# Karat Packaging Inc. (KRT)

Informational only - not investment advice.

CIK: 0001758021
SIC: 3089 Plastics Products, NEC
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 30](/major-group/30/) > [SIC 3089 Plastics Products, NEC](/industry/3089/)
Latest 10-K filed: 2026-03-13
SEC page: https://www.sec.gov/edgar/browse/?CIK=1758021
Filing source: https://www.sec.gov/Archives/edgar/data/1758021/000175802126000010/krt-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-03-13 · accession 0001758021-26-000010 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001758021.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 467,743,000 USD | 2025 | verified |
| Net income | 31,478,000 USD | 2025 | verified |
| Assets | 287,686,000 USD | 2025 | verified |
| Free cash flow | 33,059,000 USD | 2025 | computed |
| Net margin | 6.73% | 2025 | computed |
| Operating margin | 8.85% | 2025 | computed |
| Revenue YoY | +10.67% | 2025 | computed |
| ROE | 21.07% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | KRT | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 6.7% | 5.5% | 57 | 8 |
| Operating margin | 8.9% | 8.9% | 43 | 8 |
| Revenue growth | 10.7% | 2.1% | 86 | 8 |
| FCF margin | 7.1% | 7.5% | 43 | 8 |
| ROE | 21.1% | 9.5% | 86 | 8 |
| ROA | 10.9% | 4.5% | 86 | 8 |
| Liabilities / equity | 0.88 | 1.07 | 14 | 8 |
| Current ratio | 2.30 | 1.98 | 57 | 8 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 3089 Plastics Products, NEC, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 467743000 | USD | 2025 | 2026-03-13 |
| Net income | 31478000 | USD | 2025 | 2026-03-13 |
| Assets | 287686000 | USD | 2025 | 2026-03-13 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001758021.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 295,518,000 | 364,244,000 | 422,957,000 | 405,651,000 | 422,633,000 | 467,743,000 |
| Net income | 17,517,000 | 20,778,000 | 23,648,000 | 32,470,000 | 29,975,000 | 31,478,000 |
| Operating income | 27,697,000 | 23,145,000 | 30,015,000 | 42,076,000 | 37,761,000 | 41,414,000 |
| Gross profit | 89,125,000 | 107,827,000 | 132,086,000 | 153,043,000 | 164,329,000 | 172,136,000 |
| Diluted EPS | 1.13 | 1.12 | 1.19 | 1.63 | 1.49 | 1.56 |
| Operating cash flow | 14,547,000 | 8,679,000 | 29,474,000 | 53,379,000 | 47,982,000 | 33,815,000 |
| Capital expenditures | 29,536,000 | 4,175,000 | 2,657,000 | 2,835,000 | 934,000 | 756,000 |
| Dividends paid | 606,000 | 0.00 | 6,964,000 | 20,909,000 | 31,016,000 | 36,100,000 |
| Share buybacks | 248,000 | 0.00 |  |  | 0.00 | 2,998,000 |
| Assets | 181,104,000 | 207,599,000 | 252,175,000 | 276,397,000 | 294,522,000 | 287,686,000 |
| Liabilities | 141,236,000 | 75,574,000 | 100,242,000 | 113,707,000 | 132,323,000 | 130,816,000 |
| Stockholders' equity | 32,404,000 | 122,900,000 | 141,682,000 | 154,118,000 | 155,569,000 | 149,417,000 |
| Cash and cash equivalents | 448,000 | 6,483,000 | 16,041,000 | 23,076,000 | 31,584,000 | 37,880,000 |
| Free cash flow | -14,989,000 | 4,504,000 | 26,817,000 | 50,544,000 | 47,048,000 | 33,059,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 5.93% | 5.70% | 5.59% | 8.00% | 7.09% | 6.73% |
| Operating margin | 9.37% | 6.35% | 7.10% | 10.37% | 8.93% | 8.85% |
| Return on equity | 54.06% | 16.91% | 16.69% | 21.07% | 19.27% | 21.07% |
| Return on assets | 9.67% | 10.01% | 9.38% | 11.75% | 10.18% | 10.94% |
| Liabilities / equity | 4.36 | 0.61 | 0.71 | 0.74 | 0.85 | 0.88 |
| Current ratio | 1.85 | 3.34 | 3.15 | 3.49 | 3.47 | 2.30 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001758021.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 0.31 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.45 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.53 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 105,528,000 | 9,065,000 | 0.45 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 95,582,000 | 3,898,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 95,613,000 | 6,166,000 | 0.31 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 112,600,000 | 9,100,000 | 0.45 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 112,771,000 | 9,094,000 | 0.45 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 101,649,000 | 5,615,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 103,624,000 | 6,409,000 | 0.32 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 123,986,000 | 10,934,000 | 0.54 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 124,516,000 | 7,325,000 | 0.36 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 115,617,000 | 6,810,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 116,947,000 | 6,741,000 | 0.34 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 136,302,000 | 29,331,000 | 1.46 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from KRT's latest 10-K: [/company/KRT/business/](/company/KRT/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from KRT's latest 10-K: [/company/KRT/risk-factors/](/company/KRT/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1758021/000175802126000026/krt-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-08-07
Report date: 2026-06-30

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and accompanying notes. This discussion and analysis contain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements relate to expectations concerning matters that are not historical facts. For example, statements discussing, among other things, business strategies, growth strategies and initiatives, future revenues and future performance and expected costs and liabilities are forward-looking statements. Such forward-looking statements may be identified by words such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “remain,” “should,” or “will” or the negative of these terms or other comparable terminology. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expect and, therefore, you should not unduly rely on such statements. The risks and uncertainties that could cause those actual results to differ materially from those expressed or implied by these forward-looking statements include but are not limited to:

•fluctuations in the demand for our products in light of changes in laws and regulations applicable to food and beverages and changes in consumer preferences;

•supply chain disruptions that could interrupt product manufacturing and increase product costs;

•our ability to source raw materials and navigate a shortage of available materials;

•our ability to compete successfully in our industry;

•the impact of earthquakes, fire, power outages, floods, pandemics and other catastrophic events, as well as the impact of any interruption by problems such as terrorism, cyberattacks, or failure of key information technology systems;

•our ability to accurately forecast demand for our products or our results of operations;

•the impact of problems relating to delays or disruptions in the shipment of our goods through operational ports;

•our ability to expand into additional foodservice and geographic markets;

•our ability to successfully design and develop new products;

•fluctuations in freight carrier costs related to the shipment of our products could have a material adverse impact on our results of operations;

•the effects of public health crises including pandemics;

•our ability to attract and retain skilled personnel and senior management; and

•other risks and uncertainties described in “Risk Factors" as set forth in Item I, Part 1A, “Risk Factors” of the Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission (the "SEC") on March 13, 2026 (the "2025 Form 10-K").

As used in this Quarterly Report on Form 10-Q, “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 Texas corporation, our wholly-owned subsidiary.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

Overview

22

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. Our products are available in plastic, paper, biopolymer-based and other compostable forms. We are a leader in product innovation, offering a growing line of environmentally-friendly products to our customers, who are increasingly focused on sustainability. We also offer customized solutions to our customers, including new product design and development, custom printing, distribution of specialty food and beverage products, and logistics services.

We operate our business strategically and with broad flexibility to provide both our large and small customers with the wide spectrum of products they need to successfully run and grow their businesses. We believe we have established ourselves as a differentiated provider of high-quality products relative to our competitors. Our operating model entails generating the majority of our revenue from the distribution of our vendors' products complemented by select manufacturing capabilities in the U.S., which allows us to provide customers with broad product choices and customized offerings with short lead times. This model provides us with the flexibility to adjust the mix of our product offering from import and manufacturing in an evolving economic environment to drive operating efficiency and sustain margin expansion. We have strengthened our supply chain resilience and efficiency by prioritizing strong partnerships with reliable and cost-efficient sources and diversifying sourcing to countries with more favorable trade conditions and minimal tariffs in a dynamic global trade landscape. This has enabled us to expand our supplier base, minimize reliance on individual suppliers, enhance the resilience of our supply chain, expand our margin and improve our operating cash flows.

We operate an approximately 500,000 square foot distribution center located in Rockwall, Texas, an approximately 300,000 square foot distribution center in Chino, California, and an approximately 76,000 square foot distribution center located in Kapolei, Hawaii. We have selected manufacturing capabilities in all of these facilities. In addition, we operate eight other distribution centers located in Chino, California; Puyallup, Washington; Summerville, South Carolina; Branchburg, New Jersey; Kapolei, Hawaii; Aurora, Illinois; Mesa, Arizona; and Sugar Land, Texas. Our distribution centers are strategically located in proximity to major population centers, including the Los Angeles, New York, Chicago, Dallas, Houston, Seattle, Phoenix, Atlanta, and Honolulu metro areas. On October 17, 2025, we announced that Lollicup, our wholly-owned business operating subsidiary, relocated its headquarters to Rockwall, Texas, from Chino, California.

We manage and evaluate our operations in one reportable segment.

Trade and Tariffs Update

Beginning in 2025, the U.S. implemented a baseline tariff framework on most imports with higher country and product-specific rates for certain trading partners, including Taiwan and China, among others. In February 2026, the U.S. Supreme Court ruled that these tariffs levied under the International Emergency Economic Powers Act ("IEEPA") were unconstitutional. With the removal of IEEPA tariff following Supreme Court's ruling, a new temporary 10% tariff for all imports under Section 122 of the Trade Act of 1974 was imposed effective February 24, 2026, and remained in effect for 150 days, the maximum period that Section 122 permits without congressional action. Subsequent to the expiration of the Section 122 tariff on July 24, 2026, new Section 301 tariffs ranging from 10% to 12.5% were imposed on approximately 60 trading partners effective July 24, 2026.

As a result of the Supreme Court’s ruling, and in response to the order from the U.S. Court of International Trade, the U.S. Customs and Border Protection ("CBP") formalized a process for refunds of previously paid IEEPA tariffs to importers of record. We have completed the process of reviewing our import data, and determined that we have paid a total of $26.0 million of IEEPA tariffs during the year ended December 31, 2025 and the first two months of 2026. In April 2026, we submitted refund claims totaling $25.8 million and expect to submit the remaining eligible claims once CBP opens the filing window.

We recorded $26.7 million of IEEPA tariff refunds during the three and six months ended June 30, 2026, consisting of $25.8 million of principal recognized as a reduction of cost of goods sold, as all related inventory has been sold as of June 30, 2026, and $0.9 million of excess amount recognized as interest income in the accompanying condensed consolidated statements of income.

Business Highlights and Trends

•We continue to realign our global supply chain within a dynamic global trade environment. We increased domestic purchases for the three and six months ended June 30, 2026 to 19.5% and 19.0%, respectively, from

23

14.6% and 14.2%, respectively, for the three and six months ended June 30, 2025, and diversified sourcing to countries with more favorable trade conditions. Specifically, we reduced sourcing from Taiwan to 45.9% and 46.0%, respectively, for the three and six months ended June 30, 2026, from 58.0% and 56.0%, respectively, for the three and six months ended June 30, 2025. Further, we increased our purchases from Indonesia, South America, and Singapore for the three and six months ended June 30, 2026 to an aggregate of 12.0% and 9.1%, respectively, from 0.9% and 1.1%, respectively, for the three and six months ended June 30, 2025.

•We recognized $25.8 million as a reduction of cost of goods sold and $0.9 million as interest income related to IEEPA tariff refunds during the three and six months ended June 30, 2026. The recorded IEEPA tariff refunds increased our gross profit and our adjusted EBITDA by $25.8 million, our other income, net, by $0.9 million, and our net income by $20.2 million, respectively, for the three and six months ended June 30, 2026. The refunds delivered benefits to our gross margin and our adjusted EBITDA margin of 18.9% and 10.2%, respectively, and our net income margin of 14.8% and 8.0%, respectively, for the three and six months ended June 30, 2026. The refunds represent the recovery of tariffs paid in prior periods and provided a one-time benefit to our results during the quarter. Cash received from IEEPA tariff refunds, included in cash from operating activities, totaled $25.2 million during the three and six months ended June 30, 2026.

•We achieved record quarterly net sales of $136.3 million for the three months ended June 30, 2026, an increase of 9.9% in amount and 8.9% in volume, compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, we recorded net sales of $253.2 million, an increase of 11.3% in amount and 9.6% in volume, compared to the six months ended June 30, 2025.

•Our gross margin was 56.6% and 46.9% for the three and six months ended June 30, 2026, an increase of 1,700 basis points and 740 basis points compared to the three and six months ended June 30, 2025.

•We achieved record quarterly net income of $29.6 million for the three months ended June 30, 2026, an increase of 168.3% compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, we recorded net income of $36.8 million, an increase of 105.9%, compared to the six months ended June 30, 2025.

•Our net income margin was 21.8% and 14.5% for the three and six months ended June 30, 2026, an increase of 1,290 and 670 basis points compared to the three and six months ended June 30, 2025.

•We generated $33.2 million and $40.3 million in net cash from operating activities for the three and six months ended June 30, 2026, an increase of 240.0% and 130.9% compared to the three and six months ended June 30

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1758021/000175802126000010/krt-20251231.htm
Complete FY 2025 MD&A: /company/KRT/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-03-13
Report date: 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors including, but not limited to, those discussed in Part I, Item 1A. “Risk Factors.” and elsewhere in this Annual Report on Form 10-K. See “Forward Looking Statements” above for further explanation.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide and percentages may not precisely reflect the absolute figures.

Overview

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. Our products are available in plastic, paper, biopolymer-based, and other compostable forms. We are a leader in product innovation, offering a growing line of environmentally-friendly products to our customers, who are increasingly focused on sustainability. We also offer customized solutions to our customers, including new product development, design, printing, and logistics services.

We operate our business strategically and with broad flexibility to provide both our large and small customers with the wide spectrum of products they need to successfully run and grow their businesses. We believe we have established ourselves as a differentiated and reliable provider of high-quality products relative to our competitors. Our operating model entails generating the majority of our revenue from the distribution of products sourced from a diversified global network, complemented by select manufacturing capabilities in the U.S., which allows us to provide customers with broad product choices and customized offerings with short lead times. This model provides us with the flexibility to adjust the mix of our product offering from import and manufacturing in evolving economic environments to drive operating efficiency and sustained margin expansion and ensure quality of our customer service and product availability during global supply chain disruptions. Starting in 2023 and continuing into 2025, in light of the rising domestic labor and other operating costs and dropping ocean freight rates, we executed a strategy to pivot into a more asset-light model by increasing imports and scaling back domestic manufacturing. Amidst the evolving tariff environment throughout 2025, we have placed our strategic emphasis on expanding and diversifying our global vendor network to enhance the resilience of our supply chain, minimize tariff impact on our operations and financial results, and maintain a strong margin profile and operating cash flows. We are prioritizing strong partnerships with reliable and cost-efficient sources and more favorable trade terms, negotiating additional vendor support, exploring opportunities to collaborate with vendors in new countries and geographies, while reallocating our own domestic production capabilities to optimize overall product margin.

We operate an approximately 500,000 square foot distribution center located in Rockwall, Texas, an approximately 300,000 square foot distribution center in Chino, California, and an approximately 76,000 square foot distribution center located in Kapolei, Hawaii. We have selected manufacturing capabilities in all of these facilities. In addition, we operate seven other distribution centers located in Puyallup, Washington; Branchburg, New Jersey; Kapolei, Hawaii; Aurora, Illinois; Mesa, Arizona; Sugar Land, Texas, and Chino, California. Our distribution centers are strategically located in proximity to major population centers, including the Los Angeles, New York, Chicago, Dallas, Houston, Seattle, Phoenix, Atlanta, and Honolulu metro areas. On October 17, 2025, we announced that Lollicup, our wholly-owned business operating subsidiary, relocated its headquarters to Rockwall, Texas, from Chino, California.

We manage and evaluate our operations in one reportable segment.

2025 Business Highlights and Trends

•We have strategically and swiftly realigned our global supply chain in 2025 against a backdrop of higher tariffs. We reduced purchases from China from approximately 22% of global sourcing in 2024 to approximately 15% in 2025, maintained purchases from Taiwan at approximately 50% of our global sourcing, and diversified sourcing to countries with more favorable trade conditions, including Malaysia and Vietnam, which in aggregate accounted for approximately 17% of our global sourcing in 2025 compared to 9% in 2024.

35

•We continued to expand our eco-friendly product offerings, contributing to meaningful sales growth. Sales from eco-friendly products as a percentage of total sales increased from 33.6% for the year ended December 31, 2024 to 34.1% for the year ended December 31, 2025. We started shipment on a newly-acquired paper bag contract with a chain account in the second half of 2025, growing paper bags sales from $7.9 million for the year ended December 31, 2024 to $13.7 million for the year ended December 31, 2025.

•We continued our transition to a more asset-light model by further scaling back manufacturing in the U.S. and increasing imports from diversified sources to continue to improve our margin profile. For the year ended December 31, 2025, manufacturing accounted for approximately 9% of our net sales, down from 11% in the prior year.

•We achieved record net sales of $467.7 million for the year ended December 31, 2025, an increase of 10.7% in net sales amount and 11.2% in volume compared to the year ended December 31, 2024.

•We recorded gross margin of 36.8% for the year ended December 31, 2025, reflecting an expected decrease of 210-basis-point compared to the year ended December 31, 2024, as cost of goods sold in 2025 reflected elevated inventory cost due to tariffs in place.

•We recorded net income of $32.7 million for the year ended December 31, 2025, an increase of 6.0% compared to the year ended December 31, 2024.

•We recorded net income margin of 7.0% for the year ended December 31, 2025, compared to 7.3% for the year ended December 31, 2024, reflecting the decrease in gross margin, as discussed above, and an improvement in operating cost leverage.

•Net cash provided by operating activities was $33.8 million for the year ended December 31, 2025, a decrease of $14.2 million compared to the year ended December 31, 2024.

•We generated Adjusted EBITDA, a non-GAAP measure defined below, of $55.2 million for the year ended December 31, 2025, a decrease of 0.2% compared to the year ended December 31, 2024.

•Our Adjusted EBITDA margin, a non-GAAP measure defined below, was 11.8% for the year ended December 31, 2025, a decrease of 130 basis points compared to the year ended December 31, 2024.

•We had financial liquidity of $45.6 million as of December 31, 2025.

•During the year ended December 31, 2025, we returned a total of $36.1 million to our shareholders in the form of regular quarterly cash dividends.

•On November 4, 2025, our Board of Directors approved a first-ever share repurchase program of up to $15.0 million in common stock. We repurchased approximately $3.0 million of common stock during the period.

•On February 5, 2026, our Board of Directors declared another regular quarterly cash dividend of $0.45 per share on our common stock, which was paid on or about February 27, 2026 to the stockholders of record at the close of business on February 20, 2026.

Trends in Our Business

The following trends have contributed to the results of our operations, and we anticipate that they will continue to affect our future results:

•A significant trend in the restaurant industry is the changing perception of food delivery and take-out compared to traditional on-premise dining. There is a clear growing preference for delivery and take-out, and we expect this trend to continue positively influencing our operating results, as more customers will need packaging and containers to support the rising demand from food delivery and take-out consumers.

•Environmental concerns regarding disposable products, broadly, have resulted in a number of significant changes to the food-service industry, including regulations applicable to our customers. We believe this trend will have a positive long-lasting impact on our results of operations, as we expect there will be an increased demand for eco-friendly and compostable single-use disposable products. Our eco-friendly products made up 34.1% of total sales during the year ended December 31, 2025, compared to 33.6% during the prior year, and we expect sales generated from eco-friendly products as percentage of total sales to continue to grow.

•Most of our products are sourced from vendors abroad and as a result we incur freight costs from these overseas import shipments, which could be a significant component of our cost of goods sold. Elevated ocean freight rates

36

could pressure our gross margin, and if we raise our price, dampen the demand for our products. Steady or dropping ocean freight could yield significant opportunities for us to expand our margin. However, it could also reduce the barrier of entry, intensifying the competition.

•Beginning in the first quarter of 2025, the U.S. government announced additional tariffs on goods imported into the U.S. from numerous countries and multiple nations have responded with reciprocal tariffs and other actions. We believe this trend will have either a positive or a negative impact on our results of operations, depending on whether we are able to source our raw materials or manufactured products from countries with minimum tariffs, whether any previously imposed tariffs are removed and whether we can implement procedures to mitigate the impact from the tariffs. The Company continues to monitor the economic effects of such announcements. The Company has implemented short- and long-term mitigation efforts. Based on the current tariff policies, the Company expects to partially offset the operating profit impact of the enacted tariffs with supply chain adjustments and productivity and cost savings actions. To the extent additional tariffs or other trade restrictions are enacted and the Company is unable to offset the tariffs or the tariffs negatively impact demand, the Company’s revenue and profitability could be adversely impacted.

•The cost of raw materials used to manufacture our products, including polyethylene terephthalate, or PET, plastic resin, aluminum, and paper boards, may continue to fluctuate. Since negotiated sales contracts and the market largely determine the pricing for our products, we are, at times, limited in our ability to raise prices and pass through any impacts of inflation to our costs. There can also be lags between cost inflation and the implementation of price increases, which could negatively impact our gross margin. Conversely, periods of deflation, where raw material costs decrease, may create pricing pressure and start price wars, potentially requiring us to lower prices, which could also affect our gross margin. We believe price fluctuations will have either a positive or a negative impact on our results of operations in the future, depending on whether raw material costs increase or decrease and whether we can successfully implement price adjustments to maintain gross margin.

•Supplier chain effectiveness could have a long-lasting impact on our operations and financial results. We believe this tren

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/KRT/mda/fy2025/
All MD&A years: /company/KRT/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/KRT/mda/fy2024/): filed 2025-03-14; accession 0001628280-25-012816 (https://www.sec.gov/Archives/edgar/data/1758021/000162828025012816/krt-20241231.htm)
- [FY 2023 MD&A](/company/KRT/mda/fy2023/): filed 2024-03-15; accession 0001628280-24-011444 (https://www.sec.gov/Archives/edgar/data/1758021/000162828024011444/krt-20231231.htm)
- [FY 2022 MD&A](/company/KRT/mda/fy2022/): filed 2023-03-16; accession 0001628280-23-008299 (https://www.sec.gov/Archives/edgar/data/1758021/000162828023008299/krt-20221231.htm)
- [FY 2021 MD&A](/company/KRT/mda/fy2021/): filed 2022-03-31; accession 0001628280-22-007993 (https://www.sec.gov/Archives/edgar/data/1758021/000162828022007993/krt-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3089 Plastics Products, NEC) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/KRT.md · JSON record: /company/KRT.json · verified financials: /company/KRT/financials.json / /company/KRT/financials.csv · machine TOC for the whole site: /llms.txt