Good morning, everyone, and welcome to the Stran & Company Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Alexandra Schilt. Alexandra, the floor is yours..

Thank you. Good morning, and thank you for joining Stran & Company's Year-End 2024 Financial Results and Business Update Conference Call. With us today are Andy Shape, Chief Executive Officer; and David Browner, Chief Financial Officer.

The company issued a press release yesterday, April 14, 2025, detailing its financial results for the year ended December 31, 2024. The release is also available on its website. If you have any questions following today's call or would like additional information, please contact Crescendo Communications at (212) 671-1020.

Today's remarks will include a review of Stran's financial and operational performance followed by a Q&A session. Please note that the company may make forward-looking statements during the call that involve risks and uncertainties, many of which are outside of its control.

We encourage you to review Stran's filings with the SEC for a full discussion of these risk factors. With that, I'll now turn the call over to Andy Shape. Please go ahead, Andy..

deliver high-impact, high-quality branded solutions in the most efficient and resilient way possible. I'd also like to briefly address the share of our -- the status of our share repurchase program. Due to trading restrictions related to the reaudit of our historical financials, we were unable to execute any share repurchases during 2024.

That said, Stran's Board previously authorized a $10 million share repurchase program. And as of year-end 2024, approximately $6.6 million of that authorization remains available. With 2024 audit process now behind us and a more stable operating environment ahead, we intend to resume our buyback efforts in 2025.

We view this as an important lever to enhance shareholder value and reflect our confidence in the company's long-term prospects. We view 2025 as a pivotal year, one in which we'll begin to fully realize the strategic investments made over the past 18 months.

I am confident that we're turning the corner towards more efficient, scalable and profitable phase of growth. With that, I'll now turn the call over to our CFO, David Browner, to walk through the financial results in more detail. David, please go ahead..

Thank you, Andy. Sales increased 8.8% to approximately $82.7 million for the year ended December 31, 2024, from approximately $76 million for the year ended December 31, 2023. Sales from the Stran segment decreased to approximately $72.7 million for the year ended December 31, 2024, from approximately $76 million for year ended December 31, 2023.

Sales from the Stran Loyalty Solutions segment increased to approximately $9.9 million from year ended December 31, 2024, from 0 in the year ended December 31, 2023. The increase in the total sales was primarily due to the acquisition of the Gander Group assets in August of 2024.

For the Stran segment, the decrease in sales was primarily due to lower spending from new and existing clients. For the SLS segment, the increase in sales was due to the acquisition of the Gander Group assets in August of 2024.

Gross profit increased 3.9% to approximately $25.8 million or 31.2% of sales for the year ended December 31, 2024, from approximately $24.9 million or 32.7% of sales for the year ended December 31, 2023.

Gross profit of the Stran segment decreased to approximately $23.7 million for the year ended December 31, 2024, from approximately $24.9 million for the year ended December 31, 2023. The gross profit of the SLS segment increased to approximately $2.1 million for the year ended December 31, 2024, from 0 in the year ended December 31, 2023.

The increase in the dollar amount for the total gross profit was primarily due to the acquisition of the Gander Group assets in August 2024.

For the Stran segment, the decrease in the dollar amount of the gross profit was due to the decrease in sales of approximately $3.3 million, which was primarily offset by a decrease in cost of sales of approximately $2.2 million.

For the SLS segment, the increase in the dollar amount of gross profit was due to the acquisition of the Gander Group assets in August of 2024.

The decrease in the total gross profit margin to 31.2% for the year ended December 31, 2024, compared to 32.7% for the year ended December 31, 2023 was primarily due to the acquisition of the Gander Group assets in August of 2024, which operates at a lower gross profit margin than the Stran segment.

The gross profit margin for the Stran segment remains unchanged at 32.9% for the year ended December 31, 2024 and 2023. The gross profit margin for the SLS segment was 20.8% at year-end December 31, 2024.

Operating expenses increased 17.6% to approximately $30.7 million for the year ended December 31, 2024, from approximately $26.1 million for the year ended December 31, 2023.

Operating expenses for the Stran segment increased to approximately $27.6 million for the year ended December 31, 2024, from approximately $26.1 million for the year ended December 31, 2023. Operating expenses of the SLS segment increased to approximately $3.1 million for year ended December 31, 2024, from 0 for the year ended December 31, 2023.

As a percentage of sales, operating expenses increased to 37.2% for the year ended December 31, 2024, from 34.4% for the year ended December 31, 2023. As a percentage of sales, operating expenses for the Stran segment increased to 37.9% for the year ended December 31, 2024, from 34.4% for year ended December 31, 2023.

As a percentage of sales, operating expenses for the SLS segment were 31.4% for the year ended December 31, 2024.

For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to expenses related to Stran's NetSuite enterprise resource planning system implementation, acquisition and integration of the Gander Group assets, and legal and accounting expenses related to the reaudit of historical financial statements.

For the SLS segment, the increase in dollar amount of the operating expenses was due to the acquisition of the Gander Group assets in August of 2024. Net loss for the year ended December 31, 2024, was approximately $4.1 million compared to approximately $0.4 million for year ended December 31, 2023.

This change was primarily due to the increase in operating expenses, including extraordinary professional fees related to the reaudit and successful completion of the acquisition of the Gander Group. At December 31, 2024, the company had approximately $18.2 million of cash, cash equivalents and investments and no long-term debt.

At this point, I'll turn the call back over to Andy..

Thank you, David. Before we open up the call to questions, I want to take a moment to recap what we've covered today. We made significant strides over the past year, successfully completing a complex but essential reaudit process that has strengthened our financial foundation and internal controls.

We delivered solid full year results, including $82.7 million in revenue, and completed the strategic acquisition of Gander Group, which has already begun to contribute meaningfully to our growth. We also secured new long-term client partnerships across diverse and high-potential industries.

Importantly, we achieved this growth while maintaining a strong balance sheet, a healthy cash position, no long-term debt and a scalable operating model that positions us well for the future.

As we look ahead, we're focused on execution, growing our core business, scaling our new SLS segment, expanding into new markets and driving operating efficiencies. We believe 2025 will be a transformational year for Stran, a true inflection point as we shift from a period of foundational investment to one of strategic acceleration.

Our team is energized, our platform is stronger than ever, and we are well positioned to lead in an evolving marketplace. While the broader macroeconomic environment remains uncertain with inflation, tariffs, global supply chain dynamics continue to present headwinds, we remain confident in our ability to adapt, deliver and grow.

Our diversified business, strong balance sheet and scalable infrastructure give us the resilience to thrive even in challenging conditions. Thank you again for joining us today and for your continued interest in Stran. With that, we'll now open up the call to questions.

Operator?.

[Operator Instructions] Our first question is coming from Bill Jordan of TSA Investments..

Congratulations on getting through that reaudit. I'm sure it was a major distraction for the company. Obviously, there were a lot of onetime expenses during the year.

As you look ahead, can you just provide some light on your goal to profitability this year coming forward?.

Sure. Yes, so thank you. Yes, that was a heavy lift on our end, and I'm really proud of our team for the resiliency that we put towards getting that reaudit done.

It took a lot of focus, energy, time and resources to put towards that, but it was a necessary step to maintaining and preserving shareholder value in the public company that we have and the long-term success. So we did put a lot of energy on that.

So in terms of our profitability efforts this year, first and foremost, the fees associated with the audit itself will inherently go down because we don't have to do a reaudit of nearly 3 years. Instead, we're in a cadence now. Our new audit firm knows more about our business.

We have outside consultants that understand our business and really have better process controls in place.

So first and foremost, those fees will drop significantly, both from a hard dollar, and then from a soft dollar perspective, it will allow myself as CEO, David as the CFO and our other executives to concentrate more on the operating business than on the reaudit.

So that allows us to go manage our OpEx, make adjustments where necessary as well as concentrate more on our revenue growth and profitability growth by driving margins, targeting additional customers and really looking towards growing the business. So those are some of the things that we're able to do for profitability.

And when we look at our goals this year, our goals are to continue to have revenue growth while driving revenue and creating operational efficiencies. And the final aspect is the final implementation of NetSuite.

So it's taken us years to implement NetSuite because we have combined over hundreds of years of -- with all the acquisitions together, of business working separately.

Now that we have NetSuite as our central hub for all that data to go into, it allows us to create efficiencies, create automation and really reduce some of the manual work that goes into some of the legacy business that we have that now we're able to automate and really create more efficiencies driven that.

So that's the first step was having NetSuite as our core base system to build off of, and we're really excited about the progress that we've made and the potential future efficiencies that we can gain for that. So hopefully, that answers your question about how we're going to really concentrate on reducing OpEx while continuing to maintain growth.

And that's the combination that we're looking for, as we continue to grow the company, increase our gross margin and increase our net margin by reducing operational expenses..

That was great. That cleared it up for me..

[Operator Instructions] I'm not seeing anyone else come into queue just at the moment. I can hand back over to the management team for any further comments..

Great. Well, thank you, everybody, for joining us. I'm glad to be back. It's been over a year since we've had an earnings call. It's exciting to be back explaining what Stran is doing and giving everyone visibility of what we're doing. Thank you for your support of Stran.

We're very excited about the rest of 2025, being able to get back to concentrating on our business, concentrating on growth, concentrating on reducing our operational expenses and gain operational efficiencies to really create long-term shareholder value. This is a business that's been in business for 30 years.

If we look at the macroeconomic trends that are happening right now, there's some uncertainty, but that's where we thrive.

We have thrived in the past, and we're looking -- and we're planning on doing that moving forward where we're well positioned with a strong team, a leadership team and a management team that knows how to really continue to grow business and capture market share when things may be uncertain, because we're not uncertain about the future of Stran.

There may be some very short-term uncertainty about the macroeconomic trends, but that doesn't deter us from the long-term value that we know Stran has and we're confident in. So we're very excited about 2025, being able to get back to work on what we do best.

And thank you for everyone supporting us and look forward to giving more reports in the future. Thank you for your time, and talk to you soon..

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation..