NASDAQ$KRT

Karat Packaging Inc · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Reported record quarterly revenue and strengthened profitability.

Karat Packaging reported a strong second quarter with record net sales of $114.9 million, a 21.5% increase year-over-year, and a gross profit increase of 20.9% to $34.0 million. Net income was $7.2 million, compared to $9.3 million in the prior-year quarter which included a $5 million gain on forgiveness of debt.

  • Record quarterly net sales of $114.9 million, up 21.5 percent from the prior-year quarter.
  • Gross profit of $34.0 million, up 20.9 percent from the prior-year quarter.
  • Net income of $7.2 million, versus $9.3 million in the prior-year quarter which included a gain on forgiveness of debt of $5 million.
  • Adjusted EBITDA of $11.8 million, up 14.6 percent from the prior-year quarter.

Headline financials

Total Revenue

$115M

Previous: $94.5M+21.5%
EPS (adj)

$0.34

Previous: $0.50-32.0%
Adjusted EBITDA Margin

10.3%

Previous: 10.9%-5.5%
Gross Margin

29.6%

Previous: 29.7%-0.3%
Net Income Margin

6.3%

Previous: 9.9%-36.4%
Capital Expenditures

-$1.62M

Previous: -$957K-68.8%
Free Cash Flow

$4.73M

Previous: $8.63M-45.2%
Net Income

$6.34M

Previous: $9.58M-33.8%
Operating Income

$7.8M

Previous: $6.87M+13.6%
Gross Profit

$34M

Previous: $28.1M+20.9%
Cash & Equivalents

$3.5M

Previous: $7.68M-54.4%
Total Assets

$247M

Previous: $207M+19.4%
Stock-Based Comp

$565K

Previous: $240K+135.4%

Revenue & EPS history

Karat Packaging · Revenue · Quarterly

$115M

Q2 2022+21.5%vs Q2 2021
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Karat Packaging · $89.8M total across 3 segments · Q2 2022

  • Chains and distributors
    $66.4M+30.3%
  • Online
    $15.5M+13.0%
  • Retail
    $7.91M+4.8%

Forward guidance

The Company expects net sales between $117 million and $120 million for the third quarter of 2022, and between $445 million and $449 million for the full year 2022. The Company expects gross margin between 31% and 32% on average for the full year 2022.

Tailwinds

  • Net sales for the 2022 third quarter: $117 million to $120 million, up from $102.7 million for the 2021 third quarter.
  • Net sales for the 2022 full year: $445 million to $449 million, versus $364.2 million in 2021.
  • Gross margin goal for the 2022 full year: 31 percent to 32 percent on average, including expected impact from freight and duty capitalization for the remainder of 2022.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

-0.7%

Avg return

Earnings day

+1.2%

Avg return

5 days after

+0.8%

Avg return

30 days after

42%

10 / 24 earnings

Positive

+20.7%

Q4 2025

Best reaction

-18.6%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-7.5%-10.4%-6.3%
Q4 2025+20.7%+24.4%+33.5%
Q3 2025-6.1%-8.5%-8.5%
Q1 2025+10.9%+10.0%+14.2%
Q4 2024-2.1%+0.8%-14.7%
Q3 2024-0.1%+3.5%+5.3%
Q2 2024-14.6%-7.8%-13.2%
Q1 2024-9.0%-5.2%-7.7%
Q4 2023-11.8%-7.2%-5.7%
Q3 2023-18.6%-9.2%-5.5%
Q2 2023+3.8%+21.6%+0.8%
Q1 2023+3.6%+6.2%+12.5%
Q4 2022-1.6%-6.6%-6.2%
Q3 2022-2.8%-7.6%-5.8%
Q2 2022+1.2%+0.1%+1.2%
Q1 2022+11.6%+16.7%+10.0%
Q4 2021+13.3%+26.2%+24.5%
Q3 2020-10.6%-10.8%-9.7%
Q3 2021-7.5%-7.8%-7.6%
Q2 2020-3.7%-6.5%-6.1%
Q2 2021-2.6%-7.6%-6.2%
Q4 2020+6.1%+3.7%+6.2%
Q1 2020+6.1%+3.7%+6.2%
Q1 2021+3.5%+8.2%+8.2%
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q2 2018
Q1 2018
Q4 2017

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