Karat(KRT) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales for Q1 2025 increased by 8.4% to $103.6 million, compared to $95.6 million in Q1 2024[6] - Gross profit for Q1 2025 rose by 8.4% to $40.8 million, maintaining a gross margin of 39.3%[9] - Net income for Q1 2025 was $6.8 million, up 5.2% from $6.5 million in the prior-year quarter, with a net income margin of 6.6%[11] - Adjusted EBITDA for Q1 2025 was $11.9 million, with an adjusted EBITDA margin of 11.5%, down from 14.2% in Q1 2024[12] - Free Cash Flow for Q1 2025 increased to $6,630,000, compared to $5,635,000 in Q1 2024, reflecting a 17.7% growth[24] - Diluted earnings per common share for Q1 2025 was $0.32, slightly up from $0.31 in Q1 2024[24] - Adjusted diluted earnings per common share decreased to $0.33 in Q1 2025 from $0.40 in Q1 2024[24] Operating Expenses - Operating expenses for Q1 2025 increased by 11.6% to $32.9 million, primarily due to higher shipping and transportation costs[10] - Total depreciation and amortization for Q1 2025 was $2,688,000, compared to $2,629,000 in Q1 2024[24] - Interest expense for Q1 2025 was $509,000, a slight decrease from $524,000 in Q1 2024[24] - The company reported a provision for income taxes of $2,121,000 in Q1 2025, up from $1,975,000 in Q1 2024[24] Cash and Liquidity - Cash and cash equivalents as of March 31, 2025, were $32.5 million, compared to $31.6 million at the end of 2024[22] - Cash from operating activities for Q1 2025 was $7,726,000, compared to $6,559,000 in Q1 2024[24] Future Outlook - The company expects net sales for Q2 2025 to increase by high single-digit to low double-digit percentages compared to the prior-year quarter[4] Dividend - The board approved a quarterly dividend of $0.45 per share, payable on or about May 23, 2025[14] Sourcing Strategy - The company reduced reliance on China for sourcing from approximately 20% at the end of 2024 to 15% in March 2025[3] Online Sales Growth - Online business sales increased nearly 20% during Q1 2025, contributing to overall growth[4] Non-GAAP Measures - The company utilized non-GAAP financial measures to provide additional clarity on its operating results, including Adjusted EBITDA and Free Cash Flow[26]