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Stran & Company Reports 73% Increase in Sales and Achieves Record Revenue of $14.8 Million for the Second Quarter of 2022

·8 min read
Stran & Company, Inc.
Stran & Company, Inc.

Conference Call to Be Held Today at 10:00 am ET

QUINCY, Mass., Aug. 15, 2022 (GLOBE NEWSWIRE) -- Stran & Company, Inc. ("Stran" or the "Company") (NASDAQ: STRN) (NASDAQ: STRNW), a leading outsourced marketing solutions provider that leverages its promotional products and loyalty incentive expertise, today provided a business update and reported financial results for the three months ended June 30, 2022.

Andy Shape, President and CEO of Stran, commented, “We continued our growth trajectory during the second quarter, illustrated by record revenue of $14.8 million, a 72.5% increase compared to the same period last year. Importantly, on an organic basis, our year-over-year revenue increased 49.4%, reinforcing our traction in the market. We remain committed to our business growth strategy involving expansion of our geographic footprint, entering new verticals and opportunistic acquisitions that complement our existing platform. Towards this end, I’m proud to report that we have fully integrated G.A.P. Promotions into our business operations, which we acquired in January 2022. More recently, we entered into a definitive agreement to acquire Trend Brand Solutions, a leading global brand solutions company, strategically headquartered in Tomball, Texas. As we work toward realizing our M&A goals, we expect to increase our customer base, grow our capabilities within the beverage space, and expand our geographic presence within the United States. Given the fragmented nature of the industry, we believe that our strategy of acquiring under-valued and accretive businesses will remain a key aspect of our strategy, bringing together innovation, relationships, and top-tier talent.”

Mr. Shape continued, “In order to further accelerate growth and leverage our established infrastructure, we recently expanded our sales and marketing initiatives by establishing a dedicated lead generation team and increasing our digital marketing spend. Although we are now carrying public company expenses that we did not incur last year and added other fixed expenses to support our planned growth, we expect to resume and build upon our track record of profitability given our highly scalable operations. Overall, we have maintained a solid balance sheet with over $28 million of cash and cash equivalents as of June 30, 2022, which provides us significant resources to execute on our business growth strategy and establish Stran as a preeminent force in the promotional products industry.”

Financial Results

Revenue for the three months ended June 30, 2022 was $14.8 million compared to $8.6 million for the same period in 2021. The increase was primarily due to higher spending from existing clients as well as business from new customers. Additionally, the Company benefited from the acquisition of the G.A.P. Promotions assets in January 2022.

Gross profit increased to $3.8 million, or 25.4% of revenue, for the three months ended June 30, 2022, compared to $2.1 million, or 25.0% of revenue, for the same period last year. The increase in gross profit was due to increased sales, partially offset by an increase in purchasing costs.

Net loss for the three months ended June 30, 2022 was approximately $0.4 million, compared to net loss of approximately $0.2 million for the same period last year. This increase was primarily due to integration expenses related to the January 2022 acquisition of the G.A.P. Promotions assets, ongoing expenses related to being a public company, and higher cost of purchases. These factors were partially offset by the increase in sales from the G.A.P. Promotions asset purchase and the increase from recurring organic sales.

Conference Call

Stran will host a conference call today at 10:00 A.M. Eastern Time to discuss the Company’s financial results for the second quarter ended June 30, 2022, as well as the Company’s corporate progress and other developments.

The conference call will be available via telephone by dialing toll free 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and using entry code: 371218. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2855/46359 or on the Investors section of the Company’s website at ir.stran.com.

A webcast replay will also be available on the Company’s Investors section of the website (ir.stran.com) through August 12, 2023. A telephone replay of the call will be available approximately one hour following the call, through August 26, 2022, and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering conference ID: 46359.

About Stran

Over the past 27 years, Stran has grown to become a leader in the promotional products industry, specializing in complex marketing programs to help recognize the value of promotional products, branded merchandise and loyalty incentive programs as a tool to drive awareness, build brands and impact sales. Stran is the chosen partner of many Fortune 500 companies, across a variety of industries, to execute their promotional marketing, loyalty and incentive, sponsorship activation, recruitment, retention, and wellness campaigns. Stran provides world-class customer service and utilizes cutting-edge technology, including efficient ordering and logistics technology to provide \order processing, warehousing and fulfillment functions. The Company’s mission is to develop long-term relationships with its clients, enabling them to connect with both their customers and employees in order to build lasting brand loyalty. Additional information about the Company is available at: www.stran.com.

Forward Looking Statements

This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” "will” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” in the final prospectus related to the public offering filed with the SEC and other reports filed with the SEC thereafter. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Contacts:

Investor Relations Contact:

Crescendo Communications, LLC
Tel: (212) 671-1021
STRN@crescendo-ir.com

Press Contact:

Howie Turkenkopf
press@stran.com


CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash

 

$

28,201,906

 

 

$

32,226,668

 

Accounts Receivable, Net

 

 

11,337,433

 

 

 

8,982,768

 

Deferred Income Taxes

 

 

386,700

 

 

 

113,000

 

Inventory

 

 

5,958,141

 

 

 

5,230,792

 

Prepaid Corporate Taxes

 

 

87,459

 

 

 

87,459

 

Deposits

 

 

634,210

 

 

 

623,402

 

Prepaid Expenses

 

 

303,508

 

 

 

299,411

 

 

 

 

46,909,357

 

 

 

47,563,500

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET:

 

 

696,812

 

 

 

615,837

 

 

 

 

 

 

 

 

 

 

OTHER ASSETS:

 

 

 

 

 

 

 

 

Intangible Assets - Customer Lists, Net

 

 

3,979,824

 

 

 

1,929,294

 

Right of Use Asset - Office Leases

 

 

942,728

 

 

 

1,094,778

 

 

 

 

4,922,552

 

 

 

3,024,072

 

 

 

$

52,528,721

 

 

$

51,203,409

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDER'S EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current Portion of Contingent Earn-Out Liabilities

 

$

1,598,635

 

 

$

665,855

 

Current Obligation under Right of Use Asset - Office Leases

 

 

319,532

 

 

 

310,095

 

Accounts Payable and Accrued Expenses

 

 

1,788,382

 

 

 

4,983,496

 

Accrued Payroll and Related

 

 

779,985

 

 

 

836,915

 

Unearned Revenue

 

 

1,626,145

 

 

 

721,608

 

Rewards Program Liability

 

 

3,918,878

 

 

 

43,878

 

Sales Tax Payable

 

 

271,461

 

 

 

106,824

 

Note Payable - Wildman

 

 

162,358

 

 

 

162,358

 

 

 

 

10,465,376

 

 

 

7,831,029

 

 

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

 

 

Long-Term Contingent Earn-Out Liability

 

 

1,241,052

 

 

 

976,078

 

Long-Term Obligation under Right of Use Asset - Office Leases

 

 

623,196

 

 

 

784,683

 

 

 

 

1,864,248

 

 

 

1,760,761

 

 

 

 

 

 

 

 

 

 

STOCKHOLDER'S EQUITY:

 

 

 

 

 

 

 

 

Common Stock, $.0001 Par Value; 300,000,000 Shares Authorized, 19,139,330 and 19,753,852 Shares Issued and Outstanding as of June 30, 2022 and December 31, 2021, respectively

 

 

1,915

 

 

 

1,976

 

Additional Paid-In Capital

 

 

39,328,445

 

 

 

39,747,649

 

Retained Earnings

 

 

868,737

 

 

 

1,861,994

 

 

 

 

40,199,097

 

 

 

41,611,619

 

 

 

$

52,528,721

 

 

$

51,203,409

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND RETAINED EARNINGS
THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED)

 

 

Three Months
Ended

June 30,
2022

 

 

Three Months
Ended

June 30,
2021

 

 

Six Months
Ended

June 30,
2022

 

 

Six Months
Ended

June 30,
2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

$

14,806,904

 

 

$

8,583,201

 

 

$

27,066,487

 

 

$

16,127,392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF SALES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases

 

 

9,497,551

 

 

 

5,538,100

 

 

 

17,454,167

 

 

 

10,073,333

 

Freight

 

 

1,549,163

 

 

 

900,394

 

 

 

2,633,965

 

 

 

1,617,644

 

 

 

 

11,046,714

 

 

 

6,438,494

 

 

 

20,088,132

 

 

 

11,690,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

3,760,190

 

 

 

2,144,707

 

 

 

6,978,355

 

 

 

4,436,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and Administrative Expenses

 

 

4,232,170

 

 

 

2,998,574

 

 

 

8,256,388

 

 

 

5,644,031

 

 

 

 

4,232,170

 

 

 

2,998,574

 

 

 

8,256,388

 

 

 

5,644,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(471,980

)

 

 

(853,867

)

 

 

(1,278,033

)

 

 

(1,207,616

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME AND (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Expense

 

 

(23,781

)

 

 

-

 

 

 

(27,461

)

 

 

-

 

Other Income

 

 

8,519

 

 

 

770,062

 

 

 

99,114

 

 

 

770,062

 

Interest Expense

 

 

(2,411

)

 

 

(26,944

)

 

 

(6,142

)

 

 

(39,806

)

 

 

 

(17,673

)

 

 

743,118

 

 

 

65,511

 

 

 

730,256

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(489,653

)

 

 

(110,749

)

 

 

(1,212,522

)

 

 

(477,360

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR INCOME TAXES

 

 

(42,210

)

 

 

58,140

 

 

 

(219,265

)

 

 

(18,386

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(447,443

)

 

 

(168,889

)

 

 

(993,257

)

 

 

(458,974

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

$

(0.02

)

 

$

(0.05

)

 

$

(0.05

)

Diluted

 

$

(0.01

)

 

$

(0.02

)

 

$

(0.03

)

 

$

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,971,552

 

 

 

10,000,000

 

 

 

19,971,552

 

 

 

10,000,000

 

Diluted

 

 

31,683,717

 

 

 

10,000,000

 

 

 

31,683,717

 

 

 

10,000,000