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 year ended December
31, 2021.
Andy Shape, President and CEO of Stran,
commented, “We are pleased to report revenue growth and
profitability for 2021. Overall, revenues increased over 5%;
however, our recurring organic sales, defined as those sales
excluding the U.S. Census program, revenue from the Wildman
Imprints asset acquisition, and personal protective equipment
(PPE), increased 49.5%, or $10.3 million, from $20.9 million in the
year ended December 31, 2020 to $31.2 million in the year ended
December 31, 2021. At the same time, our gross profit improved and
we achieved profitability for the full year. Heading into 2022 we
are off to a strong start and expect to achieve solid double digit
year-over-year organic growth in 2022. As an example, in January
2022 we signed a multi-year contract with a large nationally
recognized healthcare company to provide incentive products and
literature designed to help drive consumer health behaviors, which
we expect will drive significant revenue with potential expansion
opportunities. This new customer illustrates our shift from largely
transactional sales to program offerings with long-term recurring
revenue streams. In addition to broadening our customer base, we
are also deepening our penetration within existing customers, given
our compelling value proposition and comprehensive offering to
address the complex marketing needs of our customers. We are
especially encouraged by the macro trends, as employees return to
the workplace and there are more in-person events.”
“We also remain focused on accretive
acquisitions that would be highly synergistic with our existing
operations. As an example, we recently acquired GAP Promo, a
leading full-service promotional products agency that generated
over $7 million of sales in 2021. GAP Promo’s expertise in point of
sale, display, racks and more will expand Stran’s reach within the
beverage and consumer packaged goods sectors. We expect this
transaction to be highly accretive, given GAP Promo’s track record
of profitability and the anticipated economies of scale. Given our
premier reputation in the industry, including a growing roster of
Fortune 500 customers, we believe we are well positioned to expand
our market position as a leading provider of outsourced marketing
solutions. The promotional products industry alone is valued at
over $23 billion, and yet, the market is highly fragmented and
comprised of more than 40,000 providers. We believe the market is
ripe for consolidation, and our goal is to position Stran at the
forefront of the industry. In addition, we are expanding within the
broader $387 billion product packaging, loyalty incentive program,
printing and tradeshow markets.”
“We ended the year with over $32 million in
cash, approximately $40 million of working capital and no long-term
debt as of December 31, 2021. As a result, we believe we are well
capitalized to accelerate our growth strategy, including
investments in new sales and marketing initiatives, while
continuing our track record of profitability. Our solid cash
position also provides us flexibility and the ability, but not the
need, to leverage debt for acquisitions, which we believe is a
distinct competitive advantage in this market. Given the strength
of our balance sheet, we recently announced a share repurchase
program and expect to be in a position to utilize this in the near
future. We believe the current volatility in capital markets has
created a unique opportunity to drive value for our shareholders
through strategic and opportunistic use of this program. We could
not be more excited about the outlook for the business and believe
2022 will be a transformative year for the Company.”
Revenue for the year ended December 31, 2021
increased 5.2% to $39.7 million from $37.8 million for the year
ended December 31, 2020. The increase was primarily due to higher
spending from existing clients as well as business from new
customers. Additionally, we benefited from the acquisition of the
Wildman Imprints assets in September of 2020. However, these
increases in sales were partially offset by the completion of the
U.S. Census program in 2020, market saturation of personal
protective equipment in 2021, a lack of in-person events, and
businesses still not being fully reopened throughout 2021 as a
result of the COVID-19 pandemic. Gross profit increased 3.1% to
$11.8 million, or 29.8% of sales, for the full year 2021, compared
to $11.5 million, or 30.4% of revenue, for the same period last
year. The increase in gross profit was due to increased sales and
reduced cost of purchases from improvements in sourcing
capabilities and buying power, partially offset by an increase in
freight costs. Operating loss for the full year 2021 was $438,000,
compared to operating profit of approximately $1.5 million for the
same period last year. The shift from operating profit in 2020 to
operating loss in 2021 was due to an increase in operating
expenses, which in turn was due to additional expenses related to
the acquisition of the Wildman Imprints assets, the implementation
of a new ERP system, the recently completed initial public offering
and ongoing public company expenses, and organic growth in our
business. Net income for the year ended December 31, 2021 decreased
to approximately $235,000, compared to net income of approximately
$1.0 million for the same period last year. This decrease was
primarily due to the nonrecurrence of sales of $10.5 million from
our work on the U.S. Census program in 2020 and the nonrecurrence
of sales of $4.0 million from our work on personal protective
equipment in 2020; increased expenses in 2021 than in 2020 related
to our initial public offering; and higher freight expenses in 2021
compared to 2020. These factors were only partially offset by the
increase in sales from 2020 to 2021 of $6.0 million from our
September 2020 Wildman Imprints asset purchase and the increase of
$10.3 million from recurring organic sales from 2020 to 2021.
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 2021 fiscal year ended December 31, 2021, 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:
651623. A webcast of the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2855/44954 or on the
Company’s Investors section of the website: ir.stran.com.
A webcast replay will be available on the
company’s Investors section of the website (ir.stran.com) through
March 28, 2023. A telephone replay of the call will be available
approximately one hour following the call, through April 11, 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:
44954.
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, LLCTel: (212)
671-1021STRN@crescendo-ir.com
Press Contact:
Howie Turkenkopf press@stran.com
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
December 31, |
|
December 31, |
|
2021 |
|
2020 |
ASSETS |
CURRENT ASSETS: |
|
|
|
Cash |
$ |
32,226,668 |
|
$ |
647,235 |
Accounts Receivable, Net |
|
8,982,768 |
|
|
5,679,580 |
Deferred Income Taxes |
|
113,000 |
|
|
- |
Inventory |
|
5,230,792 |
|
|
2,499,049 |
Prepaid Corporate Taxes |
|
87,459 |
|
|
- |
Prepaid Expenses |
|
623,402 |
|
|
122,516 |
Security Deposit |
|
299,411 |
|
|
324,927 |
|
|
47,563,500 |
|
|
9,273,307 |
|
|
|
|
PROPERTY AND EQUIPMENT,
NET: |
|
615,837 |
|
|
449,972 |
|
|
|
|
OTHER ASSETS: |
|
|
|
Intangible Asset - Customer List, Net |
|
1,929,294 |
|
|
2,216,128 |
Due From Stockholder |
|
- |
|
|
6,748 |
Right of Use Asset - Office Leases |
|
1,094,778 |
|
|
1,358,517 |
|
|
3,024,072 |
|
|
3,581,393 |
|
$ |
51,203,409 |
|
$ |
13,304,672 |
|
|
|
|
LIABILITIES AND STOCKHOLDER'S EQUITY |
CURRENT LIABILITIES: |
|
|
|
Note Payable - Line of Credit |
$ |
- |
|
$ |
1,650,000 |
Current Portion of Long-Term Debt |
|
- |
|
|
153,133 |
Current Portion of Wildman Contingent Earn-Out Liability |
|
665,855 |
|
|
402,730 |
Current Obligation under Right of Use Asset - Office Leases |
|
310,095 |
|
|
299,765 |
Accounts Payable and Accrued Expenses |
|
4,983,496 |
|
|
3,267,933 |
Accrued Payroll and Related |
|
836,915 |
|
|
1,021,971 |
Corporate Income Taxes Payable |
|
- |
|
|
231,980 |
Unearned Revenue |
|
721,608 |
|
|
564,227 |
Rewards Program Liability |
|
43,878 |
|
|
173,270 |
Sales Tax Payable |
|
106,824 |
|
|
73,010 |
Note Payable - Wildman |
|
162,358 |
|
|
162,358 |
|
|
7,831,029 |
|
|
8,000,377 |
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
Long-Term Debt, Net of Current Portion |
|
- |
|
|
766,829 |
Long-Term Wildman Contingent Earn-Out Liability |
|
976,078 |
|
|
1,850,960 |
Long-Term Obligation under Right of Use Asset - Office Leases |
|
784,683 |
|
|
1,058,752 |
|
|
1,760,761 |
|
|
3,676,541 |
|
|
|
|
STOCKHOLDER'S EQUITY: |
|
|
|
Common Stock, $.0001 Par Value; 300,000,000 Shares Authorized, |
|
|
|
19,753,852 and 10,000,000 Shares Issued and Outstandingas of
December 31, 2021 and 2020, respectively |
|
1,976 |
|
|
1,000 |
Additional Paid-In Capital |
|
39,747,649 |
|
|
- |
Retained Earnings |
|
1,861,994 |
|
|
1,626,754 |
|
|
41,611,619 |
|
|
1,627,754 |
|
$ |
51,203,409 |
|
$ |
13,304,672 |
STATEMENTS OF EARNINGS |
FOR THE YEARS ENDED DECEMBER 30, 2021 AND
2020 |
|
|
|
Twelve Months EndedDecember 31,2021 |
Twelve Months EndedDecember 31,2020 |
|
|
|
|
SALES |
|
$ |
39,702,714 |
|
$ |
37,752,173 |
|
|
|
|
|
COST OF SALES: |
|
|
|
Purchases |
|
|
23,972,797 |
|
|
24,167,798 |
|
Freight |
|
|
3,893,847 |
|
|
2,099,511 |
|
|
|
|
27,866,644 |
|
|
26,267,309 |
|
|
|
|
|
GROSS PROFIT |
|
|
11,836,070 |
|
|
11,484,864 |
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
General and Administrative Expenses |
|
|
12,273,949 |
|
|
9,994,891 |
|
|
|
|
12,273,949 |
|
|
9,994,891 |
|
|
|
|
|
EARNINGS (LOSS) FROM
OPERATIONS |
|
|
(437,879 |
) |
|
1,489,973 |
|
|
|
|
|
OTHER INCOME AND
(EXPENSE): |
|
|
|
Other Expense |
|
|
(83,148 |
) |
|
- |
|
Other Income |
|
|
15,366 |
|
|
10,000 |
|
PPP Loan Forgiveness |
|
|
770,062 |
|
|
- |
|
Interest Expense |
|
|
(136,661 |
) |
|
(49,457 |
) |
|
|
|
565,619 |
|
|
(39,457 |
) |
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
|
127,740 |
|
|
1,450,516 |
|
|
|
|
|
PROVISION FOR INCOME
TAXES: |
|
|
(107,500 |
) |
|
422,236 |
|
|
|
|
|
NET EARNINGS |
|
|
235,240 |
|
|
1,028,280 |
|
|
|
|
|
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