Karat Packaging Inc 2025年度报告

Dear Fellow Shareholders: For 2025, I am pleased to report that Karat Packaging again delivered solid profitable growth and turned inanother excellent year, despite ongoing global trade volatility. Our net sales in 2025 grew 10.7% in amount and 11.2% in volume compared to 2024 and we sustained stronggross margin at 36.8% for 2025 as we strategically and swiftly realigned our global supply chain against abackdrop of higher tariffs. Our flexible and nimble business model, strengthened by our successful ongoingefforts to diversify sourcing, remains a key distinguishing characteristic that continues to help us deliverconsistent, effective results. Our agility and responsiveness to customer needs continue to drive robust topline growth. We expanded ourbusiness within existing customer accounts, broadened our reach through new product offerings, penetrated newgeographies and provided enhanced logistics services for end markets. Sales to chains and distributors grew12.5%, and sales through the online channel increased 7.4% year-over-year in 2025. In 2025, one of ourstrategic focuses was to expand our new paper bags product category, which is gaining strong traction anddelivering meaningful revenue contributions. In addition to supplying paper bags to one of our largest national chain accounts, which we won in 2025, we areactively pursuing further opportunities, some of which are at the final confirmation stage. Complementing thesesuccesses, we are further expanding this category by supplying generic paper bags to smaller customeraccounts. This strategy positions us to continue capturing market share in the years ahead, while strengtheningour position as a leading provider of sustainable, eco‑friendly disposable foodservice products. We ended the year with $91.0 million in working capital and financial liquidity of $45.6 million, reflecting theCompany’s financial strength. Despite substantial duty and tariff payments, we effectively executed our workingcapital management and generated $33.8 million in net cash from operating activities. We also returned a totalof $36.1 million to shareholders through quarterly cash dividends and repurchased $3.0 million in shares of ourstock under our first-ever share repurchase program, authorized by our Board of Directors in early November2025. These actions reinforce our commitment to a balanced capital allocation strategy that prioritizesmeaningful shareholder returns and long‑term growth investments. We remain committed to advancing top-line growth while continuously strengthening operational efficiency andupholding disciplined cost management. These priorities, supported by our resilient business model and focusedexecution, position us to enter 2026 with strong momentum. On behalf of our entire team and Board of Directors, I thank you for your continued confidence and support.Together, we remain steadfast in navigating today’s dynamic environment, and we are energized by theopportunities ahead as we work to create enduring value for all our stakeholders. Sincerely, Alan Yu,Chief Executive Officer Forward-Looking Statements This Letter contains “forward-looking statements” within the Private Securities Litigation Reform Act of 1995.All statements other than statements of historical or current fact included in this Letter are forward-lookingstatements, including but not limited to statements regarding our long-term growth plans, priorities, plannedinvestments and opportunities in 2026 and beyond. These statements are neither promises nor guarantees, butinvolve known and unknown risks, uncertainties and other important factors that may cause Karat's actualresults, performance or achievements to be materially different from any future results, performance orachievements expressed or implied by the forward-looking statements, including but not limited to the riskfactors discussed under the caption “Risk Factors” in Karat's Annual Report on Form 10-K for the fiscal yearended December 31, 2025, and its other filings with the Securities and Exchange Commission. These riskfactors could cause actual results to differ materially from those indicated by the forward-looking statementsmade in this annual report. Any such forward-looking statements represent management’s estimates as of thedate of this annual report. While Karat may elect to update such forward-looking statements at some point in thefuture, it disclaims any obligation to do so, except as required by law, even if subsequent events cause its viewsto change. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐No☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐No☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the