SWAGW

• Company history: Started over 30 years ago as a small two-person operation, now a publicly traded leader in promotional marketing with over 30 Fortune 500 clients. • Financial results: Q3 sales up 29% year-over-year to $26 million; nine-month sales up 56.7% to $87.3 million. EBITDA improved by $2.8 million year-to-date. • Segment details: Stran segment revenue up due to existing clients and new customers; SLS segment revenue from Gander Group acquisition. • Operating expenses: Grew 30.3% YTD but as a percentage of sales declined to 31.3%. • Tariffs impact: Elevated tariffs increased product costs, compressed margins, and caused buyer hesitation in loyalty and casino segments. • Share repurchase: Bought back ~267,000 shares in Q3. • Acquisitions: Actively evaluating acquisition opportunities, focusing on transformative deals to drive growth.

• Q4 is historically the strongest quarter, and the company feels positive about Q4 performance. • Focus on sustained profitability moving forward, with priorities including deepening client relationships, increasing operational efficiency, and maintaining financial discipline.

The Stran segment achieved nine-month revenue of $60.3 million, up from $52.2 million the previous year. The Stran Loyalty Solutions (SLS) segment, including the acquired Gander Group business, delivered $26.9 million in nine-month revenue compared to $3.5 million last year. The Stran segment is the cornerstone, driven by deeper client relationships and new enterprise wins, while the SLS segment saw growth from the acquisition of Gander Group.

• Elevated tariffs led to increased product costs for direct import orders, compressing margins as not all costs could be passed on. • Uncertainty surrounding tariffs created buyer hesitation in loyalty and casino segments, impacting top-line activity and profitability.

Q: How are tariffs accounted for from an accounting perspective? Does that pass on to adding more revenue?

A: Tariffs increased product costs, some passed to customers increasing revenue slightly, but more costs weren't offset, resulting in a seven-figure direct cost impact. Also, buyer hesitation affected Q3.

Q: Do you guys feel like you're still gonna be positive net income for Q4? Or how are you feeling about year-round cash flow positivity?

A: Historically Q4 is strongest for Stran segment due to end-of-year holidays, feel good about Q4 and sustained profitability moving forward.

Q: How should we think about potential contraction in the economy? How does the business typically perform during contractions?

A: Business has low capital expenditure, majority costs are human capital and overhead. Spread across multiple verticals, balance sheet provides competitive edge; can pivot and consider acquisitions during economic contractions.

Q: What is the methodology that you use to find acquisition targets?

A: Get inbound inquiries, attend industry events where introduced to potential targets, focus on scrutinizing acquisitions to drive immediate impact and create win-win scenarios for both parties.