Stran & Company Reports 17.9% Revenue Growth in Q1 2024 Despite Net Loss

Stran & Company, Inc. reported a revenue increase of 17.9% for the first quarter of 2024, achieving total sales of $18.8 million compared to $15.97 million in the same period of 2023. The growth was attributed to higher spending from existing clients and new customer acquisitions, bolstered by the acquisition of T R Miller Co., Inc. in June 2023. Despite the revenue growth, the company experienced a net loss of $487,000, slightly higher than the $484,000 loss reported in the prior year, primarily due to increased costs associated with sales and operating expenses.

The cost of sales rose significantly by 25.1% to approximately $13.2 million, leading to a gross profit of $5.6 million, which represented a gross margin of 29.8%, down from 33.9% in the previous year. This decline in gross margin was largely due to rising product costs from vendors. Operating expenses also increased by 4.8% to $6.3 million, although as a percentage of sales, they decreased to 33.4% from 37.5%, indicating improved operational efficiency.

In terms of operational metrics, Stran & Company reported a total of approximately 2,000 active customers, with program clients accounting for 86% of total revenue, up from 81.7% in the previous year. The company’s total assets as of March 31, 2024, were approximately $47.9 million, with stockholders' equity at $35.2 million. The company also reported a cash and cash equivalents balance of $9.5 million, reflecting a net increase of $1.4 million in cash during the quarter.

Strategically, Stran & Company has made significant moves, including the acquisition of T R Miller, which is expected to enhance its market position and product offerings. Additionally, the company entered into a factoring arrangement to provide accounts receivable financing, while terminating its revolving line of credit with Salem Five Cents Savings Bank. Looking ahead, Stran & Company anticipates that its current cash levels will be sufficient to meet operational needs for the next 12 months, although it may seek additional financing for future growth initiatives. The company is also focused on improving its internal controls and financial reporting processes following the identification of material weaknesses in its internal control over financial reporting.