Stran & Company, Inc. Q1 FY2025 earnings call

• Completion of the reaudit process, allowing focus on driving growth, enhancing margins, and creating long-term shareholder value. - Successful launch of NetSuite ERP system in January 2025, providing automated workflows, real-time visibility, and centralized process control. - Integration of Gander Group assets progressing, expanding into high-growth hospitality and gaming verticals and realizing synergies in sourcing, logistics, etc. - Diversification of global manufacturing footprint to mitigate tariff uncertainty, including domestic and other regions. - Q1 2025 saw 52.4% revenue growth, gross profit up 51.1%, and a net loss of approximately $0.4 million.

For the first quarter ended March 31, 2025, Stran & Company achieved a 52.4% year-over-year revenue increase to approximately $28.7 million. The Stran segment delivered 11.2% organic revenue growth, with revenue of approximately $20.9 million. Its gross profit was approximately $6.8 million, with a margin of 32.4%. The SLS segment (former Gander Group business) had revenue of approximately $7.8 million, gross profit of approximately $1.7 million, and a margin of 21.8%. Gross profit for the company increased 51.1% to $8.5 million, representing 29.6% of sales.

• Priorities for 2025: accelerate organic growth, expand margins, and drive sustained profitability. - Plan to restart share buyback as soon as blackout windows allow. - Expect compliance and integration costs to significantly decrease throughout 2025.

• Tariff uncertainty in global trade dynamics affecting direct import orders. - Initial lower margins associated with the Gander Group acquisition. - Fluctuations in rewards program liability impacting cash position.

Q: Are accounting and compliance costs from the reaudit process expected to decrease in 2025 and how much was incurred in Q1?

A: Yes, costs are expected to decrease, with Q1 incurring close to $800,000 in accounting and legal expenses.

Q: Plan to restart share buyback?

A: Yes, with $10 million authorized and $6 million available, planning to reestablish buyback as soon as windows open.

Q: Drop in cash and relation to rewards program liability?

A: Cash drop due to sending out $5 million worth of prepaid cards for rewards program, fluctuating with program execution.