for we what of that as with able if being there's few have So well to as are, support deal And want financially. we interest see type be much any maybe any we're there financially. just good the very very selective opportunity where us business that potentially for being next find more not out strong struggled happens to they months to companies that to with

and squander into there's financially turn we by multiple focus. that We and those to bit a want most had because tremendous being that more seen standpoint that revenue. invest we've want the client patient expand than historically to really resource potential $XX even had one, them that And further TR we've the companies trends. go that we that, their and macroeconomic that in our especially want reasons, the that We So acquired. little where into to closed go we for capture investments past two, base million made we more. maximize make million maintain both businesses, we're $XX And mid-teens, in don't to already from being that sure Miller, recent we've even a June, and in with losing in to within

that very We're makes potential in business acquisitions our -- we have where now report can it it. our nothing on we they competitors we when right business But organic other for capitalizing on are customer being our So with our -- strategic active strategic discussions than real now, right horizon about not multiple there's we're sense. the near make very sense we and, and obviously, focus is business but our about like shareholders. for feel that

Operator

[Operator time. no at on this line Instructions] Okay, the have we questions

you So back for Shape Mr. any will hand it closing may I to have. comments

Andrew Shape

joining. everybody, you, Thank for

profitable we've made QX while the long achieving we into As sales mentioned, the for we very think can remaining and progress our growing levels company. profitability extend that the of proud we're and term

everybody, to to and been look can into forward doing your the future. you, to we believing thank So for we've much, day. deliver showing what what Stran, in very you the commitment continue enjoy Thank and

Operator

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

Stran & Company (SWAG) 6 Nov 232023 Q3 Earnings call transcript