During the first six months of 2023, Top 40 distributor Stran & Company (asi/337725) generated total sales of about $33.2 million, an almost 23% increase compared to the same period the prior year, according to a financial report the company released Monday, Aug. 14.

Despite the sales rise, profitability continued to elude the Quincy, MA-headquartered firm, which posted a loss of about $1.53 million, or -$0.08 per share. The sales jump wasn’t enough to completely offset an increase in operating and purchasing costs, leading to the loss, according to Stran, which is publicly traded on the Nasdaq.

Andy Shape, Stran & Company

For the April-through-June second quarter of 2023, Stran increased sales about 18% year over year to nearly $17.5 million – a gain realized through stronger business with existing customers and work with new clients. Continuing a trend from Q1 of this year, contributions from acquired companies and organic growth helped fuel the revenue rise: Organic growth was 11% in the quarter, Stran reported.

In line with the half-year performance, Stran experienced a loss in Q2 – -$838,330, or -$0.05 per share. Stran has made a total of four acquisitions in 2022 and 2023, with the most recent – buying T.R. Miller Co. Inc. (asi/272250) – coming in June. Costs tied to integration are among those factors that have detracted from profitability.

“While expenses have increased in the second quarter as a result of integration costs and onboarding personnel from the T.R. Miller acquisition, we are carefully monitoring expenses and expect to realize synergies from the integration of all of our acquisitions,” said Stran President/CEO Andy Shape, a member of Counselor’s Power 50 list of promo’s most influential people. “Given our continued revenue growth and traction within the industry, we look forward to leveraging our fixed costs to drive margin expansion and long-term profitability.”

Andy Shape, CEO/president of Stran and Counselor’s 2023 Person of the Year, discusses the company’s journey from basement-based start-up to publicly traded $64.3-million in sales distributor.

Shape noted that the other three distributorships that Stran acquired since going public – Premier NYC, GAP Promotions (asi/199882) and Trend Brand Solutions (asi/346428) have been fully integrated into the company’s operations. He asserted that Stran has gained market share and that its primary focus will now be organic growth, though the firm remains open to acquisitions that “expand our product offering and geographic footprint.”

While Stran has experienced a net loss in 2023, Shape shared that the company’s gross profit increased by 35% and gross profit margin improved to 29.1% – positive signs, he said. The company has about $25.5 million in cash and investments.

“Rather than contracting, we are growing,” said Shape. “The fact that we have expanded our national reach, secured new customers, and entered into new verticals is a testament to our leadership status within the industry.”

Shape was named Counselor’s 2023 Person of the Year. In significant part, he received the honor for his leadership in taking Stran public – one of the boldest moves by a promo firm in years.

Based on reported 2022 North American promotional product revenue $64.3 million, Stran & Company ranked 34^th on Counselor’s most recent list of the largest distributors in the industry.