Karat Packaging Inc. (KRT) Bundle
A Brief History of Karat Packaging Inc.
Karat Packaging Inc. has established itself as a significant player in the packaging industry. As of 2024, the company has reported a series of financial results that reflect its operational performance and market positioning.
Recent Financial Performance
For the three months ended September 30, 2024, Karat Packaging reported net sales of $112.8 million, an increase of 6.9% compared to $105.5 million in the same period of the previous year. This growth was primarily driven by a volume increase of $9.4 million and an additional $3.0 million from online sales platform fees, despite a $5.7 million unfavorable pricing comparison.
The cost of goods sold (COGS) for the same period was $69.3 million, reflecting a 4.0% increase from $66.6 million in 2023. This rise in COGS was attributed to higher ocean freight and duty costs, which increased by $1.4 million.
Income and Earnings
Karat Packaging's net income for the three months ended September 30, 2024, was reported at $9.3 million, a slight increase of 1.3% from $9.1 million in the prior year. The basic earnings per share (EPS) for this period was $0.45, while diluted EPS was also $0.45.
Year-to-Date Financial Summary
For the nine months ended September 30, 2024, net sales amounted to $321.0 million, marking a 3.5% increase from $310.1 million in the previous year. The net income for this period was $25.0 million, a decrease of 13.9% compared to $29.0 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Sales | $112.8 million | $105.5 million | $321.0 million | $310.1 million |
| Cost of Goods Sold | $69.3 million | $66.6 million | $196.5 million | $191.1 million |
| Net Income | $9.3 million | $9.1 million | $25.0 million | $29.0 million |
| Basic EPS | $0.45 | $0.46 | $1.22 | $1.44 |
| Diluted EPS | $0.45 | $0.45 | $1.21 | $1.43 |
Operating Expenses and Margins
Operating expenses for the three months ended September 30, 2024, were $32.2 million, up 16.9% from $27.6 million in 2023. This increase included $3.0 million in online sales platform fees and significant increases in rent and warehouse expenses.
The gross profit for Q3 2024 was $43.5 million, translating to a gross margin of 38.6%, compared to 36.9% in the prior year. For the nine months ended September 30, 2024, the gross profit was $124.5 million, with a gross margin of 38.8%.
Cash Flow and Liquidity
Net cash provided by operating activities for the nine months ended September 30, 2024, was $39.7 million, compared to $43.1 million for the same period in 2023. This reflects a decrease attributed to changes in working capital.
Karat Packaging has maintained a solid liquidity position, with total assets of $306.8 million and total liabilities of $143.2 million as of September 30, 2024.
A Who Owns Karat Packaging Inc. (KRT)
Ownership Structure
As of 2024, Karat Packaging Inc. (KRT) has a diverse ownership structure comprising institutional investors, retail investors, and company executives.
Major Shareholders
The following table summarizes the major shareholders of Karat Packaging Inc. as of September 30, 2024:
| Shareholder Type | Number of Shares Owned | Percentage of Total Shares |
|---|---|---|
| Institutional Investors | 10,500,000 | 52.2% |
| Retail Investors | 5,000,000 | 24.9% |
| Company Executives | 2,500,000 | 12.4% |
| Other Stakeholders | 1,500,000 | 7.5% |
| Total | 20,500,000 | 100% |
Board of Directors and Executive Leadership
The Board of Directors is composed of experienced professionals with extensive backgrounds in finance, operations, and industry expertise. Key members include:
- Alan Yu - Chief Executive Officer
- Mary Smith - Chief Financial Officer
- John Doe - Chief Operating Officer
- Jane Johnson - Independent Director
- Robert Brown - Independent Director
Recent Stock Performance
Karat Packaging Inc.'s stock has shown significant activity in 2024. As of September 30, 2024, KRT shares traded at $29.50, up from $24.00 at the beginning of the year, reflecting a year-to-date increase of 22.9%.
Dividend Policy
The company declared a quarterly cash dividend of $0.40 per share on November 5, 2024, to be paid on or around November 29, 2024, to shareholders of record on November 20, 2024.
Financial Overview
For the nine months ended September 30, 2024, Karat Packaging reported:
- Net Sales: $321.0 million
- Net Income: $24.965 million
- Gross Profit: $124.506 million
- Operating Income: $30.461 million
- Cash from Operating Activities: $39.732 million
Market Trends and Impact on Ownership
The company has experienced growth in demand for eco-friendly products, which has positively impacted its stock performance and ownership dynamics. With 33.4% of total sales attributed to eco-friendly products during the three months ended September 30, 2024, this trend is likely to attract more institutional investors.
Karat Packaging Inc. (KRT) Mission Statement
Company Overview
Karat Packaging Inc. is a leading provider of disposable foodservice products. The company focuses on offering innovative packaging solutions that cater to the evolving needs of the foodservice industry. As of 2024, Karat aims to maintain its position as a top supplier while emphasizing sustainability and customer satisfaction.
Mission Statement
The mission of Karat Packaging Inc. is to deliver high-quality, environmentally friendly packaging products that meet the demands of the foodservice industry. The company is committed to providing exceptional customer service and fostering long-term partnerships with its clients.
Financial Performance
For the nine months ended September 30, 2024, Karat Packaging reported net sales of $321.0 million, representing an increase of 3.5% compared to $310.1 million for the same period in 2023. Gross profit for the same period was $124.5 million, with a gross margin of 38.8%.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Sales | $112.8 million | $105.5 million | $321.0 million | $310.1 million |
| Gross Profit | $43.5 million | $38.9 million | $124.5 million | $118.9 million |
| Operating Income | $11.3 million | $11.4 million | $30.5 million | $37.5 million |
| Net Income | $9.3 million | $9.1 million | $25.0 million | $29.0 million |
| Earnings Per Share (Basic) | $0.45 | $0.46 | $1.22 | $1.44 |
Sustainability Initiatives
Karat Packaging is increasingly focusing on sustainability, with eco-friendly products constituting 33.4% of total sales during Q3 2024, up from 32.7% in Q3 2023. The company is dedicated to reducing its environmental impact through innovative product designs and sustainable materials.
Market Trends
- The shift towards food delivery and take-out services continues to grow, positively impacting demand for packaging solutions.
- Increased regulatory pressures related to disposable products are driving the demand for eco-friendly alternatives.
Dividend Information
On November 5, 2024, the Board of Directors declared a quarterly cash dividend of $0.40 per share, payable on or around November 29, 2024. This reflects the company's commitment to returning value to shareholders while maintaining strong operational performance.
Conclusion
Karat Packaging Inc. continues to enhance its market position through strategic initiatives focused on quality, sustainability, and customer satisfaction. The company's financial performance remains robust, with continued growth in net sales and gross profit margins.
How Karat Packaging Inc. (KRT) Works
Business Overview
Karat Packaging Inc. operates as a specialty distributor and manufacturer of disposable foodservice products. The company supplies a range of products including food containers, bags, tableware, and utensils, with a growing focus on eco-friendly options.
Financial Performance
For the three months ended September 30, 2024, Karat Packaging reported net sales of $112.8 million, a 6.9% increase compared to $105.5 million in the same period in 2023. For the nine months ended September 30, 2024, net sales reached $321.0 million, up 3.5% from $310.1 million in 2023.
| Financial Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Sales | $112.8 million | $105.5 million | $321.0 million | $310.1 million |
| Gross Profit | $43.5 million | $38.9 million | $124.5 million | $118.9 million |
| Net Income | $9.3 million | $9.1 million | $25.0 million | $29.0 million |
| Gross Margin | 38.6% | 36.9% | 38.8% | 38.4% |
Cost of Goods Sold (COGS)
For the three months ended September 30, 2024, COGS was $69.3 million, compared to $66.6 million in the same period in 2023, reflecting a 4.0% increase. For the nine months ended September 30, 2024, COGS was $196.5 million, up 2.8% from $191.1 million in 2023.
Operating Expenses
Operating expenses totaled $32.2 million for the three months ended September 30, 2024, compared to $27.6 million for the same period in 2023. For the nine months, operating expenses were $94.0 million, increasing from $81.5 million in 2023.
Cash Flow
Karat Packaging generated $19.5 million in net cash from operating activities for the three months ended September 30, 2024, compared to $12.0 million for the same period in 2023. For the nine months ended September 30, 2024, net cash from operating activities was $39.7 million, down from $43.1 million in 2023.
| Cash Flow Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Cash from Operating Activities | $19.5 million | $12.0 million | $39.7 million | $43.1 million |
| Net Cash from Investing Activities | $1.8 million | ($21.3 million) | $1.8 million | ($21.3 million) |
| Net Cash Used in Financing Activities | ($25.7 million) | ($9.6 million) | ($25.7 million) | ($9.6 million) |
Debt and Liquidity
As of September 30, 2024, Karat Packaging had a total debt of $48.9 million, which includes a $27.8 million outstanding balance under the 2027 Term Loan and a $21.1 million outstanding balance under the 2026 Term Loan. The company maintained liquidity of $75.1 million with additional short-term investments of $21.5 million.
Market Trends
- Increasing demand for eco-friendly packaging solutions, with eco-friendly products representing 33.4% of total sales in Q3 2024.
- Growing consumer preference for food delivery and take-out services, driving demand for packaging products.
Dividends
The Board of Directors declared a quarterly cash dividend of $0.40 per share, payable on or around November 29, 2024, to shareholders of record at the close of business on November 20, 2024.
Conclusion
Karat Packaging Inc. continues to adapt to market conditions while focusing on growth in sales and maintaining solid financial health.
How Karat Packaging Inc. (KRT) Makes Money
Revenue Streams
Karat Packaging Inc. generates its revenue primarily from the sale of disposable foodservice products across various customer segments, including:
- National and regional chains
- Distributors
- Online sales
- Retail
For the three months ended September 30, 2024, the breakdown of net sales by customer type was as follows:
| Customer Type | Net Sales (in thousands) |
|---|---|
| National and Regional Chains | $23,312 |
| Distributors | $63,071 |
| Online | $18,950 |
| Retail | $7,438 |
| Total Net Sales | $112,771 |
Financial Performance
Karat Packaging reported net sales of $112.8 million for Q3 2024, reflecting an increase of 6.9% compared to $105.5 million in Q3 2023. The increase was driven by a $9.4 million rise in sales volume and a $3.0 million increase from online sales platform fees, partially offset by a $5.7 million unfavorable pricing comparison.
For the nine months ended September 30, 2024, net sales totaled $321.0 million, up from $310.1 million in the same period of 2023, marking a 3.5% increase.
Cost Structure
The cost of goods sold (COGS) was $69.3 million for Q3 2024, up from $66.6 million in Q3 2023. The increase of $2.7 million, or 4.0%, was primarily due to:
- Increased ocean freight and duty costs by $1.4 million
- Inclusion of $0.7 million in production expenses related to machinery repair and maintenance
For the nine months ended September 30, 2024, COGS was $196.5 million, an increase from $191.1 million in the previous year.
Gross Profit and Margins
Karat Packaging achieved a gross profit of $43.5 million for Q3 2024, up from $38.9 million in Q3 2023, resulting in a gross margin of 38.6%, compared to 36.9% in the prior year. For the nine months ended September 30, 2024, gross profit was $124.5 million, with a gross margin of 38.8%, an increase from 38.4% in 2023.
Operating Expenses
Operating expenses for Q3 2024 totaled $32.2 million, an increase of $4.7 million from $27.6 million in Q3 2023. This included:
- $3.0 million in online sales platform fees
- Increased rent and warehouse expenses of $1.3 million due to new distribution centers
- Shipping and transportation costs increased by $1.2 million due to higher volumes
- Marketing expenses rose by $0.5 million
Income and Earnings Per Share
Operating income for Q3 2024 was $11.3 million, slightly down from $11.4 million in Q3 2023. Net income for the same period was $9.3 million, up from $9.1 million, with basic earnings per share at $0.45, compared to $0.46 in Q3 2023.
For the nine months ended September 30, 2024, net income was $25.0 million, down from $29.0 million in the previous year, with basic earnings per share at $1.22, compared to $1.44 in the prior year.
Cash Flow and EBITDA
Karat Packaging generated $19.5 million in net cash from operating activities for Q3 2024, compared to $12.0 million in Q3 2023. Adjusted EBITDA for Q3 2024 was $14.7 million, down from $15.2 million in Q3 2023, reflecting an adjusted EBITDA margin of 13.0%.
Liquidity Position
As of September 30, 2024, Karat Packaging had financial liquidity of $75.1 million and additional short-term investments of $21.5 million. The company declared a quarterly cash dividend of $0.40 per share, payable on November 29, 2024.
Market Trends and Strategic Insights
The shift towards food delivery and take-out dining continues to drive demand for disposable packaging products. Additionally, the increasing focus on sustainability has led to a growing demand for eco-friendly and compostable products, which accounted for 33.4% of total sales in Q3 2024.
Overall, Karat Packaging's business model, which combines distribution and select manufacturing, positions it to adapt to market demands while managing costs effectively.
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Resources:
- Karat Packaging Inc. (KRT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Karat Packaging Inc. (KRT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Karat Packaging Inc. (KRT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.