The following is a summary of the Karat Packaging Inc. (KRT) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Karat Packaging reported Q1 2024 sales volume growth of 3.5%, with comparable net sales of $95.6 million.

• The company achieved a near record high gross margin of 39.3%.

• Net income for the quarter stood at $6.5 million, with adjusted EBITDA of $13.5 million.

• The operating income was impacted by a non-cash impairment of $2 million due to a lease.

• Karat Packaging is currently debt-free, with improving cash flow.

Business Progress:

• Karat is encouraged by growth in sales of eco-friendly products and the operational efficiencies brought about by the fully functional Arizona distribution center.

• The company's cash dividend payments have increased to $0.35 per share.

• The company anticipates net sales growth between 8% and 15% for 2024.

• Karat is exploring strategic acquisition opportunities and the establishment of a new distribution center in the Southeast region.

• Growth excluding mergers and acquisitions is projected in the range of 8% to 10%.

• Despite declining sales in the California/West Coast region due to small restaurant chain closures, promising growth potential is seen in the online sector and with national chains.

• Two mergers or acquisitions are planned for the year-end, targeting growth initiatives in Midwest and East Coast regions.

More details: Karat Packaging IR

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