Business
Karat Packaging Reports Fourth Quarter and Full Year 2022 Financial Results
--Record Full Year Gross Margin with Continued Margin Expansion-- CHINO, Calif., March 16, 2023 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (Nasdaq: KRT)
About this update from Karat Packaging Inc.
[{"type":"text","content":"--Record Full Year Gross Margin with Continued Margin Expansion--\nCHINO, Calif., March 16, 2023 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (Nasdaq: KRT) (“Karat”), a specialty distributor and manufacturer of disposable foodservice products and related items, today announced financial results for its fourth quarter and full year ended December 31, 2022. Fourth Quarter 2022 Highlights Net sales of $92.7 million, up 1.5 percent from the prior-year quarter.Gross profit of $29.7 million, negatively impacted by an out-of-period inventory write-off of $1.7 million, up 4.8 percent from the prior-year quarter.Gross margin of 32.0 percent, an improvement of 100 basis points over the prior-year quarter.Net income of $4.5 million (net income margin of 4.9 percent), versus $6.0 million (net income margin of 6.5 percent) in the prior-year quarter.Adjusted EBITDA of $9.9 million, negatively impacted by a deposit write-off of $0.5 million related to a pre-pandemic capital investment project, versus $10.9 million in the prior-year quarter.Adjusted EBITDA margin of 10.7 percent, versus 11.9 percent in the prior-year quarter.Strong quarterly operating cash flow of $17.0 million. 2023 Outlook Net sales for the full year 2023 expected to increase high single digit.Gross margin goal for the 2023 full year: 32 percent to 33 percent.Sales for the first half of 2023 anticipated to be lower due, in part, to price reductions and destocking for certain inventories, compared with the prior year period. “Gross margin continued to improve during the 2022 fourth quarter, with a significant reduction of ocean freight costs versus the same quarter last year. This, in turn, allowed us to proactively pass on savings to our customers,” said Alan Yu, chief executive officer. “Ocean freight costs have essentially now stabilized, which we believe will enable us to further expand margins for 2023. “Net sales grew during the fourth quarter, despite multiple price reductions. Additionally, we added a number of new contracts with chain accounts and expanded our product offerings to existing customers. We expect these new agreements to materialize and add to our top line in the second half of 2023. We continue to see solid growth for our eco-friendly product lines, with sales having increased 24 percent in the most recent fourth quarter over the prior year period, and deman...