Karat Packaging Inc. (NASDAQ:KRT) Q3 2023 Earnings Call Transcript

Jian Guo: Yes, Jake, let me take that question. So, if you look at our Q3 SG&A, as we mentioned earlier, we did — this number does include about $550,000 a secondary offering-related transaction cost, which we don’t expect to recur in the fourth quarter of 2023. I think we previously talked about if we look at our cost structure, I think to our — in terms of the split between fixed and variable OpEx, it’s about half-and-half. So, I think the way that we think about the fourth quarter, if you take roughly half of the run rate SG&A of what we incurred in the third quarter, and then apply kind of a similar leverage of the percentage to the variable portion, I think that will get you very close to what we expect the fourth quarter OpEx number is going to be.

We are, obviously, continue to look into areas to improve our leverage, our OpEx leverage. And there are definitely areas that we’re focusing on. So, we do hope to coming up a little bit of efficiency in the fourth quarter.

Jake Bartlett: Got it. Okay, thank you so much, I appreciate it.

Alan Yu: Thank you, Jake.

Operator: And this concludes our question-and-answer session. I would like to turn the conference back over to Alan Yu for any closing remarks.

Alan Yu: Thank you, Operator. And thanks to all of you for joining us today. We appreciate your continued support. We remain confident about Karat’s future. And we look forward to keep you appraised on our progress. Have a great evening, and wonderful Thanksgiving. Thank you very much. Bye-bye.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.