Greetings. Welcome to the Strand & Company First Quarter 2026 Earnings 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 2026 First Quarter 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. Good morning, everyone, and thank you for joining us today. The first quarter of 2026 demonstrated that STRON has reached a genuine inflection point in profitability. It validates the strength of our platform, the depth of our client relationships, and the scalability of our operating model. Most importantly, it confirms what we have long believe that investments we have made over the past years are now translating directly into profitable growth. During the first quarter, total revenue grew 8.9% year-over-year to $31.2 million, reflecting continued momentum across both existing client relationships and new business wins. Even more importantly, that growth translated into significantly improved profitability and operating leverage across the organization. Gross profit increased 13.7% to $9.6 million, while gross margin expanded more than 100 basis points to 30.9% when compared to the prior year. These results demonstrate the strength of our execution, the value of our client relationships, and the benefits of the operational discipline and strategic investments we've made over the last several years. We've also achieved significant profitability milestone this quarter, generating net income of $744,000 compared to a net loss of $393,000 in the prior year period. In addition, EBITDA improved to $1 million versus a negative $201,000 a year ago. A year-over-year improvement of $1.2 million. These are not incremental improvements. This is a fundamental shift in the earnings trajectory of our business. What makes these results especially encouraging is that we're delivering profitable growth while simultaneously investing in the future of our company, expanding our technology capability, deepening our enterprise-client relationships, and building toward a significantly larger market opportunity ahead. We have turned the corner on profitability and we intend to keep widening that gap. As we continue to scale, we are seeing tangible operating leverage throughout the organization. Total operating expenses remained essentially flat year-over-year at $9 million despite meaningful revenue growth. As a percentage of sales, operating expenses improved to 28.8% from 31.4% a year ago, a 260 basis point improvement. I also want to highlight the dramatic turnaround within the strong loyalty solution segment during the quarter. SLS generated $532,000 of operating income in Q1-2026 compared to an operating loss of $462,000 in the prior year period. This reflects both the successful integration of Ganner Group business and the sustained operation discipline our team has implemented. Importantly, the SLS segment gross margin expanded to 28.7 percent from 21.8 percent in Q1 2025, a nearly 700 basis point improvement. Beyond the financial results, the first quarter is also marked by several highly strategic client wins and relationship expansions that reinforce the growing relevance of our solutions in the marketplace. One of the highlights of the quarter was the extension of a three-year, multi-million dollar partnership with one of the world's premier non-profit running organizations. This renewal reflects the trust our clients placed in strong and validates our ability to execute complex, high-impact engagement campaigns. In addition, we secured a new multi-million dollar agreement with a leading gaming company to support a large-scale rewards and loyalty initiative. This win demonstrates the growing demand for integrated promotional products and incentive solutions, particularly among consumer-facing brands, seeking innovative ways to strengthen customer engagement and loyalty. We're also proud to add two top global 100 law firms as new clients. These relationships further diversify our customer base and reflect the increasing appeal of strong solutions among sophisticated professional service organizations that require premium service, strategic execution, and scalable technology capabilities. Collectively, these wins highlight several important themes that we believe position strong for future sustained long-term growth. First, we continue to gain traction with enterprise-level clients that value strategic partnerships rather than transactional vendors. Second, we are expanding into new verticals and end markets where branded merchandise, loyalty solution, and employee engagement programs are becoming increasingly important components of customer acquisition and retention strategies. And third, our technology investments are creating meaningful competitive differentiation. We recently launched Tron Digital Solutions, a proprietary SaaS-based platform designed to enhance client engagement, streamline campaign execution, improve analytics capabilities, and generate recurring revenue over time. This is a platform that makes Strong harder to replace and more valuable than ever to every client we service. With Strong Digital Solutions, we are moving beyond being just a best-in-class promotional products provider and becoming an integrated marketing ecosystem partner. We are adding scalable software capabilities that deepen client relationships and create opportunities for higher margin, recurring revenue streams, the kind of revenue that compounds over time and expands our long-term earning potential. This is an important strategic initiative because it positions drawn at the intersection of branded merchandise, technology, and data-driven engagement solutions. As more companies seek integrated marketing ecosystems rather than isolated service providers, we believe our combined physical and digital offering creates a compelling competitive advantage. Equally important, we continue to maintain a strong balance sheet that provides significant flexibility to support future growth initiatives. We ended the quarter with $12.8 million in cash, cash equivalents, and investment. This financial position allows us to continue investing in technology, expanding our sales and marketing capabilities, evaluating strategic acquisition opportunities, and pursuing initiatives that enhance long-term shareholder value. Looking ahead, we are not just optimistic, we are confident. This quarter demonstrated the power of Strom's growth model. Revenue growth, margin expansion, and profitable operations all delivered simultaneously. We believe that promotional products and loyalty industries continue to benefit from strong secular trends, including increased corporate focus on customer engagement, employee retention, experiential marketing, and brand activation. At the same time, clients are increasingly looking for partners that can provide integrated, scalable, technology-enabled solutions with measurable ROI. Stroud is exceptionally well-positioned to capitalize on those trends. Strategic acquisitions also remain a core pillar of our long-term growth strategy. While we continue to evaluate opportunities actively, we are being increasingly disciplined and selective in today's environment, focusing on targets that enhance our technology capabilities, expand our client base, strengthen our vertical expertise, and create clear long-term shareholder value. With our strong balance sheet and improved profitability profile, we believe we are well positioned to pursue the right opportunities at the right time. We are entering the remainder of the year with strong momentum on expanding pipeline, growing enterprise relationships, two profitable segments, and a platform we believe can continue compounding. The promotional products and loyalty industries are large, fragmented, and shifting towards integrated partners with technology and scale. And that describes strong. Our focus remains on driving sustainable, profitable revenue growth, expanding margins, deepening client relationships, and continuing to build a platform capable of generating compounding value for our shareholders. We have the strategy, the team, the balance sheet, and the momentum. The opportunity in front of us is significant, and we are executing. And while trading blackout restrictions prevented us from repurchasing shares during the first quarter, we intend to resume our buyback program as a direct expression of our confidence in the business. We believe the current share price meaningfully under value strong, and we view repurchases as an attractive and disciplined use of capital as we continue to build 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 the quarter ended March 31st, 2026. Total sales increased 8.9% to $31.2 million for the three months end in March 31, 2026, from $28.7 million for the prior year period. Sales buyer strong segment increased 11.9% to $23.4 million for the three months end in March 31, 2026, from $20.9 million in the prior year period. The increase in sales was primarily driven due to higher spending from existing clients as well as new customers. Sales by our SLS segment remain approximately flat at $7.8 million for the three months ended March 31, 2026 when compared to the prior year period. Total gross profit increased 13.7% to $9.6 million or 30.9% of sales for the three months ended March 31, 2026 from $8.5 million, or 29.6% of sales for the three months ended March 31, 2025. The increase in the dollar amount of the total gross profit was primarily attributable to the shift in customer mix and effective cost management. Gross profit of our STRON segment increased to $7.8 million for the three months ended March 31, 2026 from $6.8 million for the prior year period. Gross profit for our SLS segment increased to $2.2 million for the three months ended March 31, 2026 from $1.7 million for the prior year period. Total operating expenses decreased 0.2% to $9 million for the three months ended March 31, 2026. As a percentage of sales, operating expenses improved to 28.8% for the three months ended March 31, 2026 from 31.4% for the three months ended March 31st, 2025, an improvement of approximately 260 basis points reflecting the operating leverage now embedded in our model. Operating expenses of our strong segment increased to $6.2 million for the three months ended March 31st, 2026 from $5.6 million for the prior year period. As a percentage of sales, operating expenses of our strong segment decreased to 26.6% for the three months ended March 31, 2026 from 26.9% for the prior year period. The increase in the dollar amount of the operating expense was primarily due to the investment in the strong digital solutions, higher expenses related to our Magento open source e-commerce platform, and higher sales and marketing related costs. Operating expenses of our SLS segment decreased to $1.7 million for the three months ended March 31st, 2026 from $2.2 million for the prior year period. As a percentage of sales, operating expenses of the SLS segment improved to 21.9% for the three months ended March 31st, 2026 from 27.7% for the prior year period. The decrease in the dollar amount of the operating expense was primarily attributable to a reduction in headcount and lower sales-related costs. Operating expenses for the other, which represents unallocated corporate costs, decreased to $1.1 million for the three months ended March 31, 2026 from $1.2 million for the prior year period, primarily driven by lower legal and accounting-related expenses due to the re-audit of our historical financial statement. Our net income for the three months ended March 31, 2026 was $744,000 compared to a net loss of $393,000 for the prior year period. This marks a clear inflection in profitability driven by gross profit growth, outpacing revenue growth, and essentially flat operating expenses.

As of March 31, 2026, we have approximately $12.8 million in cash and cash equivalents and investments. now I'll turn the call back to Andy thank you David and thank you everyone for listening before we conclude I'm very excited about the results that we posted but I'd love to open it up for questions so operator please open it up for questions and we'll answer anything that anyone would like to know 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 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. Once again, if you would like to ask a question, please press star 1.

All right, so it doesn't look like we have any questions, so thank you. Looks like we've answered a lot of things, and I'm sure we'll have other questions as time goes on. So thank you, everyone, for listening, and I'll wrap things up. So before we conclude, I do want to acknowledge the incredible team at STRON whose dedication and execution made this quarter possible. I also want to thank our clients for the trust they place in us and our shareholders for their continued support. 2-1-2026 is proof that our strategy is working and we're just getting started. We believe the first quarter demonstrating meaningful, measurable progress, revenue growth, margin expansion, operating leverage, and a genuine profitability inflection. We've turned the corner, and we believe we are still in the early stages of locking the full potential of this platform. We are highly confident in the strength of our business, our market position, and our ability to execute. The investments we have made in our people, technology, client relationships have built the foundation for a durable, compounding growth. We will continue to expand margins, deepen client relationships, pursue strategic opportunities, and deliver results that reflect the quality of this business. The best is ahead of us. With that, thank you again for joining us today and for your continued interest in STROM. We appreciate your time and support, and we look forward to updating you on our continued progress in the quarters ahead.

Thank you.

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