Karat Packaging Inc.

ask a question during that time, please start, followed by the number one on your telephone keypad. Thank you. I'd like now to hand the call over to Roger Pondell, Investor Relations. You may now begin.

Thank you, Operator, and good afternoon, everyone. Welcome to Carrot Packaging's 2024 fourth quarter conference call. I'm Roger Pondell with Pondell Wilkinson, Carrot 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, Jan Goh. Before I turn the 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 factor section of the company's most recent Form 10-K, as filed with the Securities and Exchange Commission, and 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 CARED 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, adjusted diluted earnings per share, and free cash flow, which are non-GAAP financial measures as defined by SEC Reg G. A reconciliation of the most directly comparable gap measures to the non-gap financial measures is included in today's press release, which is now posted on the company's website. And with that, it's my pleasure to turn the call over to CEO Alan Yu. Alan? Thank you, Roger.

Good afternoon, everyone. We end at 2024 with a strong fourth quarter. A sales volume grew 14%, a net sale grew 6.3%, over the prior year quarter despite a 4.8 million out of period benefit included in the prior year quarter from online sales platform be related to the first three quarter in 2023 we achieved gross margin of 39.2 percent in the fourth quarter versus 35.7 percent in the prior year period as positive momentum continues in 2025 we are prioritizing to further strengthen our supply chain resilience in preparation for tariff uncertainties. We have reduced our reliance on China for imported goods to approximately 20%, shifting our sourcing to countries with more favorable trade conditions and minimum tariffs like Taiwan. In 2024, we imported over 50% of our global purchases from Taiwan. We continue to actively work on further diversifying our supply chain outside of China and securing additional vendor discounts to mitigate pricing and margin pressures. While we try to protect pricing, we are evaluating product pricing holistically and have implemented pricing increases in certain categories to be effected in March and April. With a strong U.S. dollar and expected stable ocean freight rates this year, we expect the recent imposed tariffs to have minimum long-term impact on margins. Geographically, for the quarter, we experienced the strongest growth in the Midwest, and we continued to penetrate market in other regions, including the Pacific Northwest and East Coast. Sales in California, our biggest market, began to stabilize in the preceding third quarter, and I'm happy to report that the positive trend continued in the fourth quarter, when sales began to grow modestly in December. Sales of our eco-friendly product in the fourth quarter increased 11% year-over-year and represented 34.5% of total sales. We continue to observe more state and local government legislation requiring recyclable or compostable food service product. For example, California's ban on styrofoam went into effect on January 1, 2025. We expect demand for our eco-friendly product lines will accelerate and we continue to actively developing new and innovative products to enhance our competitive position. Our strategic focus for 2025 are to drive sales growth and improve our operational efficiencies. In January and February 2025, we are seeing robust sales growth and continued strength in our pipeline. We expect the positive momentum to continue into the rest of 2025, and we are closing new businesses expected to convert into revenue in the second half of the year. To support our anticipated growth, as recently announced, we signed a new lease on a 187,000 square foot distribution center near our headquarters in Chino, California. This facility almost doubles our current distribution capability in California and provides much needed capacities to support our anticipated growth and add approximately 500 new SKUs of paper products. ahead of the summer season. We anticipate the new distribution center to be fully operational by about this May. We are also re-evaluating our operating processes and investing in automation and AI support to enhance productivity and maximize operation efficiency with a lean team. As part of our long-term growth strategy, we will continue to explore sales opportunity outside of our traditional channels, such as the supermarket sector, we are in the product testing stage with some of our large supermarket customers to further expand our relationship with them. And we are working on expanding our sales team with experienced representatives focused on this sector. With our strong operating cash flow, as well as liquidity and balance sheet, and positive long-term outlets, our Board of Directors again approved an increase in the quarterly cash dividend payments to $0.45 per share, paid on February 28, 2025, to stockholder of record as of February 24, 2025. I will now turn the call over to Jian Guo, our Chief Financial Officer, to discuss the company financial result in greater detail. Jian?