A quarterly record in sales in Q4 of 2023 helped propel Top 40 distributor Stran & Company (asi/337725) to its best-ever annual sales total last year. And, after sustaining a loss in its first full year as a publicly traded company in 2022, the Quincy, MA-based firm nudged out an after-tax profit in 2023.

Those are some of the key takeaways from financial figures that Stran released to the public on Thursday, March 28.

According to the report, Stran increased sales in 2023 by 28.7% year over year to $75.9 million, up from $59 million. Those revenue totals, however, didn’t quite paint the whole picture, as they leave out sales from distributors that Stran acquired in 2022 and 2023 before the acquisitions closed – a required way of reporting for publicly traded firms, executives said.

Speaking to ASI Media, Stran said that if total full-year sales for the brands/companies Stran acquired in each of the past two years were counted in the annual sales sum-ups, then the Top 40 distributor’s total revenue in 2022 was $64.3 million and its total sales in 2023 were $82.08 million – a jump of 28%.

No matter how you cut it, the 2023 annual sales totals were records for Stran. The $23.3 million the company generated in Q4 2023 was a year-over-year rise of 27.5% and the single best quarter for sales that Stran has had in its history, which stretches back to the 1990s.

Industry-wide, distributors collectively increased sales, on average, by 1.2% in 2023 to $26.1 billion – an annual record despite the relatively anemic growth rate, ASI Research shows. Q4 distributor revenue was essentially flat.

“We’re beginning to realize greater efficiency and economies of scale that will continue to enhance our profitability.” Andy Shape, Stran & Company (asi/337725)

Stran has struggled with profitability since going public in late 2021, as it has incurred new costs from being traded on the stock market and invested heavily in acquisitions, talent and infrastructure, especially technology enhancements.

Still, CEO Andy Shape, Counselor’s 2023 Person of the Year, has predicted that profitability would return as growth efforts bore fruit – and the forecast has come true of late.

Stran’s net income was positive in Q3 ($684,609) and Q4 ($883,317) of 2023. Those gains offset losses from earlier in the year, resulting in a full-year net income of $35,058, though that didn’t translate to annual earnings per share, which were essentially $0. Basic earnings per share in Q4 in particular were $0.05.

“We’re beginning to realize greater efficiency and economies of scale that will continue to enhance our profitability,” said Shape, a member of Counselor’s Power 50 list of promo’s most influential people. “We eagerly anticipate further benefits from our growth initiatives.”

ASI Research shows that #promproducts distributors overcame many challenges to set a new industry sales record in 2023. This report is a deep-dive into the numbers, nuances & stories that made 2023 & a look forward to 2024. https://t.co/kHnQmN08Ev @asicentral @NKucsma_ASI

— Chris Ruvo (@ChrisR_ASI) January 26, 2024

Some other highlights: Stran’s gross profit increased 50.2% in 2023 to approximately $24.9 million. Recurring organic sales, defined as revenue that doesn’t stem from the four distributors Stran acquired over the course of 2022 and 2023, was up 16.6% to $61.2 million last year.

While Stran posted a loss from operations for the year of $1.14 million, things got better as 2023 went on. In the fourth quarter, for instance, Stran had earnings from operations of about $1.07 million. Gross profit in Q4 was up 63.5% on an annual basis to $8.7 million.

Fueled by capital that came with going public, Stran purchased Premier Business Services, GAP Promotions (asi/199882) and Trend Brand Solutions (asi/346428) in 2022. The run continued with the Q2 2023 acquisition of T.R. Miller Co. Inc. (asi/272250) – a branded merchandise provider with a 47-year history.

“Each acquisition has delivered crucial strategic benefits to Stran and our operations, including the expansion of our geographic reach, bolstering our warehousing and manufacturing capabilities, and attracting esteemed clients,” said Shape. “While we continue to actively explore M&A opportunities as they emerge, our primary focus is on nurturing our organic growth and optimizing the benefits of our existing acquisitions.”

Stran ended 2023 with approximately $18.5 million in cash and investments. The firm ranked 34^th on Counselor’s most recent list of the largest distributors in the industry.