Greetings. Welcome to the Strand & Company Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Alexandra Schilt. You may begin.

Good morning, and thank you for joining Strawn & Company's 2025 Fiscal Year Financial Results and Business Update Conference Call. With us today are Andy Shape, Chief Executive Officer, and David Browner, Chief Financial Officer. Yesterday, we issued a press release detailing our results, which is available on our website at ir.strawn.com. Before we begin, please note that today's remarks may include forward-looking statements that involve risks and uncertainties as described in our SEC filings. With that, I'll turn the call over to Andy Shape. Please go ahead.

Thank you, Allie, and good morning, everyone. 2025 was a defining year for STRON. We delivered strong financial results while we're clearly demonstrating the scalability and long-term potential for our business model. We reported revenue of $116.2 million, representing a 40.6% growth over the prior year. This growth was driven by both robust execution and continued momentum across the business. Importantly, we achieved 12.9% organic growth in our core promotional products business, fueled by increased spending from existing enterprise clients and the addition of new customers. What stands out is the high quality of this growth. We're seeing deeper engagement with our clients, continued expansion of programmatic relationships, and clear proof that our platform is scaling effectively. On the expense side, we made meaningful progress in improving operational efficiency. Total operating expenses declined to 31.1% of revenue in 2025, down from 37.2% in 2024. While we did incur elevated legal, accounting, and other public company costs, including expenses related to the re-audit of historical financials in the first half of the year, these one-time items are now largely behind us. Public company-related expenses totaled $5.2 million in 2025, compared to $3.3 million in 2024. On profitability, we generated $34.2 million in gross profit, reflecting strong demand and improving efficiencies as we scaled. We significantly narrowed our net loss to $747,000, compared to a $4.1 million net loss in 2024. Even more importantly, we achieved positive EBITDA of $184,000 for the full year, a substantial improvement from a negative $3.6 million in 2024. These results highlight the underlying strength of our operating performance and the scalability of our model. These accomplishments are especially noteworthy given the significant tariff-related volatility we face throughout the year. Elevated tariffs increase product costs, particularly for direct import orders and our loyalty segment. Although we're able to pass along a portion of these costs to customers, margins were still compressed. In addition, tariff uncertainty created hesitation among buyers, particularly in our loyalty and casino segments, which impacted both revenue and profitability. While some uncertainty remains, we believe tariffs have now stabilized to a point where we can work effectively with vendors and customers without further material impact on our gross margins going forward. Stepping back, it's clear that this strong performance is not a one-off event. It is a result of deliberate long-term strategy that is now compounding. We've intentionally built STRON around long-term programmatic relationships, a diversified and expanding customer base, and a technology-enabled platform that supports efficient scaling. Today, we serve more than 2,000 active customers, including over 30 Fortune 500 companies. An increasing portion of our revenue comes from program-based engagements that provide greater visibility and recurring revenue streams. Our customer relationships are becoming deeper and more strategic. Clients are no longer engaging with us for just one-off campaigns or individual products. Instead, they are leveraging multiple areas of our platform, including promotional products, loyalty and incentive programs, e-commerce solutions, print services, warehousing, and logistics. As customers adopt more of our capabilities, we become more deeply embedded in their operations, driving higher retention and greater revenue durability. We continue to invest in solutions that strengthen these relationships and expand our value proposition. A prime example of this is the recent launch of our new client-branded gifting platform. This builds on our core e-commerce capabilities, enables clients to deliver curated, scalable gifting experience for employee recognition, customer engagement, or marketing initiatives. Importantly, it introduces a more recurring programmatic revenue stream while further integrating us into the client's engagement strategies. We have also strengthened our leadership and governance. Over the past year, we added experienced public company and industry leaders to our board of directors. These additions bring valuable experience, expertise in capital markets, operations, and strategic growth, and we are confident they will play a key role in supporting our future initiatives. Looking at the broader market, we operate in a large and highly fragmented industry. The promotional products market alone was $27.7 billion in 2025, with a significantly larger total addressable market when including adjacent categories. Given the lack of a dominant player, we see substantial opportunities to gain market share through both organic growth and strategic acquisitions. Our strategy remains focused and consistent. deepen relationships with enterprise clients, expand programmatic revenue, invest in technology, and pursue acquisitions that enhance our capabilities and geographic reach. When you combine these elements, it's clear we have built a business that is not just growing, but accelerating. As we look ahead to 2026, we are encouraged by the momentum that we see early in the year. While we are not providing formal guidance, we do expect a meaningful improvement in first quarter profitability driven by continued customer demand, increased operating leverage, and the strategic progress we had made in 2025. We believe this positions us well for sustained momentum throughout the year. Before I conclude, I'd like to briefly address our warrants. As detailed in our filings, these warrants have an exercise price of approximately $4.81 per share and are scheduled to expire in the fourth quarter of 2026. We view this as a meaningful near-term catalyst. As the warrants expire, we expect the overhang on our stock to be removed, which should simplify our capital structure and present a clear, more investable equity story. In closing, our priorities remain clear. Drive sustained growth, expand our programmatic revenue base, improve profitability, and execute on strategic acquisitions that enhance our platform and create long-term shareholder value. I'll now turn the call over to our CFO, David Browner, for a more detailed review of our financial results.

David please go ahead thank you Andy and good morning everyone I'm pleased to provide a detailed overview of our financial performance for 2025 fiscal year ended December 31st 2025 total sales increased 40.6 percent to 116.2 million in 2025 from 82.7 million in 2024 for our strong promo segment sales increased 82 increased to 82.1 million in 2025 72.7 million in 2024 the increase in sales was primarily due to higher spending from existing clients as well as business from new customers for strong loyalty segment which consists of the former gander group business sales increased to 34.1 million from in 2025 from 9.9 million in 2024 the increase in sales was primarily attributable to the inclusion of a full year of consolidated operations, including the Gander Group assets, which were acquired in August of 2024, and therefore only partially reflected in our result of operations for the prior year. Total gross profit increased 32.6% to $34.2 million, or 29.5% of sales in 2025, compared to $25.8 million, or 31.2% of sales in 2024. The decline in overall gross profit margin is primarily attributable to the inclusion of the full-year consolidated operations, including Gander Group's assets, which historically operate at a lower gross profit margin from the strong business segment. For our Strong Promo segment, gross profit increased to $27 million in 2025 from $23.7 million in 2024, and a gross profit margin increased to 32.9% in 2025 compared to 32.7% in 2024. For our strong loyalty segment, gross profit increased to $7.2 million in 2025 from $2.1 million in 2024, and the gross profit margin increased to 21.1% in 2025 compared to 20.8% in 2024. Additionally, tariffs did have a negative impact on our gross profit margin in 2025, notably related to our strong loyalty segment, but as Andy mentioned earlier, we We believe that these have stabilized and the results expected to see improvements in our gross profit margin going forward. Total operating expenses increased 17.8% to $36.2 million in 2025 from $30.7 million in 2024. As a percentage of sales, total operating expenses decreased to 31.1% in 2025 from 37.2% in 2024. For our strong promo segment, operating expenses increased to $28.3 million in 2025 compared to $27.6 million in 2024. As a percentage of sales for the segment, operating expenses decreased to 34.5% in 2025 from 37.9% in 2024. The increase in dollar amount of operating expenses was primarily due to increases in legal and accounting expenses related to the re-audit of our historical financial statements increased headcount and higher expenses related to our e-commerce platform magento for our strong loyalty segment operating expenses increased 7.9 million in 2025 from 3.1 million in 2024 as a percentage of sales the segment, the operating expenses decreased to 23.1% in 2025 from 31.4% in 2024. The increase in the dollar amount of operating expenses was primarily attributable to the inclusion of the full year of the consolidated operations, which were acquired in August of 2024, and therefore only partially reflected in the 2024 financial statement. Our net loss for the year ended December 31st, 2025, was approximately $0.7 million compared to a net loss of approximately $4.1 million for the year ended December 31st, 2024. This change was primarily due to an increase in gross profit, partially offset by an increase in operating expenses. As of December 31st, 2025, we had approximately $11.6 million in cash and cash equivalents and investments. I'll now turn the call back to Andy for closing remarks.

Thank you, David. As we reflect on 2025, we're very encouraged by where we stand today. Over the past year, we delivered strong growth, deepened our customer relationships, expanded our platform with new capabilities like our gifting solution, and continue to strengthen the business. Our focus is serving our clients at a high level, executing with discipline, and driving measurable value. Looking ahead, we see a clear path to continued growth, margin expansion, and profitability driven by operating leverage, deeper client integration, and ongoing investments into our platform. We are confident in our strategy, encouraged by our momentum, and excited about the opportunities ahead. Thank you for joining us today and for your continued support of Strong. With that, we'll now open the call to questions. Operator?

Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

As a reminder, if you would like to ask a question, please press star 1.

We have reached the end of the question and answer session, and I will now turn the call over to Andy for closing remarks.

Thank you. Apparently, we addressed every question since we had no – or we addressed any outstanding questions since we didn't have any. Once again, we're encouraged by the results of 2025. We stated that it was a year to continue looking for growth, increase our profitability. We accomplished both of those by seeing 40% growth and really seeing positive EBITDA versus an over $3 million EBITDA loss last year. So we're very encouraged by that. We're very encouraged by the future of the business.

We, again, look at our growth strategy as very simple as getting business from our existing customers, new customers,

expanding our offerings, expanding our technology, and looking at acquisitions that make sense in a very highly fragmented and large industry that we really believe in. So thank you, everyone, for the support of STRON, and we look forward to speaking to the future about our continued success.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.