Business
Karat Packaging Reports 2023 First Quarter Financial Results
Record Gross Margin Expansion and Strong Execution of Business Strategy CHINO, Calif., May 10, 2023 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (Nasdaq: KRT)
About this update from Karat Packaging Inc.
[{"type":"text","content":"Record Gross Margin Expansion and Strong Execution of Business Strategy\nCHINO, Calif., May 10, 2023 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (Nasdaq: KRT) (“Karat” or the “Company”), a specialty distributor and manufacturer of environmentally friendly, disposable foodservice products and related items, today announced financial results for its 2023 first quarter ended March 31, 2023. First Quarter 2023 Highlights Quarterly net sales of $95.8 million, decreased 9.1 percent from the prior-year quarter.Gross profit of $38.1 million, up 12.2 percent from the prior-year quarter.Record gross margin of 39.8 percent, an improvement of 730 basis points over the prior-year quarterNet income of $9.2 million, up 15.6 percent from the prior-year quarter.Net income margin of 9.6 percent versus 7.5 percent in the prior-year quarter.Strong quarterly operating cash flow of $14.2 million.Adjusted EBITDA of $15.3 million, up 17.6 percent from the prior-year quarterAdjusted EBITDA margin of 15.9 percent, versus 12.3 percent in the prior-year quarter. 2023 Guidance Reiterate net sales for the 2023 full year expected to increase by high single digits.Gross margin goal for the 2023 full year: 32 percent to 33 percent.Eco-friendly product sales goal for the 2023 full year: 35 percent of total sales.Net sales for the 2023 second quarter expected to be 5 percent lower, primarily due to price reductions, compared with the prior year period. “Gross margins marked a new record in the 2023 first quarter, enhanced by a substantial decline in ocean freight, lower costs on certain raw materials and continuing improvement in operating efficiencies and productivity,” said Alan Yu, chief executive officer. “This, in turn, allowed us to implement further price reductions and pass on savings to our customers. “Our growth strategy in 2023 is focused, in part, on improving inventory management and fill-rate. We recently signed a lease for an 83,000 square-foot distribution center in Houston, following the addition of a Chicago warehouse earlier this year. “We are executing our asset-light plan to scale back manufacturing production in California, while increasing import items, focusing on higher-margin eco-friendly and compostable products. Accordingly, we have significantly enlarged our sourcing network in Asia, giving us greater flexibility, without additional over...