A Business at a Glance
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As used in this Annual Report on Form 10-K, “we”, “us”, “our”, “Karat”, “the Company” or “our Company” refer to Karat Packaging Inc., a Delaware corporation, and, unless the context requires otherwise, our operating subsidiaries. References to “Global Wells” or “our variable interest entity” refer to Global Wells Investment Group LLC, a Texas limited liability company and our consolidated variable interest entity, in which the Company has an equity interest and which is controlled by one of our stockholders. References to “Lollicup” refer to Lollicup USA Inc., a California corporation, our wholly-owned subsidiary. Our Company We are a rapidly-growing and nimble distributor and manufacturer of disposable foodservice products and related items, including food and take-out containers, bags, boxes, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, gloves, janitorial supplies, and other products.
| Metric | TTM | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 |
|---|---|---|---|---|---|---|
| Revenue | 454M | 423M | 406M | 423M | 364M | 296M |
| Net Income | 30M | 30M | 32M | 24M | 21M | 18M |
| EPS | $1.50 | $1.49 | $1.63 | $1.19 | $1.12 | $1.13 |
| Free Cash Flow | 26M | 47M | 51M | 27M | 4.5M | -15M |
| ROIC | 19.6% | 27.7% | 30.2% | 18.4% | 15.7% | 39.0% |
| Gross Margin | 38.0% | 38.9% | 37.7% | 31.2% | 29.6% | 30.2% |
| Debt/Equity | 0.27 | 0.02 | 0.01 | 0.01 | 0.02 | 0.70 |
| Dividends/Share | $1.75 | $1.54 | $1.05 | $0.35 | - | $0.04 |
| Operating Income | 40M | 38M | 42M | 30M | 23M | 28M |
| Operating Margin | 8.9% | 8.9% | 10.4% | 7.1% | 6.4% | 9.4% |
| ROE | 19.6% | 19.4% | 21.1% | 16.7% | 16.9% | 54.1% |
| Shares Outstanding | 20M | 20M | 20M | 20M | 19M | 16M |
| Metric | 2020 | 2021 | 2022 | |||
|---|---|---|---|---|---|---|
| Income Statement | ||||||
| Revenue | 296M | 364M | 423M | 406M | 423M | 454M |
| Gross Margin | 30.2% | 29.6% | 31.2% | 37.7% | 38.9% | 38.0% |
| R&D | N/A | N/A | N/A | N/A | N/A | N/A |
| SG&A | N/A | N/A | N/A | N/A | N/A | N/A |
| EBIT | 28M | 23M | 30M | 42M | 38M | 40M |
| Op. Margin | 9.4% | 6.4% | 7.1% | 10.4% | 8.9% | 8.9% |
| Net Income | 18M | 21M | 24M | 32M | 30M | 30M |
| Net Margin | 5.9% | 5.7% | 5.6% | 8.0% | 7.1% | 6.7% |
| Non-Recurring | 0 | 0 | 0 | 0 | 0 | 0 |
| Returns on Capital | ||||||
| ROIC | 39.0% | 15.7% | 18.4% | 30.2% | 27.7% | 19.6% |
| ROE | 54.1% | 16.9% | 16.7% | 21.1% | 19.4% | 19.6% |
| ROA | 9.7% | 10.0% | 9.4% | 11.7% | 10.5% | 10.0% |
| Cash Flow | ||||||
| Op. Cash Flow | 15M | 8.7M | 29M | 53M | 48M | 27M |
| Free Cash Flow | -15M | 4.5M | 27M | 51M | 47M | 26M |
| Owner Earnings | 6.0M | -3.4M | 17M | 42M | 35M | 14M |
| CapEx | 30M | 4.2M | 2.7M | 2.8M | 934K | 736K |
| Maint. CapEx | 8.6M | 10M | 10M | 11M | 11M | 11M |
| Growth CapEx | 21M | 0 | 0 | 0 | 0 | 0 |
| D&A | 8.6M | 10M | 10M | 11M | 11M | 11M |
| CapEx/OCF | N/A | 48.1% | 9.0% | 5.3% | 1.9% | 2.8% |
| Capital Allocation | ||||||
| Dividends Paid | 606K | 0 | 7.0M | 21M | 31M | 35M |
| Dividend Yield | N/A | N/A | 2.5% | 6.6% | 6.2% | 5.9% |
| Share Buybacks | 248K | 0 | 0 | 0 | 0 | 0 |
| Buyback Yield | N/A | N/A | N/A | N/A | N/A | 0.0% |
| Stock-Based Comp | 0 | 2.0M | 2.0M | 770K | 2.1M | 2.1M |
| Debt Repayment | 7.4M | 39M | 22M | 1.0M | 1.1M | 1.1M |
| Balance Sheet | ||||||
| Net Debt | 22M | -4.1M | -14M | -47M | -58M | -1.8M |
| Cash & Equiv. | N/A | N/A | N/A | N/A | N/A | 44M |
| Long-Term Debt | 11M | 1.2M | 957K | 1.1M | 1.2M | 1.2M |
| Debt/Equity | 0.70 | 0.02 | 0.01 | 0.01 | 0.02 | 0.27 |
| Interest Coverage | 5.0 | 8.0 | 14.9 | 20.6 | 17.8 | 17.8 |
| Equity | 32M | 123M | 142M | 154M | 156M | 154M |
| Total Assets | 181M | 208M | 252M | 276M | 295M | 303M |
| Total Liabilities | 141M | 76M | 100M | 114M | 132M | 141M |
| Intangibles | 3.1M | 3.9M | 3.9M | 3.8M | 3.8M | 3.8M |
| Retained Earnings | 19M | 39M | 56M | 68M | 66M | 66M |
| Working Capital | 37M | 72M | 85M | 111M | 115M | 115M |
| Current Assets | 80M | 103M | 124M | 155M | 161M | 161M |
| Current Liabilities | 43M | 31M | 39M | 44M | 46M | 46M |
| Per Share Data | ||||||
| EPS | 1.13 | 1.12 | 1.19 | 1.63 | 1.49 | 1.50 |
| Owner EPS | 0.39 | -0.18 | 0.86 | 2.10 | 1.75 | 0.69 |
| Book Value | 2.09 | 6.62 | 7.13 | 7.74 | 7.73 | 7.69 |
| Cash Flow/Share | 0.94 | 0.47 | 1.48 | 2.68 | 2.39 | 2.04 |
| Dividends/Share | 0.04 | N/A | 0.35 | 1.05 | 1.54 | 1.75 |
| Shares Out. | 15.5M | 18.6M | 19.9M | 19.9M | 20.1M | 20.1M |
| Valuation | ||||||
| P/E Ratio | N/A | 15.1 | 9.8 | 13.6 | 18.8 | 19.7 |
| P/FCF | N/A | 69.4 | 8.6 | 8.7 | 12.0 | 22.8 |
| EV/EBIT | N/A | 13.3 | 7.3 | 9.4 | 13.4 | 14.7 |
| Price/Book | N/A | 2.5 | 1.6 | 2.9 | 3.6 | 3.8 |
| Price/Sales | N/A | 0.9 | 0.7 | 0.8 | 1.2 | 1.3 |
| FCF Yield | N/A | 1.4% | 11.6% | 11.4% | 8.3% | 4.4% |
| Market Cap | N/A | 313M | 232M | 442M | 564M | 593M |
| Avg. Price | N/A | 17.15 | 14.11 | 15.79 | 24.93 | 29.50 |
| Year-End Price | N/A | 16.86 | 11.67 | 22.19 | 28.04 | 29.50 |
Karat Packaging Inc. passes 6 of 9 quality checks, suggesting mixed fundamentals.
Karat Packaging Inc. trades at 19.7x trailing earnings, compared to its 15-year median P/E of 14.3x, suggesting it is currently Expensive relative to its historical range. On a free-cash-flow basis, the stock trades at 22.8x vs a median of 10.4x. The company's 5-year average ROIC is 26.2% with a gross margin of 33.5%. Total shareholder yield (dividends) is 5.9%. At current prices, the estimated annualized return to fair value is +93.3%.
Karat Packaging Inc. (KRT) has a current P/E ratio of 19.7, compared to its historical median P/E of 14.3. The stock is currently considered Expensive based on its historical valuation range.
Karat Packaging Inc. (KRT) has a 5-year average return on invested capital (ROIC) of 26.2%. This indicates strong capital allocation and a potential competitive advantage.
Karat Packaging Inc. (KRT) has a market capitalization of $593M. It is classified as a small-cap stock.
Yes, Karat Packaging Inc. (KRT) pays a dividend with a trailing twelve-month yield of 5.92%.
Based on historical P/E analysis, Karat Packaging Inc. (KRT) appears expensive. The current P/E of 19.7 is 37% above its historical median of 14.3. The estimated fair value CAGR (P/E method) is 6.8%.
Karat Packaging Inc. (KRT) operates in the Plastics Products, Nec industry, within the Materials sector.
Karat Packaging Inc. (KRT) reported annual revenue of $423 million in its most recent fiscal year, based on SEC EDGAR filings.
Karat Packaging Inc. (KRT) has a net profit margin of 7.1%. This is a modest margin.
Karat Packaging Inc. (KRT) generated $47 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
Karat Packaging Inc. (KRT) has a debt-to-equity ratio of 0.02. This indicates a conservatively financed balance sheet.
Karat Packaging Inc. (KRT) reported earnings per share (EPS) of $1.49 in its most recent fiscal year.
Karat Packaging Inc. (KRT) has a return on equity (ROE) of 19.4%. This indicates the company generates strong returns for shareholders.
Karat Packaging Inc. (KRT) has a 5-year average gross margin of 33.5%. This indicates decent pricing power.
The Ledger Terminal provides 5 years of financial data for Karat Packaging Inc. (KRT), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
Karat Packaging Inc. (KRT) has a book value per share of $7.73, based on its most recent annual SEC filing.