Good morning, everyone, and welcome to Stran and Company's second quarter 2026 earnings call. At this time, all participants are in a listen-only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Alexandra Schilt, Investor Relations at Crescendo Communications. Over to you.

Good morning, and thank you for joining Strawn & Company's 2026 Second 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.stron.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, Andy.

Thank you, Allie. Good morning, everyone, and thank you for joining us today. The second quarter was a strong period for STRON. We continue to execute on the strategy you we've been building over the past several years, and the results are showing up in our numbers. We are deepening relationships with large enterprise customers, winning new business across attractive verticals, strengthening our position in casino and gaming, and continuing to invest in technology and infrastructure necessary to support a larger and more scalable organization. Our opportunity extends well beyond traditional promotional products. Our goal is to become an increasingly important strategic partner to our customers, helping them manage complex branded merchandise, loyalty, incentive, e-commerce, and fulfillment programs through an integrated platform. During the quarter, we made progress against that vision while navigating the normal variability that comes with the timing, size, and mix of large customer programs. That progress is increasingly visible in our financial performance, beginning with continued top-line revenue growth in the second quarter. For the quarter, revenue increased 2.4% to $33.4 million compared with $32.6 million in the prior year period. Gross profit increased to $10 million with a gross margin of 30%. We remain profitable generating operating income of $86,000 and net income of $309,000. Our core strong business continued to be the primary driver of top-line growth. With that segment, revenue increasing 6.9% year-over-year, reflecting higher spending from existing clients as well as new customer-based business. We're also encouraged by what we saw at Strong Loyalty Solutions, our business segment consisting of the Gainer Group business. While SLS revenue declined year-over-year, the casino and gaming business can experience variability between quarters based on the timing and size of individual customer programs and orders. More importantly, the profitability of the business improved meaningfully during the quarter. SLS generated a higher gross profit, expanded gross margin to 24.3% from 21%, and nearly doubled segment operating income year over year. When we step back and look at the first six months of 2026, the underlying progress becomes even more clear. The first half represents the strongest six-month period in Stront's history as a public company. First half revenue increased 5.4% to $64.6 million. Gross profit increased 7.2% to $19.7 million. And gross margin improved to 30.4%. Most importantly, we generated $731,000 of operating income compared with an operating loss of $140,000 last year. When that income increased to $1.1 million from $250,000. EBITDA for the first half more than doubled to $1.6 million from $728,000 a year ago. Taken together, the second quarter and first half results demonstrate continued progress across the areas that matter most to us, growing our core business, improving the profitability of SLS, strengthening the earnings profile of the company, and investing in the platform to support our next stage of growth. Beyond the financial results, we had a productive quarter on the business development front. We continue to win new enterprise relationships, expand into attractive verticals, and build the kind of long-term programmatic business that drives durable revenue. In May, we announced multiple new contract wins within the consumer retail market, including a three-year uniform program with a leading U.S. grocer retailer that is expected to generate six figures in annual revenue, along with additional uniform and promotional product orders from regional grocery operations. these wins demonstrate the value of our broader approach establish an initial relationship through a uniform or promotional program gives us an opportunity to execute deepen that relationship and potentially expand into additional brand and merchandise fulfillment and marketing programs over time that is central to our land and expand strategy win the relationship deliver at a high level and then increase the breadth of service that we provide as the relationship develops. We continued that momentum in June when we announced a new contract with the leading U.S. provider of construction material and systems serving commercial and residential markets. That engagement is expected to generate nearly seven figures in annual revenue and includes brand and merchandise, promotional campaigns, and end-to-end program management. This win is significant not only for its expected initial contribution, but because it demonstrates our ability to apply the strong platform across new industries and large enterprise organizations. As with many of our relationships, our objective is to establish a strong initial program and then identify opportunities to broaden the relationship over time. We also continue to strengthen our position in the casino and gaming market, which remains an important area of opportunity for Strong. Toward the end of the quarter, we announce the addition of an industry veteran, Kevin Lewis, as a contracted sales representative. Kevin brings extensive experience in relationship across the casino and gaming industry, along with an existing customer portfolio. This is particularly compelling when viewed alongside the improving financial performance of strong loyalty solutions. As we discussed earlier, SLS delivered significantly stronger margins and profitability during both second quarter and first half of the year. Our objective is now to build on that stronger operating foundation by expanding the business we can bring through the platform. We continue to see favorable trends across the promotional products and loyalty industries as companies place greater emphasis on customer engagement, employee retention, and brand activation. At the same time, larger organizations increasingly want integrated partners that can combine technology, creative execution, fulfillment, and program management at scale. That shift plays directly to Strong's strengths and is reflected on our continued advancement within the industry. Most recently, Strawn moved up two positions to number 21 on the 2026 ASI Counselor Top 40 Distributor List, a key industry benchmark based on verified North American promotional products revenue. That recognition reflects the scale we have built, the strength of our enterprise relationships, and our ability to continue gaining share in a large and fragmented market. Acquisitions also remain an important part of our growth strategy, but we will continue to be disciplined. We're focused on opportunities that expand our capabilities, add attractive customer relationships, strengthen key verticals, and create meaningful long-term value. Our balance sheet gives us the flexibility to be patient and pursue the right opportunities at the right time. As we enter the second half of the year, we are operating from a stronger foundation with a growing core business, improving profitability at SLS, new enterprise wins, and an expanding pipeline. Our focus is on converting that momentum into sustainable revenue growth, stronger profitability, and increasing cash generation. Capital allocation remains part of that strategy. During the second quarter, we resumed our share repurchase program, purchasing and retiring approximately 131,000 shares for approximately $272,000. Since program inception, the company has repurchased a total of approximately 2.3 million shares for approximately $4.2 million at a weighted average of $1.81 per share. We will continue to balance repurchase with investments in the organic growth and strategic acquisitions, always with the objective of creating long-term shareholder value. I also want to highlight that our public warrants, which have an exercise price of approximately $4.81 per share, are scheduled to expire in the fourth quarter of 2026. As the warrants expire, we expect the overhang on our stock to be removed, which should simplify our capital structure and present a cleaner equity story for current and prospective investors. Stronger has multiple paths to grow. Our focus is clear. Execute with discipline, continue improving the economics of the business, and translate that business into greater value for our shareholders. 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 three and six months ended June 30, 2026. For three months results, total sales increased 2.4% to $33.4 million for the three months ended June 30, 2026, from $32.6 million for the prior year period. Sales by our strong segment increased to $23.3 million for the three months ended June 30, 2026, from $21.8 million for the prior year period. Sales buyer SLS segment decreased to $10.1 million for the three months end of June 30th, 2026, from $10.8 million for the prior year period. Total gross profit increased 1.6% to $10 million, or 30% of sales, for the three months end of June 30th, 2026, from $9.9 million, or 30.3% of sales for the prior year period. The increase in the dollar amount of total gross profit was primarily attributable to customer mix and effective cost management. Gross profit for our strong segment remained consistent with prior year period of $7.6 million for the three months ended June 30, 2026 in the prior year. For the strong segment, the slight decrease in the dollar amount of gross profit was due to the customer mix. Gross profit for our SLS segment increased to $2.5 million for the three months ended June 30, 2026, or $2.6 million for the prior year period. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to an improved customer mix, effective cost management, and lower tariffs. Total operating expenses increased 4.9% to $9.9 million for the three months ended June 30, 2026, from $9.5 million for the prior year period. As percentage of sales, total operating expenses increased to 29.8% through the three months end of June 30, 2026, from 29.1% for the prior year. Operating expenses of our strong segment increased to $6.9 million through the three months end of June 30, 2026, from $6.5 million for the prior year period. As a percentage of sales, operating expenses of our strong segment decreased to 29.8% for the three-month end of June 30, 2026, from 30% for the prior year period. For the strong segment, the increase in the dollar amount of operating expenses was primarily due to higher sales-related costs and our investment in the strong digital solutions to provide enhanced functionality and offerings to scale client programs. Operating expenses for our SLS segment decreased to $2 million for the three months ended June 30, 2026 from $2.1 million for the prior year period. As a percentage of sales, operating expenses of our SLS segment increased to 19.9% for the three months ended June 30, 2026 from 19% for the prior year period. For the SLS segment, the decrease in the dollar amount of operating expense was primarily attributable to a small reduction in headcount in lower sales-related costs. Operating expenses for other consisting of unallocated corporate costs, including salaries of corporate officers, audit-related fees, board of directors' compensation, and other stock-related charges, such costs increased by $106,000 to $995,000 for the three-month end of June 30, 2026, from $889,000 for the prior year period. The increase was primarily due to higher legal and accounting expenses. Net income for the three months ended June 30, 2026 was $309,000, compared to a net income of $643,000 for the prior year period. This change was primarily due to an increase in gross profit. EBITDA for the three months ended June 30, 2026 was $551,000, compared to an EBITDA of $929,000 for the prior year period. For six months results, total sales increased 5.4% to $64.6 million for the six months end of June 30, 2026, from $61.3 million for the prior year period. Sales of our strong segment increased to $46.7 million for the six months end of June 30, 2026, from $42.7 million for the prior year period. For the strong segment, the increase in sales was primarily due to higher spending from existing clients as well as business from new customers. Sales buyer SLS segment decreased to $17.9 million for the six-month end of June 30, 2026 from $18.6 million for the prior year period. For the SLS segment, the decrease in sales was primarily attributable to a lower spend. from total gross profit increased 7.2 percent to 19.7 million or 30.4 percent of sales for the six months end of june 30th 2026 from 18.4 million or 30 percent of sales for the prior year period the increase in dollars amount of total gross profit was primarily attributable to the customer mix and effective cost management gross profit of the strong segment increased to 15 million for the six months ended June 30, 2026 from $14.4 million for the prior year period. For the strong segment, the increase in the dollar amount of gross profit was due to an increase in sales of $4 million, which was partially offset by an increase of cost of sales of $3 million. Gross profit of the SLS segment increased to $4.7 million for the six months ended June 30, 2026 from $4 million for the prior year period. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to an improved customer mix and effective cost management. Total operating expenses increased 2.4% to $18.9 million for the six-month end of June 30th, 2026, from $18.5 million for the prior year period. As a percentage of sales, total operating expenses decreased to 29.3% for the six-month end of June 30th, 2026, from 30.2% for the prior year period. Operating expenses of the strong segment increased to $13.2 million for the six months ended June 30, 2026 from $12.2 million for the prior year period. As a percentage of sales, operating expenses of our strong segment decreased to 28.2% for the six months ended June 30, 2026 from 28.5% for the prior year. For the strong segment, the increase in the dollar amount of operating expenses was primarily due to an increased headcount in employee related costs higher sales related costs and our investment in digital solution or strong digital solutions to provide enhanced functionality and offering to scale client programs operating expenses of our sls segment decreased to 3.7 million for the six months ended june 30th 2026 from 4.2 million for the prior year period as a percentage of sales operating expenses of our SLS segment decreased to 20.8% for the six-month end of June 30, 2026, from 22.6% for the prior year period. For the SLS segment, the decrease in the dollar amount of operating expenses was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for other consists of unallocated corporate costs, including salaries for corporate officers, audit-related fees, board of director compensation, and other stock-related charges. Such charges decreased by $78,000 to $2.05 million for the six months ended June 30, 2026, and $2.13 million for the prior year period. The decrease was primarily due to lower legal and accounting expenses. Net income for the six months ended June 30, 2026 was $1.1 million, compared to a net income of $250,000 for the prior year period. This change was primarily due to an increase in gross profit. EBITDA for the six months ended June 30, 2026 was $1.6 million, compared to an EBITDA of $728,000 for the prior year period. As of June 30, 2026, we had $12.6 million in cash and cash equivalents and investments. Now I'll turn the call back to Andy.

Thank you, David. At this time, we'll open up the questions. Operator, please open the call for questions.

Thank you very much. We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. And for anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Greg Womack, who's a private investor. Greg, your line is live.

All right. Yeah, thanks. Congratulations on the good quarter. Thanks, Greg. I hope we can get some more details on the primary drivers of revenue growth in the quarter. Was it between pricing, new logos, or deeper penetration at existing programs?

It was really a combination of all of those things. I mean, that is our growth strategy to try to, you know, we've got a great roster of clients already. We have over 30, 400, 500 customers, so we try to expand and go deeper with them. It was a combination of that as well as some new business that we've also gotten through the addition of some additional sales reps, some new business development efforts, and some new clients. So really, that's just a combination of getting more from our existing client base and finding new clients, which is what we continue to do going forward as well.

The second question, too. I've seen that one of your goals last year was to improve the margin at the SLS segment. It looks like you've done that. So you had, I think, 28% and then a slight step back to 24% this quarter. Which of those do you think is closer to the long-run run rate of that segment?

Do you think there's more improvement that can be had? probably uh right in the middle of the two of them uh is really where we're looking uh probably in that mid mid mid to high 20s um just because we it's a very competitive market it's a little bit more competitive the orders are a little bit larger in that segment so um we have to be a little bit more tighter on our prices but price isn't always the driving factor quality value that we deliver for those clients and what we deliver for them is is much more relevant to them than pricing alone. So I think we can get it closer to that 28, but probably in the 26 is probably more realistic is what we're looking at.

That helps. Thank you.

Yep. Thank you for the questions.

Thank you very much. Just a reminder there, if there are any further questions, you can still join the queue by pressing star one on your phone keypad now. We've got a question in from Edward Riley of MinuteLite. Edward, your line is live.

Hey, guys. Just one for me. You know, with the increase in G&A here sequentially and year over year, it seems like you're really leaning into strong digital solutions a bit more. What's giving you more confidence to invest more money and time within this platform?

Yeah, so for us, we're investing that's somewhat of a low-risk, high-reward opportunity. We're investing into it, but not significantly, although we are investing into it. We're not investing seven figures into it. You know, we see that that offers much more stickiness for that, for our customers, that we're offering them an easier way to use our platform to accomplish more services that we provide to them and just make it easier to do business with. That's really, at the end of the day, what our technology offers is making it easier for them to do more job functions or more service functions for them, whether that's additional print, additional loyalty, or additional services that we can provide to them. So we are leaning into that from a sales and marketing standpoint, but not necessarily from a technology standpoint. We've established and built out the platform fairly cost-effectively, and now we're seeing some results from a few select customers, existing customers, and then we're rolling it out now also to try to attract additional new customers as well. So we're leaning into it, but we're being conservative with the amount that we're investing into it because we want to really make sure that we see results of that, not go out and try to spend more than we're making. So we're trying to have it be, in the beginning, cost neutral, and then eventually very profitable over time. So hopefully that answers your question, but we're still very excited about it, but we're just being very conservative in the investment and the time that we put into it since we want to also make sure that we don't cannibalize our core business by concentrating too much on that. So it's a fine balance that we're doing, but I'm happy with where we're going with it, and I'm excited about the future of that. All right, great. Thanks, Andy.

Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now turn the call back over to Andy for any closing comments.

Thank you, everyone, for the questions, and thank you, Operator, and thanks to everyone else for joining us today. Our second quarter and first half results demonstrate continued progress we're making across the business. Our strong segment continues to grow. SLS is delivering stronger profitability, and we're expanding our enterprise relationships across several attractive markets. As we move through the second half of the year, our priorities remain pretty clear, continue to drive profitable growth, deepen customer relationships, convert our pipeline into new business, and remain disciplined in how we invest and allocate our capital. The platform we have built gives us multiple avenues to create value as we continue to scale. We are confident in the direction of the business and excited about the opportunities ahead. I want to thank our employees for their continued dedication, our customers for their trust and partnership, and our shareholders for their ongoing support. We look forward to building on this progress and keeping you updated in the quarters ahead. That concludes the call, and thank you, everybody.

Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.