$KRT

Karat Packaging Inc.

CIK:0001758021|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Income Statement [Abstract]
Net sales	$ 136,302	$ 123,986	$ 253,249	$ 227,610
Cost of goods sold	59,142	74,879	134,563	137,741
Gross profit	77,160	49,107	118,686	89,869
Operating expenses
Selling expenses	17,544	13,716	30,480	28,127
General and administrative expenses (including $675 and $785 associated with variable interest entity for the three months ended June 30, 2026 and 2025, respectively; $1,316 and $1,462 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	21,954	19,124	42,080	37,672
Loss (gain), net, on disposal of property and equipment	60	(283)	60	(300)
Total operating expenses	39,558	32,557	72,620	65,499
Operating income	37,602	16,550	46,066	24,370
Other income (expenses)
Rental income (including $362 and $361 associated with variable interest entity for the three months ended June 30, 2026 and 2025, respectively; $719 and $807 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	716	755	1,414	1,531
Other income (expenses), net (including $0 associated with variable interest entity for both the three months ended June 30, 2026 and 2025; $76 and $0 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	53	(82)	144	(38)
(Loss) gain on foreign currency transactions	(81)	(2,867)	171	(2,628)
Interest income (including $2 and $85 associated with variable interest entity for the three months ended June 30, 2026 and 2025, respectively; $5 and $311 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	1,161	676	1,447	1,242
Interest expense (including ($381) and ($509) associated with variable interest entity for the three months ended June 30, 2026 and 2025, respectively; ($761) and ($1,009) associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(425)	(521)	(834)	(1,030)
Total other income (expenses), net	1,424	(2,039)	2,342	(923)
Income before provision for income taxes	39,026	14,511	48,408	23,447
Provision for income taxes	9,377	3,459	11,618	5,580
Net income	29,649	11,052	36,790	17,867
Net income attributable to noncontrolling interest	318	118	718	524
Net income attributable to Karat Packaging Inc.	$ 29,331	$ 10,934	$ 36,072	$ 17,343
Basic and diluted earnings per share:
Basic (in dollars per share)	$ 1.47	$ 0.55	$ 1.81	$ 0.87
Diluted (in dollars per share)	$ 1.46	$ 0.54	$ 1.80	$ 0.86
Weighted average common shares outstanding, basic (in shares)	19,948,690	20,058,247	19,955,917	20,047,436
Weighted average common shares outstanding, diluted (in shares)	20,107,051	20,191,111	20,090,225	20,194,942

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
Cash flows from operating activities
Net income	$ 36,790	$ 17,867
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including $606 and $607 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	5,468	5,366
Adjustments to allowance for bad debt	546	(48)
Adjustments to inventory reserve	68	60
Write-off of inventories	690	296
Loss (gain), net, on disposal of property and equipment	60	(300)
Amortization of loan fees (including $31 associated with variable interest entity for both the six months ended June 30, 2026 and 2025)	102	47
Unrealized loss from investment in publicly-traded equity securities	31	2
Stock-based compensation	838	791
Amortization of operating right-of-use assets	5,499	4,898
Government grant income (including ($16) associated with variable interest entity for both the six months ended June 30, 2026 and 2025)	(35)	(35)
(Increase) decrease in operating assets
Accounts receivable (including $4 and $0 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(13,352)	(9,601)
Inventories	(8,161)	(18,413)
Prepaid expenses and other current assets (including ($7) and $32 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(1,642)	(432)
Other non-current assets (including $31 and $4 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(15)	(16)
Increase (decrease) in operating liabilities
Accounts payable (including ($97) and $100 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	8,174	15,576
Accrued expenses (including ($211) and $173 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	2,480	673
Related party payable	2,718	4,844
Income taxes payable	5,705	86
Deferred revenue	341	395
Operating lease liabilities	(5,943)	(4,646)
Other liabilities (including ($4) and $67 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(17)	66
Net cash provided by operating activities	40,345	17,476
Cash flows from investing activities
Purchases of property and equipment	(621)	(274)
Proceeds from disposal of property and equipment	0	475
Deposits paid for property and equipment	(1,653)	(989)
Purchases of publicly-traded equity securities	(242)	(451)
Proceeds from disposal of publicly-traded equity securities	0	503
Purchases of short-term investments (including $0 and $7,982 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	15,744	16,300
Redemption of short-term investments (including $0 and $7,678 associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	0	18,200
Net cash (used in) provided by investing activities	(18,260)	1,164
Cash flows from financing activities
Payment of long-term debt (including ($1,232) and ($583) associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(1,232)	(583)
Payments for lender fees	(111)	(62)
Proceeds from exercise of common stock options	30	195
Repurchase of common stock	(2,003)	0
Dividends paid to shareholders	(17,953)	(18,048)
Payment of Global Wells membership interest tax withholding (including ($382) and ($295) associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	(297)	(298)
Payment of Global Wells noncontrolling membership interest redemption gain tax withholding (including $0 and ($879) associated with variable interest entity for the six months ended June 30, 2026 and 2025, respectively)	0	(879)
Net cash used in financing activities	(21,566)	(19,675)
Net increase (decrease) in cash and cash equivalents	519	(1,035)
Cash and cash equivalents
Beginning of period	37,880	31,584
End of period	38,399	30,549
Supplemental disclosures of non-cash investing and financing activities:
Non-cash excise tax on share repurchases	11	0
Transfers from deposits to property and equipment	1,653	1,025
Non-cash purchases of property and equipment	0	37
Non-cash disposal of property and equipment	0	200
Supplemental disclosures of cash flow information:
Cash paid for income taxes	4,940	5,491
Cash paid for interest	$ 732	$ 948

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Current assets
Cash and cash equivalents (including $1,350 and $1,488 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	$ 38,399	$ 37,880
Short-term investments	15,744	0
Accounts receivable, net of allowance for bad debt of $1,009 and $581 at June 30, 2026 and December 31, 2025, respectively (including $0 and $4 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	49,208	36,402
Inventories	89,085	81,682
Prepaid expenses and other current assets (including $322 and $314 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	6,906	5,224
Total current assets	199,342	161,188
Property and equipment, net (including $41,152 and $41,758 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	77,418	81,159
Goodwill	3,510	3,510
Intangible assets, net	260	273
Operating right-of-use assets	34,800	40,299
Deferred tax assets	255	255
Other non-current assets (including $98 and $68 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	1,228	1,002
Total assets	316,813	287,686
Current liabilities
Accrued expenses (including $324 and $535 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	15,940	13,460
Income taxes payable	5,705	0
Deferred revenue	1,054	713
Long-term debt, current portion (including $12,084 and $12,941 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	12,084	12,941
Operating lease liabilities, current portion	12,270	11,982
Other current liabilities (including $43 and $49 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	111	129
Total current liabilities	88,551	70,220
Deferred tax liabilities	2,936	2,936
Long-term debt, net of current portion and debt discount of $46 and $78 at June 30, 2026 and December 31, 2025, respectively (including $22,518 and $22,862 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively, and debt discount of $46 and $78 associated with variable interest entity at June 30, 2026 and December 31, 2025, respectively)	22,518	22,862
Operating lease liabilities, net of current portion	25,843	32,074
Other non-current liabilities (including $1,208 and $1,224 associated with variable interest entity at June 30, 2026 and December 31, 2025 respectively)	2,690	2,724
Total liabilities	142,538	130,816
Commitments and Contingencies (Note 14)
Karat Packaging Inc. stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding, as of both June 30, 2026 and December 31, 2025	0	0
Common stock, $0.001 par value, 100,000,000 shares authorized, 20,156,605 and 19,922,721 shares issued and outstanding, respectively, as of June 30, 2026 and 20,122,505 and 19,962,131 shares issued and outstanding, respectively, as of December 31, 2025	20	20
Additional paid in capital	91,807	90,939
Treasury stock, $0.001 par value, 233,884 and 160,374 shares as of June 30, 2026 and December 31, 2025, respectively	(5,249)	(3,246)
Retained earnings	79,893	61,704
Total Karat Packaging Inc. stockholders’ equity	166,471	149,417
Noncontrolling interest	7,804	7,453
Total stockholders’ equity	174,275	156,870
Total liabilities and stockholders’ equity	316,813	287,686
Nonrelated Party
Current liabilities
Accounts payable (including $0 and $97 associated with variable interest entity as of June 30, 2026 and December 31, 2025, respectively)	33,997	26,323
Related Party
Current liabilities
Accounts payable (including $0 and $97 associated with variable interest entity as of June 30, 2026 and December 31, 2025, respectively)	$ 7,390	$ 4,672