The following is a summary of the Karat Packaging Inc. (KRT) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Karat Packaging Inc. reported Q4 2023 net sales of $95.6 million, an increase from $92.7 million in the prior year quarter.

• Gross margin improved to 35.7%, which is near a record high due to scaling back US manufacturing and a strong US dollar.

• Q4 2023 resulted in a net income of $4.2 million compared to $4.5 million in the prior year quarter, with a decreasing net income margin of 4.4%.

• Adjusted EBITDA for Q4 2023 was $8.6 million, compared to $9.9 million in the previous year's same quarter.

• The Board of Directors authorized an increase in the quarterly cash dividend payment to $0.30 per share, up from $0.20.

Business Progress:

• Sales of eco-friendly products grew by 11% in Q4 2023, accounting for 33% of total sales.

• Karat opened new distribution centers in Chicago and Houston in 2023, and is planning further expansion in 2024 with a new center in the Southeast US, as well as enlarging its sales force.

• Karat is implementing automation and AI technology at all facilities to boost operational efficiencies.

• Despite minor setbacks, the company has a positive outlook for 2024, expecting net sales to grow 8% to 15% with a predicted margin of 35% to 38%.

• Karat Packaging finished 2023 with $110.3 million on hand, up from $84.5 million at the end of 2022, demonstrating a strong position for future growth strategies.

More details: Karat Packaging IR

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