Stran & Company, Inc.

Good morning, and welcome to the Strand and Company first quarter 2023 earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. If you would like to join the queue at any time, you may press star 1 on your telephone keypad. If you wish to remove yourself from queue, you may press star 2. It is now my pleasure to turn the floor over to your host, Alexandra Schilt. Alexandra, the floor is yours.

Good morning, and thank you for joining Strawn & Company's 2023 First Quarter 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, May 15, 2023, containing its 2023 First Quarter 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 212-671-1020. The company's management will now provide prepared remarks reviewing the financial and operational results for the three months ended March 31, 2023. 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 STRON'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 STRON's control. With that, we will now turn the call over to Andy Shape, Chief Executive Officer. Please go ahead, Andy.

Thank you, Allie, and thanks everyone for joining us today as we discuss the meaningful progress made during the first quarter of 2023. As a result of continually executing on our growth strategy, including organic growth and M&A, we reported an approximate 29% increase in revenue to $15.8 million for the first quarter of 2023. Importantly, we also achieved organic growth of approximately 18% over the same period last year. This is notable because many other companies in our industry are contracting, given the current market environment and pressure on marketing budgets. We believe the fact we have maintained strong organic growth reflects our increasing market share and the diversification of our customer base across multiple industries, including gaming and healthcare, which tend to be more steady regardless of the economic environment. I'd also like to note that historically, the first quarter is our slowest quarter in the year, given our customers' business cycle and planning budgets, are usually still being finalized. However, our increased year-over-year sales for the quarter reflects the increased spending for both existing and new customers. We also achieved 46.5% increase in gross profit to approximately $4.7 million. Gross margin increased from 26.3% of revenue in the first quarter of 2022 to 29.8% this quarter, reflecting a reduction in our purchasing and freight costs as a percentage of sales. The improved margin can be attributed to greater buying power as we continue to gain scale, as well as easing supply chains. We spent much of 2022 focusing on ways to improve our gross margins and believe we are beginning to experience the benefits of those efforts. Although we reported a loss for the quarter, this was due in part to temporary expenses related to the integration of our three recent acquisitions. We are also absorbing costs related to the implementation of NetSuite, our ERP system, as well as expenses related to our lead generation program. However, we believe these investments will support our continued growth and will decrease over time. As we continue to grow revenue and leverage our fixed costs, we expect a return to profitability. At the same time, we have maintained a strong balance sheet with over $20 million of cash and investments, allowing us to continue to execute our growth initiatives, including M&A. We believe that our strong cash position combined with no debt will provide a competitive advantage as we continue to scale our business organically and through acquisitions. Towards this end, we announced signing a definitive agreement to acquire T.R. Miller in January, our largest acquisition to date. This is an important milestone as it significantly enhances our operational fulfillment capabilities with their 20,000-square-foot distribution and processing center. With their extensive experience spanning over 47 years, combined with the implementation of our technologies and marketing, we believe we can enhance their business while assisting in the overall growth of STRON. We expect to complete the acquisition during the second quarter and report details appropriately. While discussing M&A, I'm proud to report that we continue to effectively integrate our previous announced acquisitions of Premier NYC, TrendBrand Solutions, as well as Gap Promo, all of which we believe will provide important and unique advantages to Strong. In terms of future acquisitions, at the moment we are focusing on closing and integrating TR Miller. However, given the lead time required to identify and complete due diligence on targets, We continue to actively explore potential M&A opportunities that can be complimentary and accretive to our business. In addition, we continue to secure new customers as well as expand existing customer relationships. Specifically, in February, we were contracted by a multinational direct-selling beauty product company. This customer sought us out to provide effective incentive merchandise to assist in growing their North American loyalty program. We're in the process of launching their e-commerce store now so we can support over their 4 million influencers with the expectation of bolstering their loyalty program. During the quarter, we also witnessed an increase in spending for our existing customers as we continue to deliver on their needs as well as develop creative solutions to address their unique requests of each customer. We also continue to launch new online stores for our customers and now are actively managing over 280 online customer stores. These provide long-term value for our customers as well as easy and simple access to our product. Importantly, we are executing and pursuing growth initiatives that we believe will propel our business and lead to long-term, sustainable profitability. These include meeting revenue and profitability goals, which are laid out each year, fully implementing NetSuite, continuous training of new employees to enable consistency, and setting and adhering to our annual budget. These are very important to the business and our core aspects to further our growth. So to wrap up, We developed and executed a business growth strategy resulting in increased awareness of STRON, a strong customer base, and national footprint. We believe these activities we are undertaking will further solidify our leadership position with the promotional products industry, which is now valued at over $25 billion. We also expect that these steps we are taking and the investments we are making will result in long-term profitability. We're extremely proud of our progress and look forward to our accomplishments in 2023. 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. Please go ahead, David.