Karat Packaging Inc
For the period ended Dec 31, 2023. Filed Mar 15, 2024.
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FY2023 · Filed Mar 15, 2024
KRT$37.79+3.5%Stored close · as of Nov 10, 2026
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Item 8. Consolidated Statements of Cash Flows
KARAT PACKAGING, INC. AND SUBSIDIARIES
(In thousands)
| Year Ended December 31, | ||
|---|---|---|
| 2023 | 2022 | |
| Cash flows from operating activities | ||
| Net income | $33,180 | $25,837 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization (including $1,214 associated with variable interest entity for both the year ended December 31, 2023 and 2022) | 10,783 | 10,405 |
| Adjustments to allowance for bad debt | (711) | 1,010 |
| Adjustments to inventory reserve | (399) | 6 |
| Write-off of inventory | 3,897 | 3,470 |
| Impairment of deposits | 549 | 465 |
| Write-off of vendor prepayment | 1,124 | — |
| Loss (gain), net, on disposal of machinery and equipment | 2,002 | (32) |
| Change in fair value of interest rate swap (including $0 and $2,159 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | — | (2,159) |
| Amortization of loan fees (including $57 and $40 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 81 | 40 |
| Accrued interest on certificates of deposit | (155) | — |
| Stock-based compensation | 770 | 2,047 |
| Amortization of operating right-of-use assets | 4,969 | 3,822 |
| Deferred income taxes | (959) | (478) |
| (Increase) decrease in operating assets | ||
| Accounts receivable (including $6 and $18 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 2,860 | 1,854 |
| Inventories | (3,820) | (16,210) |
| Prepaid expenses and other current assets (including $109 and $75 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | (466) | (1,514) |
| Other assets (including $14 and $27 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 1,439 | (36) |
| Increase (decrease) in operating liabilities | ||
| Accounts payable (including $60 and $495 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 696 | 89 |
| Accrued expenses (including $34 and $402 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 1,571 | 1,571 |
| Related party payable | 366 | 2,937 |
| Income taxes payable | — | (85) |
| Customer deposits (including $49 and $77 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | (330) | 66 |
| Operating lease liability | (4,642) | (3,780) |
| Other liabilities (including $0 and $1 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 574 | 149 |
| Net cash provided by operating activities | $53,379 | $29,474 |
| Year Ended December 31, | ||
|---|---|---|
| 2023 | 2022 | |
| Cash flows from investing activities | ||
| Purchases of property and equipment | (2,835) | (2,657) |
| Proceeds on disposal of property and equipment | 841 | 77 |
| Payments for costs incurred from sale of machinery and equipment | (186) | — |
| Deposits paid for joint venture investment | (2,900) | (5,876) |
| Deposits refunded from joint venture investment | 6,900 | 1,876 |
| Deposits refunded from cancelled machinery orders | 503 | — |
| Deposits paid for property and equipment | (6,309) | (12,090) |
| Proceeds from settlement of interest rate swap (including $0 and $825 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | — | 825 |
| Purchase of short-term investments (including $8,000 and $0 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | (49,188) | — |
| Redemption of short-term investments (including $8,000 and $0 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 23,000 | — |
| Net cash used in investing activities | $(30,174) | $(17,845) |
| Cash flows from financing activities | ||
| Proceeds from line of credit | — | 21,100 |
| Payments on line of credit | — | (21,100) |
| Proceeds from long-term debt (including $8,000 and $27,477 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | 8,000 | 27,477 |
| Payments for lender fees | (61) | — |
| Payments on long-term debt (including $1,010 and $21,572 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | (1,010) | (21,572) |
| Tax withholding on vesting of restricted stock units | (18) | — |
| Proceeds from exercise of common stock options | 123 | 51 |
| Dividends paid to shareholders | (20,909) | (6,964) |
| Distributions to shareholders, net of tax withholding (including $2,295 and $0 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | (2,295) | — |
| Payments of noncontrolling interest tax withholding (including $0 and $1,063 associated with variable interest entity for the year ended December 31, 2023 and 2022, respectively) | — | (1,063) |
| Net cash used in financing activities | $(16,170) | $(2,071) |
| Net increase in cash and cash equivalents | 7,035 | 9,558 |
| Cash and cash equivalents | ||
| Beginning of year | $16,041 | $6,483 |
| End of year | $23,076 | $16,041 |
| Supplemental disclosures of non-cash investing and financing activities: | ||
| Transfers from deposit to property and equipment | $10,463 | $9,859 |
| Non-cash purchases of property and equipment | 148 | 196 |
| Supplemental disclosures of cash flow information: | ||
| Cash paid for income tax | $11,765 | $8,303 |
| Cash paid for interest | $1,996 | $1,978 |
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