Karat Packaging Inc. (NASDAQ:KRT) Q4 2022 Earnings Call Transcript

Alan Yu: Sure, plastic actually dropped more than anything. Paper has not dropped at all. Paper costs in the U.S. has been €“ actually has gone up a lot in 2022, even to the end of the year. I’ve even seen a price increase in January of 2023 on the paper side. But on the plastic side, it has dropped a lot, more than 40% in terms of risen costs, and that’s basically it’s known to everyone. One thing about the restaurant industry, restaurant doesn’t really – even though they order, they buy direct from manufacturers like us. They actually have to €“ have to have a third party logistics such as a Cisco, Sigma or other national distribution company. They were due to mark-up, and in terms of what is the landed cost, the actual cost is determined not by just by buying the product from us, but also from the logistic side of the business.

Now, in that part of the segment of the business, I’ve seen that increase a lot in terms of facility and labors. So that might be it in the case that the actual landed cost has gone up versus the product cost has come down.

Jake Bartlett: Okay, thanks a lot. I appreciate it.

Alan Yu: Thank you, Jake.

Operator: 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 : Well, thank you everyone for joining the conference call of Karat Packaging, and I look forward to the future conference call. Thank you all, everyone. Goodbye!

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