2023 Stran & Company Inc Earnings Call

Operator: Greetings and welcome to the Stran & Co Fiscal 2023 Year-End Earnings Conference. At this time, all participants are in a listen-only mode. For a question and answer session, we'll follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Greetings and welcome to the Strawn and company fiscal 2023 year end earnings call.

At this time, all participants are on a listen only mode.

A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference.

Please press star zero on your telephone keypad.

Operator: 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, the floor is yours.

Please note this conference is being recorded.

I will now turn the conference over to your host Alexandra Shield, Vice President of Crescendo Communications Ma'am the floor is yours.

Alexandra Schilt: Good morning, and thank you for joining straughn and company's 2023 year end financial results and business update conference call on the call with US today are Andy shape, Chief Executive Officer, and David Brown, Our Chief Financial Officer.

Alexandra Schilt: Good morning, and thank you for joining Stran & Company's 2023 Year-End Financial Results and Business Update Conference Call. On the call with us today are Andy Shape, Chief Executive Officer, and David Browner, Chief Financial Officer. The company issued a press release today, March 28, 2024, containing its 2023 fourth quarter and year-end financial results, which are also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.

Alexandra Schilt: The company issued a press release today March 'twenty eight 'twenty 'twenty four containing its 2023 fourth quarter and year end financial results, which is also posted on the company's website. If you have any questions. After the call or would like any additional information about the company. Please contact crescendo communications at 212671.

Alexandra Schilt: 1020.

Alexandra Schilt: The Companys management will now provide prepared remarks, reviewing the financial and operational results for the three and 12 months ended December 31st 2023.

Alexandra Schilt: The company's management will now provide prepared remarks reviewing the financial and operational results for the three and 12 months ended December 31st, 2023. Before we get started, we would like to remind everyone that during this conference call, we may make forward-looking statements regarding the timing and financial impact of Stran's ability to implement its business plan, expected revenues, and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately, and many of which are beyond Stran's control. Please go ahead, Andy.

Alexandra Schilt: Before we get started we would like to remind everyone that during this conference call. We may make forward looking statements regarding timing and financial impact of strands ability to implement its business plan.

Alexandra Schilt: <unk> revenues and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond <unk> control.

Alexandra Schilt: That I will now turn the call over to Andy shape, Chief Executive Officer. Please go ahead Andy.

Andrew Shape: Thank you Allie and thanks to everyone for joining us today as we discuss the meaningful progress and milestones made throughout 2023.

Andrew Shape: Thank you, Allie, and thanks to everyone for joining us today as we discuss the meaningful progress and milestones made throughout 2023. First, I'm proud to report that we generated record sales of approximately $75.9 million in 2023, a 28.7% increase over the prior year. Additionally, our gross profit increased 50.2% to approximately $24.9 million, with our gross profit margin increasing to 32.8% compared to 28.1% for 2022. Most notably, we achieved profitability in 2023. As I previously mentioned, Stran has historically been profitable, and while we did not, we did report a loss for last year, as we integrated a number of acquisitions, we knew these acquisitions would be highly creative and beneficial for our shareholders.

Andrew Shape: First I'm proud to report that we generated a record sales of approximately $775 $9 million for 2023 or 28, 7% increase over the prior year.

Andrew Shape: Additionally, our gross profit increased 52% to approximately $24 $9 million with our gross profit margin increasing to 32, 8% compared to 28, 1% for 2022.

Andrew Shape: Most notably we achieved profitability for 2023 as I previously mentioned strong has historically been profitable and why we did not we did report a loss for last year as we integrated a number of acquisitions. We knew these acquisitions will be highly accretive and beneficial for our shareholders. We are now at an important inflection point within the company and are confident that we can.

Andrew Shape: We are now at an important flexion point within the company and are confident that we can sustain long-term profitability as a result of the successful execution of strategic growth initiatives implemented throughout the past few years. The improvement in operations is even more visible when you look at our fourth-quarter results. While our revenue increased by 27.5% to a record approximately $23.3 million for the fourth quarter, even more impressive, our gross profit increased 63.5% to approximately $8.7 million, and our gross margin increased 37 to 37.4% compared to 29.2% for the same period last year. You can get a really good picture of the operating leverage we're starting to gain when you look at our fourth quarter operating income, which increased 156% to approximately $1.1 million Our strategy is working, and we're firing on all cylinders.

Andrew Shape: Sustained long term profitability as a result of the successful execution of strategic growth initiatives implemented throughout the past few years.

Andrew Shape: The improvement in operations, even more visible when you look at our fourth quarter results, while our revenue increased by 27, 5% to a record of approximately $23 $3 million for the fourth quarter, even more impressive our gross profit increased 63, 5% to approximately $8 $7 million and our gross margin increased.

Andrew Shape: 37 to 37, 4% compared to 29, 2% for the same period last year.

Andrew Shape: You can get a really good picture of the operating leverage we are starting to gain when you look at our fourth quarter operating income, which increased 156% to approximately $1 $1 million versus $421000 for the same period last year. Our strategy is working and we're firing on all cylinders, we believe our substantial growth and increased profitability.

Andrew Shape: We believe our substantial growth and increased profitability stand as proof of the investments we've made alongside diligent expense management, validating the scalability and profit potential inherent in our business. And while I've been active on the M&A front, we are proud to have realized a 16.6% increase in organic revenue for 2023. Despite the challenging macroeconomic conditions during 2023, we have demonstrated our resilience, especially compared to many of our peers who experienced nominal growth or even declines in 2020. This achievement highlights our robust competitive position, expanding market presence, growth within existing client relationships, and the addition of a number of first-class customers that I'll talk about in a moment. On the M&A front, we closed the Tierra Miller acquisition in June of 2023, which was our fourth acquisition within less than two years and followed Gap Promotions, Trend Brand Solutions, and Premier NYC.

Andrew Shape: Stand as proof of the investments we've made alongside diligent expense management validating the scalability and profit potential inherent in our business.

Andrew Shape: And we have been active on the M&A front, we are proud to have realized a 16, 6% increase in organic revenue for 2023 <unk>.

Andrew Shape: Despite the challenging macroeconomic conditions. During 2023, we have demonstrated our resilience, especially compared to many of our peers, who experienced nominal growth or even declines in 2023.

This achievement highlights our robust competitive position expanding market presence growth within existing client relationships and the addition of a number of first class customers that I'll talk about in a moment.

Andrew Shape: On the M&A front, we closed the tier Miller acquisition in June of 2023, which was our fourth acquisition with less within less than two years, and followed GAAP promotions trend brand solutions and Premier N Y C E.

Andrew Shape: Each acquisition has delivered crucial strategic benefits to Stran and our operations, including the expansion of our geographic reach, bolstering our warehousing and manufacturing capabilities, expansion into specific verticals, and attracting esteemed clients to our already impressive portfolio. As previously mentioned, M&A has played a crucial role in our growth strategy, particularly given the conducive environment for consolidation within the promotional products and services industry. While we continue to actively explore potential M&A opportunities as they emerge, our primary focus is on nurturing our organic growth and optimizing the benefits of our existing... Currently, we are actively expanding into new verticals and geographic regions to bolster our growth trajectory. Moreover, our improved sales and marketing initiatives, including more targeted SEO and demand generation, combined with an experienced sales leadership team, are having a positive effect on our contract pipeline, evidenced by several new contracts announced during the year, as well as expanding contracts within existing clients. Specifically, we secured a six-figure contract with a leading medical group that specializes in the treatment of gastrointestinal disorders.

Andrew Shape: Each acquisition has delivered crucial strategic benefits distron in our operations, including the expansion of our geographic reach bolstering, our warehousing and manufacturing capabilities expansion into specific verticals and attracting a steam clients to our already impressive portfolio.

Andrew Shape: As previously mentioned M&A has played a crucial role in our growth strategy, particularly given a conducive environment for consolidation within the promotional products industry. While we continue to actively explore potential M&A opportunities as they emerge our primary focus is on nurturing our organic growth and optimizing the benefits of our existing acquisitions.

Currently we are actively expanding into new verticals and geographic regions to bolster our growth trajectory.

Andrew Shape: Moreover, our improved sales and marketing initiatives, including more targeted that she owned demand generation combined with an experienced sales leadership team are having a positive effect on our contract pipeline evidenced by several new contract and the contracts announced during the year as well as expanding contracts within existing clients.

Andrew Shape: Specifically was we secured a six figure contract with a leading medical group that specializes in the treatment of gastrointestinal disorders. This customer has over 200 locations throughout the United States and over 3000 employees. We have successfully launched a new marketing program for them and also provided holiday gifts for the 2023 season, well continue the supply of recruitment.

Andrew Shape: This customer has over 200 locations throughout the United States and over 3,000 employees. We have successfully launched a new marketing program for them and also provided holiday gifts for the 2023 season while continuing to supply recruitment gifts as well as new hire kits to employees. We also expanded our partnership with an existing online sports and entertainment client and introduced a loyalty redemption program tailored to their needs. This offering includes a blend of physical and experiential rewards aimed at incentivizing desired behavior.

As well as new higher kits to employees.

Andrew Shape: We also expanded our partnership with existing online sports and entertainment clients and introduced a loyalty redemption program tailored to their needs. This offering includes a blended blend of physical and experiential rewards aimed at incentivising desired behaviors. This program exemplifies one of several initiatives built a proud R E Commerce loyalty program platform.

Andrew Shape: This program exemplifies one of several initiatives built upon our e-commerce loyalty program platform, which encompasses every aspect of client and consumer engagement, from concept development to production, technology integration, logistics, inventory management, fulfillment, and reporting. Our goal is to ensure a seamless experience for both the client and their customers. In the first week alone, this program generated over 22,000 orders, resulting in sales exceeding $2,000,000.

Andrew Shape: Which encompasses every aspect of client and customer and consumer engagement from concept to development to production technology integration logistics inventory management fulfillment and reporting our goal is to ensure a seamless experience for both the client and their customers within the first week alone. This program generated over 22000 order.

Andrew Shape: Resulting in sales exceeding $2 million.

Andrew Shape: The program successfully delivered over 51,000 orders, generating over $4,000,000 in total sales. We are excited about the ongoing execution of this program for our client and are eager to explore similar opportunities within other, Additionally, we were contracted by a multinational direct selling beauty products company to provide incentive merchandise to assist in growing the customer's North American loyalty program. We successfully launched their custom-branded e-commerce merchandise store during the first quarter of 2023 for the North American market and are actively exploring how we can support their international clientele as well. With their global reach and community exceeding 4 million beauty influencers worldwide, we are delighted to have been chosen to assist in expanding their loyalty program by offering incentive merchandise to their North American customers. We also continue to launch new online stores for customers and are now actively managing over 280 online customer stores. These provide long-term value for our customers, as well as easy and simple access to the product.

Andrew Shape: Program successfully delivered over 51000 orders generating over $4 million in total sales. We are excited about the ongoing execution of this program for our client and are eager to explore similar opportunities within other clients.

Andrew Shape: Additionally, we were caught your dry contracted by multinational direct selling beauty products company provide incentive merchandize to assist in growing the customers North American loyalty program, we successfully launched their custom branded ecommerce merchandize store during the first quarter of 2023 for the North American market and are actively exploring how we can support their international.

Andrew Shape: Clientele as well with our global reach and community exceeding 4 million beauty Influencer World Influencers worldwide. We are delighted to have been chosen to assist in expanding their loyalty program by offering incentive merchandize to their north American customer base.

Andrew Shape: We also continue to launch new online stores for customers and are now actively managing over 280 online customer stores. These provide long term value for our customers as well as easy and simple access to the products.

Andrew Shape: In addition, considering the growth trajectory, we are experiencing we have hired and promoted key personnel.

Andrew Shape: In addition, considering the growth trajectory we are experiencing, we have hired and promoted key personnel. First, we officially promoted David Browner to the position of Chief Financial Officer after serving as our interim CFO for almost a year, as well as holding other key financial roles since becoming part of the Stron Team in 2012. We have witnessed his management, operational, and financial skills and appreciate his significant contributions to the company's growth and integration of several acquisitions. Given his long relationship with the company and his background, David is a valued member of our leadership. Following David, we made strategic hires and filled key positions, including Chief Information Officer, Executive Vice President of Sales, and Senior Vice President of Client Strategy. Ian Wall, an experienced Information Technology executive, now serves as our Chief Information Officer. Given his extensive experience in implementing technology differentiators, both internal and customer-facing, while working at Harvard and Tufts in the education sector and Virtex and Biogym in the pharmaceutical industry, Ian has added significant value to our team. We're actively working to fully implement NetSuite into our operations, along with other e-commerce initiatives using Adobe's e-commerce platform, Magento Open Source.

Andrew Shape: First we officially promoted David Brown or to the position of Chief Financial Officer, after serving as our interim CFO for almost a year as well as holding other key financial roles since becoming part of a strong team in 2012.

Andrew Shape: We have witnesses management operational and financial skills and appreciate his significant contributions to the company's growth and integration of several acquisitions given his long relationship with the company and background, David as a valued member of our leadership team.

Andrew Shape: Following David we made strategic hires in filled key positions, including Chief Information Officer Executive Vice President of sales and senior Vice President of client strategy.

Andrew Shape: And wall and experienced information technology. The executive now serves as our Chief Information Officer.

Andrew Shape: Given his extensive experience in implementing technology differentiators, both internal and customer facing while working at Harvard and tough in the education sector, and vertex and Biogen and the pharmaceutical industry. You're in has added significant value to our team.

Andrew Shape: We're active work are actively working to fully implement that suite into our operations along with other ecommerce initiatives using adobe's ecommerce platform Magenta open source and Ian brings the firsthand experience a deep skill set utilizing both of these platforms that will allow us to maximize our technology investments and improve the overall efficiency of our business.

Andrew Shape: And Ian brings first-hand experience and a deep skill set in using both of these platforms that will allow us to maximize our technology investments and improve the overall efficiency of our business. Additionally, Ian demonstrated his ability to leverage technology to enhance operations, improve efficiency, and strengthen the customer experience by implementing NetSuite and other innovative technologies at his previous position. We are proud to have Ian on our executive team. Nick Kiefer now serves as our Executive Vice President of Sales, and Michelle Pitlinski is our Senior Vice President of Client Strategy. Both Nick and Michelle are promotional products industry veterans and collectively bring decades of industry sales experience to our company.

Andrew Shape: Additionally, Ian demonstrated his ability to leverage technology to and hence operations improve efficiency and strengthen strengthen the customer experience by implementing that suite and other innovative technologies at his previous positions. We are proud to have Ian on our executive team.

Andrew Shape: Nick Keefer now serves as our executive Vice President of sales and Michelle pit Lynskey is our senior Vice President of client strategy, both Nick and Michelle our promotional products industry veterans and collectively bring decades of industry experience sales experience to our company.

Andrew Shape: Our goal is to build on our strong foundation, and we believe these industry professionals will enable us to better capitalize on significant opportunities within the market. Nick and Michelle have successful track records of implementing strategic-scale strategies to further penetrate customers and growth, and we are proud to welcome them to our sales team. Importantly, as a result of our ongoing efforts, we have continually been recognized in the industry, and I'm honored to jump 21 places to 24th in the Advertising Specialty Institute's 2023 Annual Listing of the Most Powerful People in the Promotional Product Industry, which follows our top 40 distributor ranking. In addition, I'm proud to say that I was named the 2023 Counselor Person of the Year by ASI.

Andrew Shape: Our goal is to build on our strong foundation and we believe these industry professionals will enable us to better capitalize on significant opportunities within the market, making Michel if successful track records of implementing strategic scale strategies to further.

Andrew Shape: Penetrate customers and growth and we are proud to welcome them to our sales team.

Importantly, as a result of our ongoing efforts, we've continually been recognizing the industry and I'm honored to jumped 21 places to 24th in the advertising specialty Institute's 2023 annual listing of the most powerful people in the promotional project product industry, which follows our top 40 distributor ranking in addition.

Andrew Shape: I'm proud to say that I was named the 2023 counselor person of the year by ASI.

Andrew Shape: ASI serves a network of 25,000 suppliers, distributors, and decorators in the $26.1 billion promotional products industry, and being acknowledged with their awards validates our progress, including accelerated revenue growth and our ongoing business efforts to become an even more recognizable leader within the industry. Overall, we have implemented and continue to follow a carefully crafted growth strategy. This strategy has led to profitability for 2023, along with securing new contracts, improving business operations, and introducing new technology offerings. As I mentioned earlier, the improvements in our operations and increased efficiency are being more evidenced by our impressive fourth quarter results. We remain dedicated to our growth strategy and are confident that we will solidify our position as a leader in the $26 billion promotional products industry.

Andrew Shape: <unk> serves a network of 25000 suppliers distributors and decorators and the $26 $1 billion promotional products industry and being the knowledge with their awards validates our progress.

Andrew Shape: Including accelerated revenue growth and our ongoing base business efforts to become an even more recognizable leader within the industry.

Andrew Shape: Overall, we have implemented and continue to follow a carefully crafted growth strategy. This strategy has led to profitability for 2023, along with securing new contracts improving business operations and introducing new technology offerings.

Andrew Shape: As I mentioned earlier, the improvements in our operations and increase efficiency or even more evidenced by our impressive fourth quarter results.

Andrew Shape: We remain dedicated to our growth strategy and are confident that we will sell lithify our position as a leader in the $26 billion promotional products industry.

Andrew Shape: At the same time, we have preserved a strong balance sheet with $18.5 million in cash and investments as of December 31, 2023. Excluding our rewards program liabilities, we maintain cash investments of approximately $17.6 million as of December 31, 2023, compared to approximately $19 million as of December 31, 2022, demonstrating our ability to simultaneously maintain strong growth while prudently managing our cash.

Andrew Shape: At the same time, we have preserved our strong balance sheet with $18 $5 million in cash and investments as of December 31, 2023, excluding rewards.

Andrew Shape: Our reward program liabilities, we maintain cash and investments of approximately $17 $6 million as of December 31, 2023, compared to approximately $19 million as of December 31, 2022.

Andrew Shape: Demonstrating our ability to simultaneously maintained strong growth while prudently managing our cash. These funds continue to provide us with the flexibility to explore strategic opportunities as they arise.

David Browner: These funds continue to provide us with the flexibility to explore strategic opportunities as they arise. In summary, our objective is to continue to execute our growth strategy. This includes innovating, investing in technology, launching sales and marketing initiatives to deepen our client relationships, and selectively pursuing acquisitions to support our expanding operation. At this point, I'd like to turn the call over to our Chief Financial Officer, David Browner, to go over the financials in detail. David, please go ahead.

Andrew Shape: In summary, our <unk>. Our objective is to continue to execute our growth strategy. This includes innovating investing in technology launching sales and marketing initiatives initiatives to deepen our client relationships and selectively pursuing acquisitions to support our expanding operation.

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

David Browner: Thank you Andy.

David Browner: Thank you, Andy. Sales increased 28.7% to approximately $75.9 million for the year ended December 31, 2023, from approximately $59 million for the year ended December 31, 2022. The increase was primarily due to higher spending from existing clients as well as business from new customers. Additionally, the acquisitions of the Gap Promotions assets in January 2022, the Trend Brand Solutions assets in August of 2022, the Premier NYC assets in December 2022, and the T.R. Miller assets in January 2023 accounted for approximately 14.7 million or 19.4% of sales for 2023, compared to approximately 6.5 million or 11% of sales for 2022, reoccurring organic sales defined as sales excluding revenue from acquisitions of the assets from each of Gap Promotions, Trend Brand Solutions, Premier NYC, and TR Miller increased 16.6% or approximately $8.7 million to approximately $61.2 million for year ended December 31, 2023, compared to approximately $52.5 million for year ended December 31, 2022.

David Browner: Sales increased 28, 7% to approximately $75 9 million for the year ended December 31, 2023 from approximately $59 million for the year ended December 31 2022 the.

David Browner: The increase was primarily due to higher spending from existing clients as well as business from new customers.

David Browner: Additionally, the acquisitions of the GAAP promotions assets in January 2022, the trend brand solutions assets in August of 2022.

David Browner: The Premier NYSE assets in December 2022, and the tier Miller assets in January 2023 accounted for approximately $14 7 million or 19, 4% of sales for 2023 compared to approximately $6 5 million or 11% of sales for 2022.

David Browner: Reoccurring organic sales defined as sales excluding revenue from acquisitions of the assets from each of GAAP promotions trend brand solutions Premier NYSE in T. R. Miller increased 16, 6% or approximately $8 7 million to approximately $61 2 million for year ended December.

David Browner: 31, 2023 compared to approximately $52 5 million for year ended December 31 2022.

David Browner: Gross profit increased 50.2% to approximately $24.9 million, or 32.8% of sales for the year ended December 31, 2023, from approximately $16.6 million, or 28.1% of sales for the year ended December 31, 2022. The increase in the dollar amount of gross profit was due to increased sales partially offset by an increase in purchasing and freight costs. Net income for the year ended December 31st, 2023 was $35,000 compared to a net loss of $778,000 for the year ended December 31st, 2022.

David Browner: Gross profit increased 52% to approximately $24 9 million or 32, 8% of sales for the year ended December 31, 2023 for approximately $16 6 million or 28, 1% of sales for the year ended December 31 2022.

David Browner: The increase in the dollar amount growth of profit was due to increased sales, partially offset by an increase in purchasing and freight costs.

David Browner: Net income for the year ended December 31, 2023 was 35000 compared to a net loss of 778000 for year ended December 31, 2022. This change was primarily due to the increase in sales. During the year ended December 31, 2023, partially offset by an increase in operating expense.

Andrew Shape: This change was primarily due to an increase in sales during the year ended December 31st, 2023, partially offset by an increase in operating expenses. At December 31, 2023, the company had approximately $18.5 million in cash and investments and no long-term debt. At this point, I'll turn the call back over to David. We take great pride in the achievements we've accomplished thus far, including profitability, securing new contracts, and raising STRON's visibility. Most importantly, we are beginning to realize greater efficiency and economies of scale that will continue to enhance our profitability. We eagerly anticipate further benefits from our growth initiatives, and we'll share updates as they develop. I'd like to thank you for joining the call today. At this point, we would like to open up the call to questions. Operator.

David Browner: <unk>.

David Browner: At December 31, 2023, the company had approximately 15 point are $18 5 million in cash and investments and no long term debt.

David Browner: At this point I'll turn the call back over to Andy.

Andrew Shape: Thank you David we take great pride in the achievements, we have accomplished thus far including profitability, securing new contracts and raising strong visibility. Most importantly, we are beginning to realize greater efficiency and economies of scale that we're continue to enhance our profitability. We eagerly anticipate further benefits from our growth initiatives and will share.

None: <unk> as they develop I'd like to thank you for joining the call today at this point, we'd like to open it up to open up the call to questions operator.

None: Thank you.

Operator: Thank you. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keyboard. A confirmation tone will indicate your line is in the question. You may press star 2 if you would like to remove your question, and for participants using speaker equipment.

None: This time, we will be conducting a question and answer session.

None: If you'd like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate your line is in the question queue.

None: Press Star two if.

None: We'd like to remove your question from the queue.

None: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: It may be necessary to pick up your handset before pressing the, One moment please, while we pull for questions. Thank you. We have a question from Bill Jordan, who is a private. Your line is. Thank you.

None: One moment, please while we poll for questions.

None: Thank you we have a question from bill.

None: Bill Jordan, who is a private investor your line is life.

Bill Jordan: Thank you Andy Congratulations on the solid results just have a couple of questions for you.

Bill Jordan: Andy, congratulations on the solid results. I just have a couple of questions for you. You made some new hires this year. Can you give us any more kind of background on the people that you hired and why? Sure. I'll go in order.

Bill Jordan: You made some new hires this year can you give us anymore kind of.

Bill Jordan: Background on the people that you hired in Hawaii.

Bill Jordan: Sure.

Bill Jordan: So I'll go in order the first one that we discussed as Ian wall for our CIO Chief invest our Chief Information Officer, We're really excited to have an on board. He worked within the education and pharmaceutical sectors are very smart individual that has extensive background with both.

Andrew Shape: The first one that we discussed is Ian Wall as our CI chief investor or chief information officer. We're really excited to have Ian on board. He worked in the education and pharmaceutical sectors; a very smart individual that has an extensive background in both implementing ERPs like NetSuite, SAP, and other ERPs similar to what we're implementing for Stran right now to create more efficiencies as well as integrating that with e-commerce so that they're seamlessly attached to one another.

Bill Jordan: Implementing ERP like net suite.

Bill Jordan: And in other ERP is similar to what we're implementing for strong right now to create more efficiencies as well as integrating that with e-commerce.

Bill Jordan: So that theyre seamlessly.

Bill Jordan: Tach to one another and again looking to make it easier for our customers to do business with us on a technology front and easier for our employees to.

Andrew Shape: And again, looking to make it easier for our customers to do business with us on a technology front and easier for our employees to process those orders and run the operations of the business. So we're really excited about Ian and we're excited to have him take over the reins to lead our technology initiative as well. Additionally, we hired Nick Kiefer as our VP of Senior Vice President of Sales. Nick's a true pro within the promotional products industry, helping companies grow from midsize companies to large players within the industry.

Bill Jordan: Process those orders in and.

Bill Jordan: Run the operations of the business. So we're really excited about in and.

Bill Jordan: We're excited to have him take over the reins to lead our technology initiatives well into the future. Additionally, we hired.

Bill Jordan: Nick cheaper as our VP of senior Vice President of sales mix, a true pro within the promotional products industry, helping companies grow from.

Bill Jordan: Mid sized company to large players within the industry, we recruited and brought him onboard because of his ability to be a strong leader within our sales organization.

Andrew Shape: We recruited Nick and brought him on board because of his ability to be a strong leader within our sales organization. We have over we have about approximately 36 sales reps and approximately 30 internal reps that roll up to him. And we're really excited because he's really helping them expand their business, maximize their potential through leadership coaching and strategic initiatives. So we're really excited about Nick, and working alongside Nick is Michelle Pitlitsky, who is the VP of client success. And really, what we're trying to ensure that as we have clients, we've been in business for almost 30 years, we have a great reputation, and our clients really enjoy doing business with us. We actually recently did a survey where our net promoter score was over 70, close to 75.

Bill Jordan: We have over we have about approximately 36 sales reps and approximately 30 internal reps that roll up to him.

Bill Jordan: And we're really excited because he's really helping them expand their business maximize their potential through leadership coaching and strategic initiatives. So we're really excited about Nick and alongside with Nick as Michelle pit Lipski.

Bill Jordan: Who is the VP of client success and really what we're trying to ensure that.

None: We have clients we've been in business for almost 30 years, we have a great reputation our clients really enjoy doing business with us we actually recently did a survey where our net promoter score was over.

None: Over 70 close to 75, so our customers are very <unk>.

Andrew Shape: So our customers are very happy with the business that we're doing. It's Michelle's job to ensure that we continue to do that as we grow and put our customers first and make sure that we keep them long term. So those were some of the biggest hires that we've had so far, last year and the beginning of this year. And we're really excited about that. In addition to David Browner, obviously, being promoted to full-time CFO. David's been amazing and understands our business and this industry better than almost anyone I've ever met. So I'm really proud of what David has grown into as a leader within Stran as well as the information that he's been able to share with our entire organization. Thanks, that was really helpful.

None: Happy with the business that we're doing it to michelle's job to ensure that we continue to do that as we grow and put our customers first and make sure that we keep them long term. So those are some of the biggest hires that we've had so far.

None: Last year and beginning of this year and we're really excited about that are in addition to David Brown are obviously being promoted to full time, CFO and David's been amazing in and understand our business and this industry better than almost anyone I've ever met so I'm really proud of what David has grown into as a leader within strong as well as the information that is.

None: Been able to share with our entire organization.

None: It's not exactly that was really helpful. You talked a little bit about M&A. What are your thoughts on M&A going into 2024, and you know just general M&A within your industry.

Andrew Shape: You talked a little bit about M&A. What are your thoughts on M&A going into 2024? And, you know, just general M&A within your industry? Sure.

None: Sure. So M&A as we'd mentioned we've done four acquisitions in the last just about two years. So although we're not pausing M&A by any means we're not as active as we were in say 2022 and 2023, because we've acquired all of those companies. Our goal is to make sure that we integrate them properly.

Andrew Shape: So M&A, as we've mentioned, we've done four acquisitions in the last just about two years. So although we're not pausing M&A by any means, we're not as active as we were in say 2022 and 2023 because we've acquired all of those companies. Our goal is to make sure that we integrate them properly, as well as maximize their potential. So we're actively looking I'm looking within the industry. I'm looking at other types of companies that we have plenty of discussions with, but we're being a little bit more selective and patient in terms of the industry.

None: As well as.

None: Maximize their potential so we're actively looking I'm I'm looking within the industry I'm looking.

None: Other types of companies that we have plenty discussions with but we're being a little bit more selective and patient in terms of the industry. I think this industry will continue to consolidate.

Andrew Shape: I think this industry will continue to consolidate since there are so many players. It's a $26 billion industry with over 25,000 companies within it. I think consolidation will continue to happen, and we look to be a leader within that consolidation. But just selectively, things that work to increase the value of our business both short-term and long-term. Great. Just two other questions.

None: Consolidate since theres. So many players there's it's a $26 billion industry with over 25000 companies within it.

None: Consolidation will continue to happen and we look to be a leader within that kind of consolidation.

None: But just selectively that things at work too.

None: Increase the value of our business, both short term and long term.

None: Great.

None: Just two other question how is your pipeline and just the general business.

Andrew Shape: How is your pipeline and just general business as you swing into 2024 now? Businesses: our pipeline is great. We have a lot of momentum. We've seen a lot of those sales efforts that I mentioned with Nick and Michelle in place with our marketing efforts. Really, we're starting to see some results with a lot more opportunities, large opportunities, RFPs that we're working on that we've seen a lot of, finding both new business as well as expanding our business. So we feel like our pipeline is very strong. We're expecting to see growth within 2024. People are with interest rates being where they are right now, but with the hope of them potentially coming down, I think people will continue to spend.

None: Swing into 2024 now.

None: The business is is our pipeline is great. We have a lot of momentum we've seen a lot of those sales efforts that I had mentioned with Nick and Michelle in place with our marketing efforts really are we're starting to see some results with a lot more opportunities large opportunities rfps that we're working on that we've seen a lot finding both new business as well as expanding our business.

None: So we feel like our pipeline is very strong.

None: We're expecting.

None: To see growth within 2024.

None: People are are with interest rates being where they are right now, but with the hope of them potentially coming down I think people will.

None: Continue to spend so we're excited about our momentum that we have right now that we're seeing within within the first quarter. Historically, you know our seasonality within our business.

Andrew Shape: So we're excited about the momentum that we have right now that we're seeing within the first quarter. Historically, you know, our seasonality within our business, Q1 is typically the slowest, followed by Q2, Q3, and Q4. It continues to ramp up throughout the year. But, you know, we're excited, and our pipeline is pretty strong right now. So we're excited about it. That's great. Last question. Did you experience some impressive gross margin improvement in the fourth quarter and for the year 2023? What do you see?

None: Q1 is typically the slowest followed by Q3 Q2, Q3 and forward it continues to ramp up throughout the year, but.

None: We're excited and our pipeline is pretty strong right now so we're excited about about <unk> about that.

None: That's great last question you experienced some impressive gross margin improvement in the fourth quarter and for the year 2023.

None: What do you see is this sustainable and what should shareholders or investors expect going forward with margin yeah.

Andrew Shape: Is this sustainable? And what should shareholders or investors expect going forward with margins? Yeah, that's, you know, in 2023, we really made a conscious effort to identify ways to create more profitability. And there are a couple different ways to do that. One is to increase our margin, selectively where it makes sense where we're still competitive, and offering value to our customers, but also not giving away our products. So we made a conscious effort to educate and work with our team, our sales and service teams, to ensure that we're charging appropriately to our customers and not, you know, not working at below industry average margins. So that was the first thing that we did, worked on education, as well as monitoring and enforcing actions related to working at appropriate gross margins.

None: Yeah. That's you know in in 2020 three we really made a conscious effort to identify ways to create more profitability and there's there's a couple of different ways to do that one is increase our margin.

None: Selectively where it where it makes sense, where we are still competitive.

None: And offering value to our customers, but also not giving away our products. So we made a conscious effort to educate and work with our team our sales and service teams to ensure that we're charging appropriately to our customers and not not working at below industry average margins. So that was the first thing that we did is work.

None: On education, as well as monitoring and enforcing actions related to working at appropriate gross margins and secondarily. We also worked on better purchasing and buying.

Andrew Shape: And secondarily, we also worked on better purchasing and buying, negotiating better prices, negotiating better rebates, and just being more conscious of where we spend and how we spend it. So those two things combined, I think, were a result of us looking at those a little bit harder and monitoring enforcement actions related to that within our organization, as well as just more visibility into that. So we do want to continue to increase our margins and see those steadily above 30%. For gross profit margins,

None: Negotiating better pricing negotiating better rebates, and just being more conscious of where we spend and how we spend it. So those two things combined I think.

Well it was a result of us looking at those a little bit harder and monitoring enforcing actions related to that within our organization as well as.

None: Just more visibility into that so we do want to continue to increase our margins and see those steadily above 30%. So for gross profit margin. So that's our goal moving forward is to maintain that so were hoping to two <unk>.

Andrew Shape: So that's our goal. Moving forward is to maintain that. So we're hoping to continue with that and show our shareholders that we can... Great, thanks. That's all I got.

None: Continue with that and show our shareholders that we can continue to do that.

None: Great. Thanks Gar good that's all I got congratulations on the results again.

Andrew Shape: Congratulations on the results. Great, thank you. Thank you. Once again, ladies and gentlemen, if you have any questions or comments, please press star one on your phone at this time. Okay, as we have no further questions in the queue at this time, I will pass it back over to Mr. Shape for any closing comments.

None: Great. Thank you.

None: Thank you once again, ladies and gentlemen, if you have any questions or comments. Please press star one on your phone at this time.

None: Okay as we have no further questions in the queue at this time.

None: Pass it back over to Mr shape for any closing comments you may have.

Andrew Shape: Great, thank you everyone for joining us. We're excited about the results for 2023. We are very proud of the results that we had in Q3 and Q4. That really made a huge impact and turned us profitable. We just feel that that shows that, long term, we can sustain that we can identify when we need to create more profitability and use our capital that we have to our advantage. It's a major advantage to us within this industry to have the capital that we have to invest in our business to grow.

Andrew Shape: Great. Thank you everyone for joining we're excited about the results for 2023, we made we're very proud of the.

Andrew Shape: Results that we had in Q3 and Q4.

Andrew Shape: That really made a huge impact and turned us profitable are we just feel that that shows that long term. We can sustain that we can identify when we need to.

Andrew Shape: Create more profitability and use.

Andrew Shape: Use our capital that we have to our advantage. It's a major advantage to us within this industry to have the capital that we have to go invest in our business to grow and we're excited to continue to do that and show our investors how to continually add value too strong. So thank you for joining and excited to show what we can do next thank you.

Operator: And we're excited to continue to do that and show our investors how to continually add value to STRON. So thank you for joining us and we are excited to show what we can do next. Thank you. Thank you. This does conclude today's conference, and you may disconnect your lines at this time. And we thank you for your participation.

None: Thank you. This does conclude today's conference and you may disconnect. Your lines at this time and we thank you for your participation.

None: Yeah.