Stran & Company, Inc. Q3 FY2023 earnings call

• Revenue increased 42% to a record $19.3 million, with gross profit up 50% to $6.4 million and gross profit margin at 33%.
• Achieved net income of approximately $684,000, returning to profitability after recent quarters of losses.
• Grew organic revenue 30% to $15.4 million despite a challenging macroeconomic environment.
• Completed four acquisitions (G.A.P. Promotions, Trend Brand Solutions, Premier NYC, TR Miller) within less than 2 years, fully integrated, with expected increased profitability over time.
• Secured a 6-figure contract with a leading medical group and expanded a loyalty redemption program for an existing customer, with strong initial results from the latter.
• Actively managing over 280 online customer stores and enhancing technology capabilities with NetSuite and Magento Open Source.
• Resumed stock repurchase program, having repurchased approximately $3.4 million worth of stock as of September 30, 2023.

For the third quarter of 2023, Stran & Company reported revenue of $19.3 million, a 42% increase from the prior year. Gross profit was $6.4 million, a 50% increase, with a gross profit margin of 33% (up from 31% in the same period last year). Organic revenue grew 30% to $15.4 million. Acquisitions contributed approximately $13.9 million, or 20.4% of Q3 2023 sales, compared to $1.7 million, or 12.6% in Q3 2022.

• Expect growth trajectory to continue throughout the remainder of 2023, with Q4 historically being the strongest quarter.
• Aim to sustain profitability on a consistent basis long-term, focusing on organic growth, maximizing completed acquisitions, and selectively pursuing new acquisitions.
• Resumed stock repurchase program as a tool to drive long-term shareholder value given market volatility.

• Forward-looking statements involve risks and uncertainties related to future economic, competitive, and market conditions, as well as business decisions beyond Stran's control.
• Macroeconomic trends could impact future growth and profitability.
• Integration of acquisitions and potential future acquisitions carry risks, including managing additional operating expenses and ensuring seamless integration.

Q: Do you think the company will be able to maintain profitability on a consistent basis going forward? And given the strong balance sheet, what do you plan to do with the cash flow we’re generating now?

A: Yes, we aim to sustain long-term profitability. Focus is on returning to consistent long-term profitability in 2024 and beyond. With a strong balance sheet ($19.7 million in cash and investments), we plan to explore strategic opportunities and continue with stock repurchase as a tool for shareholder value.

Q: Talk about bookings for the next couple of quarters and the acquisition pipeline?

A: Bookings are strong, especially for Q4. The acquisition pipeline has over 25,000 potential targets, but we are selective. Being patient due to macroeconomic trends and focusing on integrating existing acquisitions first. Looking for strategic, complementary acquisitions when it makes sense for the business and shareholders.