Karat Packaging Inc. (NASDAQ:KRT) Q2 2024 Earnings Conference Call August 8, 2024 5:00 PM ET

Company Participants

Roger Pondel - IR, PondelWilkinson Inc.
Alan Yu - CEO
Jian Guo - CFO

Conference Call Participants

Ryan Merkel - William Blair
Jake Bartlett - Truist
Ryan Meyers - Lake Street Capital Markets
Brian Butler - Stifel

Operator

Thank you for standing by. My name is Celine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Karat Packaging Second Quarter 2024 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the call over to Roger Pondel, Investor Relations. Please go ahead.

Roger Pondel

Thank you, operator and good afternoon everyone and welcome to Karat Packaging's 2024 Second Quarter Conference Call. I'm Roger Pondel with PondelWilkinson, Karat Packaging's Investor Relations firm. It will be my pleasure momentarily to introduce the company's Chief Executive Officer, Alan Yu; and its Chief Financial Officer, Jian Guo.

Before I turn this call over to Alan I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factors section of the company's most recent Form 10-K, as filed with the Securities and Exchange Commission, copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time-to-time. Actual results could differ materially from these forward-looking statements and Karat Packaging undertakes no obligation to update any forward-looking statements except as required by law.

Please also note that during this call, we will be discussing adjusted EBITDA, adjusted EBITDA margin, and adjusted diluted earnings per share, which are non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of the most directly comparable GAAP measures to the non-GAAP financial measures is included in today's press release, which is now posted on the company's website.

And with that, I will turn the call over to CEO, Alan Yu. Alan?

Alan Yu

Thank you, Roger. Good afternoon everyone. Net sales for our 2024 second quarter grew 3.5% over the prior year period and sales volume grew 3.2%. Our business pipeline continues to expand with the signing of new national and regional chain accounts. However initiation of some new orders is taking longer than anticipated during the quarter, mainly due to administrative setup procedures at the larger chain account and software demand in certain categories, which we do not expect to recur in the back end of the year.