Stran & Company, Inc. (SWAG) Earnings Call Transcript & Summary

Okay. So clock just struck 10. I think we'll get started here. So welcome to our fireside chat with Stran. Stran is a leading promotional products company based out of Quincy, Massachusetts. I'm delighted to be joined by CEO, Andy Shape, who founded the company in 1995 and has grown it from a $240,000 revenue company to $59 million at the end of 2022. So the way we're going to do this fireside chat is Andy and I will engage for about 30 to 40 minutes, and then we'll open up the floor to Q&A. So Andy, thank you so much for being here with us.

Thanks, Eddie. Thanks for having me, excited to talk more about Stran and show some people in on some things maybe they didn't know.

Great. Why don't we start by you're giving us maybe a brief overview of your key products and the value proposition you get to some of your customers.

Sure. Yes. So as you had mentioned, we're a promotional products or branded merchandise provider to our customers. And we have over 35 Fortune 500 customers. So we try to go after large enterprise accounts. The products that we sell is really anything branded, whether it's a T-shirt, a hat, a pen or even banners or napkins. So if you just look around every day look around, you'll be shocked if you start to actually be conscious and look around the amount of products that are out there that are branded with company logos that are given away. It's actually a $25 billion industry. So there's a lot of products out there that are branded, and that's what we do for our customers as we help them source those products, we find the right products for them and then help them distribute them through a supply chain network that we've developed as well as offer an e-commerce way for them to have access to those products. So it's a comprehensive solution to use. That type of advertising is a different form of the advertising.

Got it. And given strong almost a 30-year-old company, maybe could you explain how you started strong and how you've seen that evolve over the years? And maybe touch on what COVID did to the whole industry a little bit?

Sure. So yes, I went to college with a gentleman named Andrew Stranberg, and we worked -- we went together and decided that we were very different unique individuals, and we should start a business together, but we didn't know what to do. So we both got some different jobs. I went into public relations. He was in sales. And his father did this type of business kind of as a what you call now a side hustle. And he started saying, "Hey, maybe we both weren't happy with our own job and said maybe we should really do this full time." So we started selling holiday greeting cards, almost door-to-door to corporations. We go into large buildings and say, you want to buy holiday cards or Christmas cards? And most of the time, they say, yes, the receptionist or the person at the front desk would say, "Yes, I'm that person." And then we'd ask them who buys your promotional merchandise or your T-shirts, your hats, your pens, any of your collateral that you may send? And a lot of times, it was the same person. So we started to evolve that business and then we started to recognize that as e-commerce started to come about, we could use that as a means to give their people access to that, so they can use it to engage with customers, engage with their employees, market themselves, brand themselves, really give those things out as gifts because they started to see people really recognize when they got something with a branded logo on it that they remembered the brand and they appreciated it. So we started to evolve. And from Andrew and I just as the first employees really working from home, then hiring a couple of salespeople, formulating our own warehouse, hiring some more infrastructure, getting an office and then just evolving. So as we -- as I said when we started, just Andrew and I, we had an office and now we're up to over 100 employees and almost $60 million in revenue last year. So we've really seen the company evolve a lot. We're proud of what we built, especially within an industry that's so big. I mean, as I mentioned, it's $25 billion, but there's over 25,000 competitors in it. So there's a lot of people, and we've really set ourselves up as last year being #34 out of 25,000, and we'll continue to grow. This year, we'll probably be closer to the top 30 or 25 with almost $60 million in revenue.

Yes. And maybe if you could touch on how COVID might have changed the industry landscape a little bit here?

Yes. So there's a couple of things that happened with COVID. First, when COVID hit, like every business, we weren't sure what was going to happen. People were going to stop spending, what they were going to do. So there were 2 things that happened during COVID. One was our industry shifted a lot to PPE, personal protective equipment, things like masks and sanitizer, anything along those. So we did shift to that, but that was only a temporary really demand for those products. That demand has really diminished quite a bit. But it did -- we did pick up a few million dollars of a lot of other in revenue, and a lot of other of our competitors also picked up significant revenue for that. So that was the first thing is showing how resilient this industry is and how quickly we can pivot because of the supply chain that we already have established, whether that's in China or offshore or even domestically is taking advantage of the supply chain. So that was the first thing. The second thing that happened is there were these -- companies actually had a surplus of budget for marketing because they stop -- the government was funding people to keep people in business and the company didn't really slow down that much. So they had these budgets that they typically had spent an event-driven promotions, whether they or go to give merchandise out. So they had that budget, but that shifted to them much more targeted and direct marketing with identifying these are people that we wanted to reach out to somehow. So we would send things to whether it's prospective customers, new employees, people you're recruiting as thank you gifts to customers or partners, and they started to see how effective that was because people started receiving things at their homes and it was much more of a personal one-to-one connection rather than handing it out. So some of that budget shifted from event-driven, whether it's for trade shows, even the cost of the show itself to distributing merchandise that was branded to people's homes, and they saw the effectiveness of it. So that really hasn't gone away, and they've really developed that into some marketing campaigns that are part of now their advertising budgets. So that's one big shift that we saw as it really got us a little bit more exposure to show how effective this form of advertising can be.

Got you. Would love to learn more about just the organic and acquisition strategies. Maybe if we could dive into the organic first and then talk about acquisitions after that. Now you guys have had a few big contract wins recently. If you could maybe dive into how you guys are generating organic growth going forward, that will be really helpful.

Sure. So our business -- a lot of our business comes from -- has come historically from referrals. We've been in business for almost 30 years. We're a top player, and we deliver solutions to our customers. When we were strong promotional solutions is what is our DBA and because we look at coming up with solutions for our customers. So a lot of times, when there's turnover within companies, when they leave and go to a new company, they say, Stran really helped us in the past, I'd like to bring them to my new company while we retain the business from the old company. So that's where we've seen a lot of growth happen as when people move companies, they recognize what we were able to do for their previous company and they come to -- that they're old companies so they bring into their new companies. So that's a lot of what we've done. But we've also started to look at enhancing our lead in demand gen initiatives to get more exposure for people that haven't heard strong. So we've been doing paid search. We've been doing more robust search engine optimization, more paid content, more content development to get more people interested in Stran and then showing case studies and having a sales team that reaches out to them to add new logos to our customer base to really attract new customers. So organically, what we really are trying to do is establish our foundation because the acquisition strategy is a big part of our growth. Yet, we don't want to lose our identity of who we are and what we do and what value we deliver to our customers. We want to continue to promote strong with what we do and the value that we deliver to our customers. And as we have acquisitions that come in, we identify areas where we can go, expand that customer base with the services and the value that we can provide to them, whether that's using technology, using our creative team, using our supply chain and sourcing capabilities, our buying power or all that combined, that really can take maybe a $5 million to $10 million company that hasn't had those resources now they do, we can really expand that further as well as minimize some of the operating expenses those that may be normal part of the G&A that they may not have now that they're part of a larger organization.

Could you maybe give us an example of that occurring for one of the companies you acquired?

Sure. So for instance GAP, we acquired them last year. It's been a great acquisition. A woman, [indiscernible], she started that and is still involved with Stran, but they've done a great job in almost exclusively the beverage vertical. And one of the things that we've done with them is that we had 2 -- they had an office, we ended up shutting down the office. It was a great office, but we just -- it was redundant. We didn't need it. It was in Gloucester, Massachusetts. We shut that office down. So we see done some of that. Some of the general operating expenses, whether it's insurance, whether it's legal, whether it's accounting, whatever that may eat some of those costs just have gone down. So that's some of the cost-saving measures that we've been able to it. But more importantly, is the growth opportunities that we've seen with them is going into their larger accounts and saying, here's what we can offer you and really trying to get in there and expand that even further.

And what affords you that benefit? Is it just your working capital position right now that they can visibly see those customers?

I mean that's one of them in our working capital that they can look and they can say, "All right, this is a company that we know that we can grow with that we know is not going to be here." They're going to be around. They're a leader and they just freed some confidence. So it gives us some of that kind of added credibility, first and foremost. But secondarily, as we go and not just say, hey, we have a bunch of money, we're going to do a great job. We only have to earn it and say we're going to do a good job through marketing, creative sales and delivery for them. So it's not just that. It's -- that kind of gets us in the door for more opportunity. But then when they see what we can do from -- like I said, the technology to sourcing, all of that, they say, wow, you guys really are valuable to us. And it's -- but we're not losing sight of what they liked about the previous company, too. So we keep the same people in, but we add additional resources to that. But those resources are resources we already have. So they're almost a fixed cost to us. So it's not like we have to go hire additional people to add that value.

Got you. Got you. Would love to learn more about your acquisition strategy and maybe what the ideal target looks like, what type of multiples you're seeing in the market? And what would be the perfect acquisition for you guys?

So the perfect acquisition, I mean, there's really -- there's so many various to it, so it's hard to pinpoint what a perfect acquisition target would be. But anything currently right now in the say over $5 million and say under $20 million would be -- is really a good place for us to be right now. Geographically, balancing out right now, we're based in Boston. We did an acquisition in Houston, Texas. We did an acquisition in 2021 -- sorry, end of 2020 Indiana, we have an office in South Carolina. So West Coast would be a great opportunity for us, so geographically, but also value-added services. So right now, the majority of our business is subcontracted from decoration and fulfillment. The most recent acquisition that we announced, T R Miller, is based in Boston, and they have a 25,000 square foot warehouse where they do fulfillment distribution as well as in-house decoration. So that looks like that's additional services that we can bring in to a little bit more vertical. We're not abandoning our 3PLs or abandoning our subcontractors because the business that we have internally is larger than that can probably support. But we want to do specialty fulfillment, specialty decoration, on-demand capabilities there that really are more value added and we can have more control over. So that's an ideal target as someone who has some of those internal resources, whether it's embroidery, decoration or some technology that we look at that we can then go and integrate with Stran and take advantage of not only for the current customer base of the customer acquiring of that target but also some strong customers and really bring them together and really take advantage of it company-wide.

Yes. And I'd imagine that should reflect well on margins. Maybe talk to me about other margin drivers. It looks like you guys have historically done about a 30% gross and you're leveraging public overhead now since you became public. What's driving gross margins higher and operating margins higher going forward?

So that's a big initiative for Stran in 2023 is driving margin and obtaining profitability. So that's a big driver for us this year and a big part of our goals. And there's a lot of different ways we can do it. But the first one is just being aware of the margin and really communicating that to our entire team of people and not -- and correcting low margin where we need to when there's no reason why we shouldn't be making more margins. So that's the first thing is awareness and then monitoring, enforcing that within our organization. That's the first one. The second one, which I've talked about in the past, is taking advantage of better buying relationships because we can do prepay discounts. We can establish better terms with our vendors. And right now with capital being at a high cost for our suppliers, having that ability to be able to do that with that makes us a much more valuable partner to them, where they may want to do business with us to give us better pricing because they know they're going to get paid and get paid quickly and sometimes we can take advantage of upwards of 2 to 3, maybe even 5% if we prepay to get those discounts. So that will drive it down. And then there's other ways we're looking at more soft costs, such as the implementation of is creating more efficiency, so there's less human capital involved in that. Also creating freight as a greater cost center or a greater revenue generator right now and more profitability in freight because right now, it's -- we do -- freight is a large item on our P&L and how we can maximize the freight revenue that we get in freight profitability as well as just as being more aware. I mean that's the largest one is being aware of that, adhering to our budget that we have in our forecast and really making decisions based on the results, both leading and lagging indicators.

Yes. Got you. And then is there any opportunity, say, 5 years down the road for some type of vertical integration where you guys reach a certain scale and maybe you go out and buy one of your suppliers? Is that an opportunity you might see?

It could be an opportunity, yes. So we don't want to get ahead of ourselves. And right now, this industry is made up of both suppliers and distributors. We're on the distributor side. We do some of our own direct importing, but we take advantage of our supply base within the United States because it limits our inventory exposure, it limits our capital investment, just limits really that capital intensiveness of it. But in the future, that is something that we are looking into and looking at is that something that makes sense for our shareholders, our company, our customers most importantly and then within the industry as well. So it is something that we want to look at. The first step is much more from a decoration standpoint and fulfillment and distribution because that's a big part of what we do is when a customer says, "I want to use this, I want to use promotional merchandise or branded merchandise as a form of advertising, how do we do that?" If we just go and produce it to them and drop it on their doorstep, they don't know what to do. It's very difficult for them, and they have to go and maybe put in the closet and where they -- and then they have to hire someone to go manage that. Instead, we said, "No, we're going to handle that all for you." There's an online store where you can go on and you can see visibility into the products. We have different user groups that show different prices, different inventory that people can go and then they have access to those products virtually. They order them and then we seamlessly ship them for them, and it's much more effective and efficient for them. So that whole, we call it a program management, is what we thrive at and really where we add our greatest value. So if we can go and turn some of that more vertical from going and using 3PLs or using third-party decorators, we want to take advantage of it. Then the first step of that is the Trend acquisition that we did in Houston has about a 5,000 square foot warehouse that we're using right now for specialty kitting. So someone wants a box. And it's more specialty, where we have to pull multiple products and maybe put in a handwritten note things along those lines. We're using our own warehouses because we have more control over it. And it's also very expensive because labor and -- it's labor-intensive to use a 3PL. So instead, we bring that in-house, we can control that much better and still be able to charge the same amount or reduce our costs. So we started with the Trend and expanded that. We've gone into T R Miller, which is the next one that we announced in late January that we're planning on closing shortly in this quarter and expand that even further. And then look at expanding that, whether that's at T R Miller or with other regional fulfillment and decoration locations is really what we're looking at. And then looking at going vertical with the supply chain as well supplier become our own supplier. Without -- again, we're never going to abandon our current suppliers because we've had partnerships with them for nearly 30 years, and we rely on them, and we're not looking to get rid of them, but maybe diversify that a little bit over time.

Got you. I'd imagine the program management tools that you give your customers leads to a more sticky customer base. What's historically been the retention of your customer base? And when was this program rolled out? And how has it been doing thus far?

So we started rolling out programs back in the 1900s, which is crazy to say. But so probably 1997 or 1998 was the first program we did. I think the first program we did was for Converse, where they came to us and said, "We want to do some hats and send them out to all of our retailers, and we did it literally out of our garage like it's -- like the American story that you hear." We literally did it. And even our UPS driver was helping us fulfill it like it was pretty funny. And then we started expanding that and adding technology into that, and then we would go to companies like Boston Scientific and say, "Hey, let us spin up an online store for you where your sales team can go and order this merchandise and then we'll ship it worldwide to you." And that was back in the early 2000s that. So not a lot of people are offering on that. So we're really leading the charge of that because we've been doing it for over 20 years is using technology and using fulfillment distribution for over 20 years. So we've gotten pretty good at it. There's always room for improvement and advancements in technology and advancements in machinery and everything else, but we're so far into it. We have over 280 programs that we have right now for various customers. So we're good at it.

Great. Shifting gears here a little bit. I saw you filed a shelf yesterday. Just want to get your overall thoughts on that.

Yes. So to be clear with everyone, and that's a good timing for us to be able to talk about this is we're not planning on raising capital. We went public and we raised money at $4.15. We did a secondary capital raise at $4.97. So our average, when we raised the capital that we did is around $4.56 is where we raised it. So -- and right now, we're trading at -- I think today, we're in the $1.60, $1.70 range. So myself and our internal shareholders at Stran, Andrew Stranberg and our employees, we're not looking to go raise money at those rates and be diluted ourselves. So looking at that, our shareholders, we're not planning on raising capital in the near future unless there's some sort of reason to do that, whether the share price goes up for some reason, whether there's some sort of transformative opportunity for the business, where there's an opportunity. So it's really just us preparing because we are shelled out. We were shelf-eligible in December. And we just want to be prepared. So if something does come along where we have a need to raise capital, whether that's very large acquisition or whether that's some sort of other opportunity where we need capital that's going to really add value to the business and add to the shareholder value, then we want to be able to take advantage of that without having blocks in the way of getting approvals and having a file. So just getting that out of the way, so we're prepared. It lasts for 3 years. Again, we're not looking to raise capital in the near future. Our balance sheet at the end of the year had nearly $25 million in cash, and we don't need to raise more money right now. There's no reason for us to do it. So we're not looking to do that, but we just want to be prepared.

Got you. So just to be clear, there's no real use for that capital right now. I mean, you guys have a really solid balance sheet and you're more or less just using this as a line of credit.

Exactly. And with the only reason we would -- the times we would take advantage of it if the share price was reflected of what we think our true value is. So getting it back up to IPO levels or close to that or above that. Otherwise, it wouldn't make sense for us to take advantage of that because we don't need the capital. So first would be the share price that would need to be reflective of the value. Secondly, there will need to be a reason for us to do it, as I mentioned, maybe some sort of acquisition or some other where we need capital -- some other event where we need capital. And then also just making sure that's in line with what the long-term shareholder value and what that does from a dilution stand. So there's a lot of different factors into it. This is just preparation for it in case that does come up. And we feel that it's in the shareholders' best interest for us to do that, so we're prepared.

Right as one of the largest shareholders of the company, I'm sure you'll use that prudently.

Exactly. I don't want to be diluted myself. I've spent nearly 30 years building this company. I mean, it's -- I look at this as it's my baby that I've started and I want to see it do well. I want -- and it's not just about seeing the share price do well, we want to create something unique in this industry that is different, that is other people aren't -- that other people aren't doing where our employees are proud of what we do, our customers are proud who we are and appreciate what we do for them and grow to be a true leader and not just looking out for the share price, looking out to building a business where the share prices were reflective of the true value of the business. And that's what we're trying to do. And we didn't have a concept or an idea when we went public. We've been in business for almost 30 years. And we've been profitable for all the years. And for every year up until we went public, we've been profitable for 26 years in a row. And now we're really shifting our gears a little bit of how do we grow the business, how do we put infrastructure in place so that we can create something unique that's going to drive significant shareholder value, not just in lifestyle business which is very prevalent in this industry. A lot of people have a nice small business where they make good money, they're happy with being $3 million to $4 million, and they're happy with it. That's not what we're trying to do. We're trying to create something unique and special.

Got it. Got it. Wanted to learn more about current industry conditions, given some of the expectations about marketing, pullback from companies currently. You just give us your thoughts there and maybe what you're seeing in the market currently?

Yes. So we've seen -- we have -- we did have -- at the end of last year, we had a good Q4 -- we had a very good Q4. And as I mentioned even in our earnings call, we had very good bookings in -- through February, we had good bookings. So we saw that there is uncertainty. And the one thing that I would say is we've seen the order volume coming down a little bit. So people aren't spending maybe doing as many projects, but the projects that they do are larger dollar value. So I think people are shifting from really doing a lot of things to maybe, again, back to more targeted, okay, we have this in our budget, we want to be careful of what we're doing, let's go and work with someone for larger projects that are really going to make a quantifiable difference to our marketing. So we have seen a little bit of shift in the order volume coming down, but not too much of a shift in terms of the dollar figures. So there is some uncertainty. Obviously, we don't know. I haven't heard from -- that there should be in the next couple of weeks coming out of report from our industry called the Advertising Specialties Institute. They always do an update at the end of the quarter. And they should be coming out with what people are -- what all the other distributors and suppliers are saying, but it has shifted. And one of the things that has shifted is the supply chain as -- I had mentioned or as we've mentioned in the past. Last year, one of the biggest issues was supply chain. Where do you get products? We couldn't find it. It was harder to find inventory, the demand was there. And if you had products, it nearly sold itself. That's kind of foot flop now. A lot of our suppliers, there's almost -- I wouldn't necessarily say there's a surplus of inventory, but the supply chain is not as big. The demand might not be there as much as supply. So now it's -- we have to change our attitude a little bit and really go focus more on sales, marketing and trying to go work harder to get that business rather than working harder to find the products that our customers need. So it's kind of shifted a little bit where the supply and demand have kind of flip-flopped a little bit.

Is there any opportunity in this current market to maybe take some -- take share?

100% absolutely. So that's what we're looking at. So as I talked about earlier with our lead gen and demand gen and trying to attract new customers, as other people are saying, "All right, we're going to pull back on that, really not concentrate on that because we want to just state be conservative and try to figure out what's going to happen, we're going out and we're trying to attract those new customers." Conservatively, we're not going too aggressive with it, but there's -- in finding those customers who are spending, who do have needs, identifying them and then introducing Stran to them as a solution, which gives us an opportunity to really showcase what we can do for them and really start to earn their trust and over time, obtain all of that business, offer a program for them and add that value so they say, "Boy, you're a trusted partner," where it turns into what we call a competitive flywheel, we start doing more for them. It starts to spin. It spins faster because we're doing more valuable things for more people within it and we'll recognize more.

Got you. Got you. Okay. Great. I think at this time, we'll turn it over to Q&A. So if you have a question, please put it in the Q&A box, and I will answer -- I'll ask it for you. Andy, while we're waiting for questions to come in, maybe if there's anything we didn't touch on that you think might be important for the audience to know?

Yes. I mean in terms of current market conditions, I think that's probably the most that people are saying -- looking at and saying, what's happening with marketing budgets? Are they getting pulled back? And are you guys the first spend to go? And one of the things that I don't have a crystal ball, so I couldn't tell you, but I wish I did. But what I would say is what we -- what we're trying to do is really try to not simply go and do the exact same thing that we've done in the past, but we'll try to steal other marketing dollars and advertising dollars because showing the value and how they can get an ROI and the products and the services that we deliver to them. So that's one of the initiatives that we're really looking at is not just saying, how do we get them to do the same order? It's more -- how do we get them to shift from traditional radio advertising, television advertising, online ads, whatever it may be to this form of advertising because we can show them it's more effective? So it's really what we're trying to do is not necessarily get the same business but get new business from the same budget.

Got you. So we got some questions coming in here. Ryan wants to know what Stran plans to do to prove to the shareholders that the company is on the proper track to recover the IPO price and stop the continuous decline of the share price?

Sure. Yes, I think it's a long term -- it's long term. I mean we are looking to add value to the company by adding -- first and foremost, adding revenue, growing our business to become even a larger player within the industry. And while we do that remain profitable and then continue to try to drive profitability at scale. It's much easier to drive profitability. For example, public company costs alone are in the 7 figures, trying to absorb that within -- when we went public, a $39 million company, it's harder to absorb that than it is a $60 million or even $100 million -- or more $100 million company. So at scale, we can really try to -- we can really start to drive that profitability even greater. So that's the first thing is growing top line and then be aware of adding value to the company so that we are a leader in the industry, we're the premier company and that we can continue to grow and add that value because we have a strong balance sheet, we have a P&L driving that, that's spinning off positive cash flow. It just is going to take us a little bit of time because we have to build that infrastructure going from a $39 million company to a multi-hundred million dollar company, it doesn't happen overnight. If it does, there is potential that there could be larger problems that aren't sustainable. So we're being aggressive, yet responsible for our growth.

Yes. Yes. Jose Gonzales asked when the next census here is given it was very helpful to business last time and maybe what type of relationship you have with those guys? I believe it's every 10 years now.

It is every 10 years. So the last census was 2021. So we started the campaign in 2019. It won't happen again until -- 2028 is when the planning will start to start. 2029, I mean, that seems like a long way away. 2028, 2029 is when we would probably start delivering and 2020(sic) [ 2030 ] would be when we would finish it up. So it was a great program that was a really great example of how we use these products to change behavior to get people who participated in the census. That was the goal of it. A lot of people, especially in low-income neighborhoods where people didn't trust the census, this was education and say, "This is good for you. You want to fill this out." Don't be afraid, go fill it out because it will help you to get public funding for your neighborhood or for your area. And that's what we use the products to is to get them to listen. It's almost, hey, here's a product, listen to what we have to say, we can educate you and change your behavior to go fill out the census. So in 2028, we'll start that process of going back out to the people who we work with before as well as any new players in it and really start to identify and show the value that we did before.

Got you. Kerry Gold asked about share repurchases. Given that you guys have over $1 in cash -- net cash per share, how are you thinking about capital allocation going forward?

Yes. So we have our share repurchase plan in place. I'm trying to think exactly the amount of shares. I think we purchased approximately 1 million shares. We announced it at the end of at the end 2022 of what that looked like. And we have that in place. There are certain restrictions right now where we can only buy in certain periods. There are blackout periods -- right now, I think it's a blackout period. And we're looking at what our cash position is, what our -- what the share price is and taking advantage of that when it makes sense for us. We haven't necessarily -- we don't have -- we don't really disclose that plan to shareholders until after we do it, but it is something that we want to take advantage of when it presents itself properly, and that's what we've done in the past and we'll continue to do in the future.

Got you. Jose Gonzalez asked another question on demand. I think we covered that a little bit in the industry overview. But specifically, are you noticing any lower demand?

A little bit lower demand. Like I said, the lower demand is specifically on the volume of products or the volume of projects that we're doing.

Dollars.

Dollar for dollar, it hasn't gone down significantly. But those are lagging indicators -- leading indicators in the next few months. I'm not sure. It feels like the economy, I'm not an economist, but it feels like things are uncertain yet not -- they're just uncertain, people aren't sure what to take from it. So people are being a little cautious, but that's not preventing them from necessarily spending.

Right. Right. Brian, I'm sorry if I'm mispronouncing your name, Brian. He wants to know a little bit more about your customers, Brian, I could point you to some of Stran's subsidiary websites. The T R Miller website, list some of their partners and their customers. Andy, if you're able to maybe disclose anything about your customers a little more, that would be helpful?

Yes, we try not to list customers on investor calls because a lot of times, customers might not necessarily want to be listed as well as we don't want to broadcast that to our competitors. So we try to stay away from that. But if you do go to our website, we have customers listed. I mean, we really have different verticals, beverages vertical. Professional services, including financial services, insurance, accounting and legal is another big vertical. Health care, it's a very large vertical, whether that's insurance providers, hospitals or anything, that's a very large market. And then we have retail and consumer brands and then, finally, we had sports entertainment and online gaming. So that's really how we break down our verticals. As I mentioned, we have over 35 Fortune 500 customers that are doing business. But a lot of the customers almost, I think, it's 70 -- over 70% of our customers are programmatic in nature, meaning we provide more than just products. We have some sort of -- and we define a program as somewhere we have, a, contractual obligation to, they take advantage of our technology offering, our online stores or our websites or we have inventory and fulfillment for them. So when we have these large customers or any of our customers for that matter, over 70% of our revenue, they're using us for more than just products. So it's not necessarily only on price. And it's not commoditized. It's really the value that we deliver to them because we're doing more than to sell on the products. We have a -- we actually have a 6 -- we say there's 6 building blocks that we have within a program, products is one and then there's 5 others. It's products, technology, warehousing distribution, compliance, integration and ROI. Those are really the 4 -- or, the 6 building blocks. So combine them all together.

Okay. Got it. How common is it in the industry to have exclusive relationships with customers? And if it's -- if you don't have an exclusive relationship and they're using maybe one of your competitors to fulfill some needs, I mean what's the opportunity angle there?

Yes. So there is -- it is -- it's common, but not every customer wants to have an exclusive partnership. So typically, with the programs that we have, they are exclusive because we're doing so many different factors for them than just sending us in products from someone else and having us do the other 5 steps, it doesn't make financial sense for us. So typically, with the online programs that we have, those are exclusive that we say, if you're going to take advantage of our technology and distribution and our service teams and our creative teams, you can't use third party. You can't use someone else for that. But there is an opportunity then for special orders for us to go and find that business and really get more business out of them. And that's where we really tend to also shine because we use the program itself as really the base or the calling card to have exposure to them. And then we have our teams going out and marketing them and saying, we can do more than that. If you have special needs, we can help you that maybe you aren't listed on our internal platform for you. So there is an opportunity for us to writing the contracts that we get the first right of refusal as well. But we also believe in proving our value to them and saying, you don't need to go to because we'll do a better job. We're going to have better products, better pricing, where it's going to be better than everyone else.

Got you. Got you. And then Jose always ask a question on guidance. You guys have no plans on issuing guidance at this time. Correct?

No. Yes. We historically haven't and there's no plans in the future to really issue guidance on what that looks like. We talk about in some of our earnings calls, what our book business looks like and what we somewhat expect, but we just aren't expecting to do that in the near future, no.

Okay. Great. Well, if there's no more questions, I think we can wrap this up. Thank you very much, Andy, for this wonderful conversation.

Thank you, Eddie. It's always good talking, and I love talking about Stran, what we've done, what we're planning on doing, and it will be fun to watch. And thank you, everybody, for listening and having confidence in Stran and what we're going to build.

All right, everybody. Thanks.

Thanks, Eddie. Thanks, everyone.