Organic revenue growth of 30% helped drive an overall year-over-year sales increase of 42% in the third quarter of 2023 for Stran & Company (asi/337725), a publicly traded Top 40 promotional products distributor.

The Quincy, MA-based firm posted sales of $19.3 million in the three-month period ended Sept. 30. Stran’s rate of growth far outpaced the industry average in the third quarter. Collectively, distributors’ sales increased 2.4% in Q3 – the slowest quarterly growth rate since the recovery from COVID-induced declines began, ASI Research shows.

And it wasn’t just about topline success. While Stran has primarily sustained quarterly losses amid acquisitions, technology and personnel investments, and new costs associated with being publicly traded since its stock started trading on the NASDAQ in late 2021, the company generated net income of $684,609, or $0.04 earnings per share, in the third quarter of 2023.

Relatedly, gross profit rose by 50% to $6.4 million, with gross profit margin increasing to 33% compared to 31% for the same period last year.

“We believe our growth and net earnings this quarter reflect infrastructure and technology investments, marketing initiatives and strategic acquisitions we have pursued in recent quarters while managing our expenses,” said CEO Andy Shape, Counselor’s 2023 Person of the Year and a member of Counselor’s Power 50 list of promo’s most influential people.

For the first nine months of 2023, Stran’s total sales have tallied about $52.55 million, representing year-over-year growth of 29%. Over the same period, Stran has sustained a loss of $848,259, or -$0.05 per share, but that’s better than in 2022 when loss was nearly $1.7 million, or -$0.09 per share.

Shape has maintained that the losses were part of the growing pains of going public and building the infrastructure and team necessary for Stran to power exponential growth – and ultimately strong long-term profitability.

“We believe our growth and net earnings this quarter reflect infrastructure and technology investments, marketing initiatives and strategic acquisitions we have pursued in recent quarters while managing our expenses.” Andy Shape, Stran & Company (asi/337725)

He believes Stran’s strong Q3 showing bellwethers that future, and pointed out two notable recent wins. The distributor inked a three-year contract estimated to provide up to several hundred thousand dollars in annual spending with a leading medical group, and launched a loyalty redemption program for an online sports and entertainment customer. The program generated 22,000 orders – translating to $2 million in sales – in the first week alone, Stran reported.

“We plan to continue to apply our growth strategy by innovating and investing in technology, initiating marketing efforts to help deepen and develop client relationships, and selectively pursuing acquisitions to sustain our growing operations,” Shape said.

Stran has made a total of four acquisitions in 2022 and 2023, with the most recent – buying T.R. Miller Co. Inc. (asi/272250) – in June. While the potential for more acquisitions remains on the table, organic growth is Stran’s primary focus, as is making the most of the acquisitions already completed.

Stran executives are optimistic about what lies ahead.

“Reflecting our confidence in our financial position and the outlook of the business, during the last quarter we continued to conduct our stock repurchase program initially announced in February 2022,” said Shape. “As of September 30, 2023, we have repurchased a total of approximately $3.4 million of stock over the course of the program, and management team members have also reported purchases of company stock in the open market.”

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.