Stran & Company Announces Completed Restatements of Financial Results for the 2022 and 2023 Fiscal Years

QUINCY, Mass., Jan. 22, 2025 (GLOBE NEWSWIRE) -- Stran & Company, Inc. ("Stran" or the "Company") (NASDAQ:SWAG) (NASDAQ:SWAGW), a leading outsourced marketing solutions provider that leverages its promotional products and loyalty incentive expertise, today announced the filing of its restated financial results for fiscal years 2022 and 2023.

Andy Shape, President and CEO of Stran, commented, "Over the past several months, we have been highly focused on completing the required restatement of our financial statements. Our focus has now shifted to the preparation and subsequent completion of our interim financial results. We appreciate the patience and support of our shareholders during this process."

"Our business fundamentals remain strong, and we have achieved significant milestones in 2024. Throughout the past year, we secured key contracts, including agreements with a leading recreational watercraft manufacturer and a premier U.S. pet supply retailer. These agreements highlight our strong market presence and the value of our integrated promotional marketing solutions. Additionally, we expanded agreements with multiple existing clients, each representing six-figure annual revenue potential. These clients span diverse industries, such as automotive, engineering, and oil and gas. Their decisions to renew contracts with Stran reflect our reputation for delivering high-quality, reliable services tailored to their specific needs, further illustrating our ability to meet the rigorous demands of global organizations."

"In November 2024, we acquired the assets of Gander Group, a move that strengthens our position in the casino continuity and loyalty sector. This acquisition enhances our capabilities by providing access to leading casinos, a broader product portfolio that features premium brand names, and improved service offerings. This aligns with our strategy to expand our reach within vertical specific industries and address the growing demands of our customers. We expect this acquisition to contribute to our long-term growth and market leadership."

"Looking ahead, we are refocusing on accelerating our growth strategy and expect to host a detailed conference call for shareholders in the near future. Most importantly, we are more confident than ever in the outlook for the business and believe we are well-positioned for success in 2025."

Restated Fiscal Year 2023 and 2022 Financial Results

Sales increased 31.3% to approximately $76.0 million for the year ended December 31, 2023, from approximately $57.9 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 assets of G.A.P. Promotions in January 2022, Trend Brand Solutions in August 2022, Premier NYC in December 2022, and T R Miller in June 2023 accounted for approximately $15.1 million, or 19.9%, of sales for 2023, compared to approximately $6.8 million, or 11.7%, of sales for 2022.

Gross profit increased 61.5% to approximately $24.9 million, or 32.7% of sales, for the year ended December 31, 2023, from approximately $15.4 million, or 26.6% of sales, for the year ended December 31, 2022. The increase in the dollar amount of gross profit was due to an increase in sales of approximately $18.1 million, partially offset by an increase in cost of sales of approximately $8.7 million. The increase in gross profit margin to 32.7% for the year ended December 31, 2023 compared to 26.6% for the year ended December 31, 2022, was primarily due to larger margins recognized on certain customer orders in excess of 40.0%, efficiencies gained in the sales process, and large write downs of inventory during the year ended December 31, 2022.

Net loss for the year ended December 31, 2023 was approximately $0.4 million, compared to approximately $3.5 million for the year ended December 31, 2022. This change was primarily due to the increase in sales during 2023 generated from the acquisition of the assets of G.A.P. Promotions, Trend Brand Solutions, Premier NYC, and T R Miller to approximately $15.1 million in aggregate, from approximately $6.8 million generated from the acquisition of the assets of G.A.P. Promotions, Trend Brand Solutions, and Premier NYC during 2022, and the increase of approximately $9.8 million from recurring organic sales during 2023 compared to 2022. These factors were partially offset by an increase in operating expenses and an increase in purchasing costs.

About Stran

For over 30 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 promotional programs manager 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 Company's periodic reports which are filed with the Securities and Exchange Commission. 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

[email protected]

Press Contact:

Howie Turkenkopf

[email protected]

BALANCE SHEETS
(in thousands, except share and per share amounts)
		December 31, 2023				December 31, 2022
		(Restated)				(Restated)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	8,059			$	15,254
Investments			10,393				9,779
Accounts receivable, net			16,223				13,750
Accounts receivable – related parties			853				—
Inventory			4,782				5,927
Prepaid corporate taxes			62				87
Prepaid expenses			953				387
Deposits			1,717				910
Total current assets			43,042				46,094
Property and equipment, net			1,521				1,000
OTHER ASSETS:
Intangible assets, net			3,114				2,238
Goodwill			—				90
Other assets			23				23
Right of use asset – office leases			1,336				785
Total other assets			4,473				3,136
Total assets		$	49,036			$	50,230
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses		$	4,745			$	4,049
Accrued payroll and related			2,568				610
Unearned revenue			1,116				633
Rewards program liability			875				6,000
Sales tax payable			344				365
Current portion of contingent earn-out liabilities			224				738
Current portion of installment payment liabilities			786				267
Current portion of lease liability			528				325
Note payable – Wildman			—				162
Total current liabilities			11,186				13,149
LONG-TERM LIABILITIES:
Long-term contingent earn-out liabilities			763				488
Long-term installment payment liabilities			639				414
Long-term lease liability			798				460
Total long-term liabilities			2,200				1,362
Total liabilities		$	13,386			$	14,511
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2023 and 2022			—				—
Common stock, $0.0001 par value; 300,000,000 shares authorized, 18,539,000 and 18,475,336 shares issued and outstanding as of December 31, 2023 and 2022, respectively			2				2
Additional paid-in capital			38,263				38,113
Accumulated deficit			(2,602	)			(2,217	)
Accumulated other comprehensive loss			(13	)			(179	)
Total stockholders' equity			35,650				35,719
Total liabilities and stockholders' equity		$	49,036			$	50,230

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2023 AND 2022
(in thousands, except share and per share amounts)
		2023				2022
		(Restated)				(Restated)
SALES
Sales		$	75,147			$	57,878
Sales – related parties			853				—
Total sales			76,000				57,878
COST OF SALES:
Cost of sales			50,492				42,493
Cost of sales – related parties			656				—
Total cost of sales			51,148				42,493
GROSS PROFIT			24,852				15,385
OPERATING EXPENSES:
General and administrative expenses			25,310				17,789
Goodwill impairment			810				1,182
Total operating expenses			26,120				18,971
LOSS FROM OPERATIONS			(1,268	)			(3,586	)
OTHER INCOME AND (LOSS):
Other income			186				34
Interest income			570				95
Change in fair value of contingent earn-out liability			65				180
Realized gain (loss) on investments			103				(1	)
Total other income			924				308
LOSS BEFORE INCOME TAXES			(344	)			(3,278	)
Provision for income taxes			41				222
NET LOSS		$	(385	)		$	(3,500	)
NET LOSS PER COMMON SHARE
Basic		$	(0.02	)		$	(0.18	)
Diluted		$	(0.02	)		$	(0.18	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
Basic			18,519,892				19,202,594
Diluted			18,519,892				19,202,594