Counselor Top 40 distributor Stran Promotional Solutions (asi/337725) announced this week that preliminary unaudited results show that the firm increased revenue more than 10% in the first six months of 2024 compared to the same half-year stretch in 2023.

The publicly traded company also shared that gross profit margin rose during the six-month period on an annual basis, increasing from 29.4% last year to 31.7% in the January-through-June months of 2024.

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Stran CEO Andy Shape, a member of Counselor’s Power 50 list of promo’s most influential people, said market share gains helped fuel the company’s performance. So did onboarding new customers, increasing work with existing clients, enhancing technology capabilities and broadening the firm’s footprint to where it’s generating business in more geographic regions of the United States.

“We have consistently maintained a strong balance sheet and are proud to report cash, cash equivalents and investments increased to an estimated $21.5 million as of June 30, 2024, providing us a war chest to capitalize on synergistic and accretive (merger and acquisition) opportunities to complement our organic growth,” Shape asserted.

The preliminary word – a projection – on Stran’s half-year results comes following a financial reporting delay that resulted from the firm’s former auditor running afoul of the Securities and Exchange Commission (SEC).

An auditor of publicly traded companies ran afoul of the SEC for alleged fraud, and that's causing headaches for the company's unfortunate clients (who did no wrong), including a Top 40 #promoproducts firm. https://t.co/Uemm8Jf2zt

— Chris Ruvo (@ChrisR_ASI) May 15, 2024

Stran has a new auditor, Marcum LLP, but official audited results for the year’s first two quarters aren’t ready yet. The Quincy, MA-based firm said it’s partnering with Marcum to complete the full-picture financial report but didn’t give an exact timeframe on when the numbers will be available.

Because the results are still preliminary, Stran didn’t report a firm revenue number for the first six months of 2024. During the first six months of 2023, the company generated reported total sales of about $33.2 million. A 10% increase on that would put revenue in the approximate range of $36.55 million during 2024’s half-year.

Stran’s preliminarily reported sales results during the first six months of the year were better than the industry average for distributors.

“We are working diligently to finalize our financial statements and look forward to formally reporting the results upon completion of the process.” Andy Shape, Stran Promotional Solutions (asi/337725)

Last month, ASI Research’s Distributor Quarterly Sales Survey reported a 1.3% increase for year-over-year sales in Q2 for distributors collectively, a rise that came after the industry’s first distributor sales drop in almost three years during Q1. 

The industry’s extra-large distributors – those bringing in $5 million and above annually, a group to which Stran belongs – increased sales on an average annual basis of 4.1% in Q2 and 2.5% in Q1.

In May, the SEC announced a $14 million settlement with now-defunct accounting firm BF Borgers and its owner – the auditor Stran had been using to review its financials.

The SEC said BF Borgers engaged in “deliberate and systemic failures” to comply with standards of the Public Company Accounting Oversight Board in audits and reviews incorporated in 1,500 SEC filings between January 2021 and June 2023.

The BF Borgers downfall meant that companies that had relied on the firm for audits, like Stran, needed to have new audits performed. Stran and other BF Borgers clients were not accused of wrongdoing.

Based on reported 2023 North American promotional product revenue of $82.1 million, Stran Promotional Solutions ranked 27^th on Counselor’s most recent list of the largest distributors in the industry.