Good morning, and thank you for joining Stran & Company's 2023 Second 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, August 14, 2023, containing its 2023 second 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 3 months ended June 30, 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 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.

Thank you, Aly, and thanks, everyone, for joining us today. Over the last several months, we have developed and executed on our business growth strategy, which has resulted in 18% growth in revenue to $17.5 million for the second quarter of 2023 and 23% growth in revenue to $33.2 million for the first 6 months of 2023. Importantly, in the second quarter, our organic revenue increased 11%, while also achieving a 35% increase in gross profit to $5.1 million and improved our gross profit margin to 29.1% from 25.4% for the same period last year. Additionally, for the first 6 months of 2023, our organic revenue increased by 14%, while our gross profit increased by 40% to $9.8 million, and gross profit margin improved to 29.4% from 25.8% for the same period last year. We're very proud of this organic growth and margin improvement, given the current market environment and declining sales many competitors in the industry are experiencing due to economic uncertainty and pressure on marketing budgets. Rather than contracting, we are growing and capturing additional market share within the $25 billion promotional products industry. We're witnessing strong contract momentum as a result of our sales efforts and highly focused marketing initiatives. We expect this trend to continue as we further refine and expand our outreach as well as leverage established relationships from our acquisitions. Regarding our acquisitions, we are proud to say we completed 4 meaningful acquisitions within the last 18 months. G.A.P. Promotions, Trend Brand Solutions, Premier NYC and our most recent acquisition of TR Miller have all brought meaningful and important strategic advantages to Stran and our operations. Importantly, G.A.P. Promotions, Trend Brand Solutions, Premier NYC are all fully integrated into our operations, and we are working towards full integration of TR Miller. While it has taken some time to close and integrate TR Miller, we anticipate significant revenue from this transaction as our largest acquisition to date. And while our results for the quarter reflect the integration cost, TR Miller has been historically profitable. And by integrating them into our organization, we anticipate additional cost savings, which should further enhance our profitability and cash flow. Importantly, we believe this transaction validates our strategy of exploring and identifying valuable and accretive companies that have potential not only to complement or propel strong forward. These acquisitions play an important part of our growth strategy as they enable us to expand our national footprint, enter into new verticals and each brings established customer relationships that we can leverage to support our growth. As I've mentioned before, the promotional product industry is ripe for consolidation, and we're building companies that contain the right resources, talent and reach to bring us to the forefront of the industry, building our strong and established reputation within the market. By combining our opportunistic M&A strategy with our expanded marketing programs and aggressive sales efforts, we are witnessing strong contract momentum among both existing customers and new customers. We expect this trajectory to continue as we expand our marketing and complete the integration of TR Miller who can leverage their established relationships. We also continue to launch new online stores for our customers and are now actively managing over 180 online customer stores. These provide long-term value for our customers as well as easy and simple access to our products. In addition, we are continually being recognized in the industry, and we're recently ranked among the top 40 distributors by the Advertising Specialty Institute. I'm proud to say that I was also recognized and awarded the person of the year by ASI in the 2023 Councilor awards. ASI serves the network of 25,000 suppliers, distributors and decorators in the $25.8 billion promotional products industry. Being acknowledged within their awards validates the incremental exposure and visibility that Stran is receiving as a result of our accelerated growth and our ongoing business efforts to become a true leader within the industry. Importantly, we are executing and pursuing growth initiatives that will lead to long-term sustainable profitability. Beyond the initiatives I've already mentioned, we are also setting revenue and profitability goals, working to fully implement NetSuite, continuously training new employees to enable consistency and setting and adhering to our annual budget. These are very important to the business and our core aspects of our strategy to propel our growth. While we did report a loss for the quarter, much like last quarter, these expenses are temporary and relate to the integration of our acquisitions, costs related to the implementation of NetSuite and lead generation program costs. We believe these are valuable investments that will be essential for overall growth and profitability in the long term. We expect these costs to increase over time. We have also recently implemented cost savings initiatives by reducing nonessential staff, cutting back on advertising spend and limiting travel and entertainment. At the same time, we've preserved a solid balance sheet with $25.5 million in cash and investments as of June 30, 2023. This provides us with the flexibility to explore strategic opportunities as they arise. So to wrap up, we developed and executed on a business growth strategy, resulting in increased awareness of Stran, a strong customer base and a national footprint. At this point, I'd like to turn the call over to our Chief Financial Officer, David Browner, to go over the financial results in detail. David, please go ahead.

Thank you, Andy. Revenue increased 18% to approximately $17.5 million for the 3 months ended June 30, 2023, from approximately $14.8 million for the 3 months ended June 30, 2022. The increase was primarily due to a higher spend from existing customers as well as business from new customers. Additionally, the company benefited from the acquisition of the assets of G.A.P. Promotions in January 2022, the assets of Trend Promotional Marketing in August of 2022, the assets of Premier Business Services in December 2022 and the assets of TR Miller in June 2023. Gross profit increased 35% to approximately $5.1 million or 29.1% of revenue for the 3 months ended June 30, 2023, from approximately $3.8 million or 25.4% of revenue for the 3 months ended June 30, 2022. The increase in the dollar amount of gross profit was due to an increase in sales, partially offset by an increase in purchasing costs. Net loss for the 3 months ended June 30, 2023, was approximately $800,000 compared to the net loss of approximately $400,000 for the 3 months ended June 30, 2022. This change was primarily due to an increase in operating expenses and an increase in purchasing costs. These factors were partially offset by the increase in sales during the 3 months ended June 30, 2022, from the acquisition of assets of each G.A.P. Promotions, Trend Brand Solutions, Premier NYC and TR Miller and the increase of recurring organic sales during the 3 months ended June 30, 2023, compared to 3 months ended June 30, 2022. At June 30, 2023, the company had $25.5 million of cash and investments and no long-term debt. At this point, I'll turn the call back over to Andy.

Thank you, David. Overall, we have continued to execute on our business growth strategy, resulting in increased revenue, increased recognition within the industry, an expanded national point and a growing customer base. We are very proud of our accomplishments and look forward to reporting additional achievements as they unfold. I'd like to say thank you for joining the call today. At this point, we'd like to open up the call to questions. Operator?

Our first question is coming from Robert Smith with RSA Investments.

Just a couple of questions. How does seasonality affect your business?

Sure. Thank you. Yes, seasonality does affect our business. So historically, the first 2 quarters have been our slowest months and this year is no different. So it does affect that. But one thing to note is our bookings are very strong right now. Currently, we have over $15 million in open bookings, which supports our belief that our accelerated growth will continue in the second half of the year because those bookings are from customers that have placed orders with us but will deliver in Q3 and Q4, in addition to any new business that we acquire between now and the end of the year. So seasonality really does affect it. A lot of the business comes in at the end of the summer when people start preparing for the holidays at the end of the year, and that's historically when we've seen our largest quarters and are expecting that this year as well.

All right. The company showed some nice sales and gross profit growth, but unfortunately, not profitable this quarter. Can you just cite some specific costs and expenses that contributed to the quarter's loss?

Sure. Yes. So as you mentioned, we did see 23% growth for sales and 40% for gross profit. There are a couple of factors that are contributing to the loss. The first one is probably the largest one: the acquisition. We've completed 4 acquisitions in the last 18 months with historically, those companies combined have done over $30 million in historical revenue. So it's a large portion of our business. The costs associated with identifying them, performing due diligence with both legal and accounting, as well as the closing costs and then integrating them into the business, along with the capital to close the transactions, combined with the resources we've had to really put in place to capitalize on those opportunities really drives some of the costs up. So many of the professional fees went up. Resources have to be allocated to ensure we can identify and handle these acquisitions. We also have to recognize that when we close a transaction, these costs start being recognized immediately, yet the sales cycle and the revenue—because of the longer sales cycle and lead times—often take longer to materialize. So these factors combined lead to short-term losses that we believe will result in significant long-term benefits. The second contributing factor involves making long-term investments in technology, which will create internal efficiencies and differentiators for Stran. This is to ensure that it becomes easier for our customers to do business with us. Overall, building that infrastructure takes time, and we are also assessing where we can add resources while removing redundancies across the company. So to summarize, the integration costs and acquisition-related expenses have driven losses in the last 2 quarters.

Well, that helps a lot. And just one last question. Just looking at macro trends. What are you seeing for your customers' marketing budgets? And how do you think that that's going to affect the rest of your year?

Sure. So regarding marketing budgets, we have heard within the industry that many of our suppliers and customers have seen a slowdown in business, not necessarily going backwards but perhaps not growing as much as in the past. While we continue to see growth, one trend we've noticed is fewer orders but larger order sizes. Our customers are focusing on more significant initiatives and investing more in these targeted endeavors rather than a broad approach. With over $15 million in current bookings, we're confident that these larger orders will contribute to revenue in Q3 and Q4. We have positive expectations for Q4 numbers because much of that revenue will materialize then, and we're optimistic about long-term spending, especially with holiday bookings anticipated in the second half of the year.

We have a question from Mike, who is an investor.

Stock is trading around $1.30. Where do you and the Board stand or discuss or think about buybacks?

Sure. We do have a buyback in place where, historically, I think we spent about $3 million on buybacks, and we have approved up to $10 million for buyback. It’s really about balancing cash preservation and using that for buying back stock. We went public to use that money to accelerate our growth and create something special within this industry because we see a substantial opportunity in the promotional products sector to become a true leader. So we aim to strike a balance between building long-term value in the company and buying back shares. We will take advantage of the buyback when we see appropriate opportunities; currently, we have about $6 million or $7 million left to utilize for that purpose, based on what we view as beneficial for our shareholders.

We currently have no further questions in queue at this time, so I will hand it back to management for any closing remarks they may have.

Great. Well, thank you, everybody, for joining. We're optimistic about Stran, our future and where we are today and where we're headed in the future. Please stay in touch with us and keep watching. We have a lot happening in the next few months and we are excited to report on that. Thank you.

Thank you, ladies and gentlemen. This does conclude today's conference, and you may disconnect your lines at this time, and we thank you for your participation.