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CHINO, Calif. - Karat Packaging Inc. (NASDAQ:KRT), a specialty distributor and manufacturer of disposable foodservice products with a market capitalization of $619 million and strong financial health according to InvestingPro, announced Tuesday that certain members of its management team plan to sell 1.5 million shares of common stock in an underwritten public offering.
The selling stockholders will grant underwriters a 30-day option to purchase up to an additional 225,000 shares. Karat Packaging will not offer any shares in this transaction and will receive no proceeds from the sale. The company, which has delivered a 19% return to shareholders over the past year, maintains a healthy balance sheet with a current ratio of 2.86.
BofA Securities and William Blair & Company are serving as joint lead book-runners for the offering, which is being made through a shelf registration statement filed with the Securities and Exchange Commission on March 21, 2025, and declared effective on March 28, 2025.
The company distributes and manufactures food containers, bags, tableware, cups, cutlery, and other foodservice products primarily used by restaurants throughout the United States. Its product line includes the eco-friendly Karat Earth brand featuring sustainably-focused items made from renewable resources.
The offering will be conducted through a prospectus supplement and accompanying prospectus filed with the SEC, according to the company’s press release statement.
Karat Packaging, which also provides customized solutions including product development, design, printing, and logistics services, trades on the Nasdaq under the ticker symbol KRT. The company offers a notable 7.3% dividend yield and maintains moderate debt levels, with detailed financial analysis available through InvestingPro’s comprehensive research reports covering over 1,400 US stocks.
In other recent news, Karat Packaging Inc. reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.33, compared to the projected $0.28. The company also exceeded revenue forecasts, achieving $103.6 million against an expected $102.07 million. This performance marks an 8.4% year-over-year increase in net sales, driven by a 10.9% growth in sales volume. The company’s net income rose by 5.2% to $6.8 million, reflecting strong operational efficiency. Analysts noted the company’s strategic move to reduce reliance on China for sourcing, with plans to further decrease imports from China to under 10% by the end of the second quarter. Karat Packaging is also expanding its domestic manufacturing capabilities to meet rising demand. The company anticipates high single to low double-digit growth in net sales for the second quarter, with expectations of maintaining a consistent gross margin. These developments highlight Karat Packaging’s proactive approach to navigating supply chain challenges and geopolitical tensions.
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