Stran & Company (asi/337725), a Top 40 promotional products distributor, increased sales 62.5% year over year in the first quarter of 2022 to about $12.3 million, but posted a loss of nearly $546,000 for the three-month period.

That’s according to a financial report the Boston-area company released on Friday, May 13. Data showed the net loss translated to a per-share loss of $0.03. Stran became a publicly traded company in November 2021.

Andy Shape, Stran & Company

Despite the soaring topline sales gain, the loss occurred mainly due to integration expenses related to the Q1 acquisition of GAP Promotions, continued expenses related to becoming a publicly traded company and higher purchase costs, Stran noted.

Still, Stran executives asserted that the stellar sales performance indicates the true direction the company is headed. While revenue from the GAP acquisition added to the quarterly revenue increase, organic sales were up 50.8% year over year on their own, said President/CEO Andy Shape.

Shape noted that Stran secured a multiyear contract with a large, nationally recognized healthcare company, which he said reflects the distributorship’s ability to address the complex marketing needs of its customers.

Stran CEO Andy Shape recently appeared on ASI Media’s Promo Insiders podcast to talk about everything from the firm going public to the future of the promo industry.

“The healthcare industry represents a significant market opportunity for promotional products,” said Shape. “This contract alone is expected to generate over $6 million in annual recurring revenue for Stran with the ability to expand our engagement as we continue to perform.”

According to Shape, other positives include the fact that Stran decreased operating expenses as a percentage of revenue, despite acquisition and integration costs and other significant expenses. He noted that the company concluded the quarter with $30 million in cash reserves and no long-term debt.

“We are well capitalized to internally fund and execute both our organic growth and acquisition strategies,” Shape said. “We expect to continue and improve upon our track record of profitability in 2022 and beyond.”

With reported 2020 North American promo product revenue of $46.9 million, Stran & Company ranked 32 on Counselor’s most recent list of the largest distributors in the industry. Counselor’s 2022 Top 40 list will be revealed this July.