Karat Packaging Inc.

Good day, and welcome to the Carrot Packaging Second Quarter 2026 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Roger Pondell. Please go ahead.

Good afternoon, everyone, and welcome to Cured Packaging's 2026 second quarter conference call. I'm Roger Pondell with Pondell Wilkinson, Cured 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, Jian Guo. 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 Quire 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 Regulation G. A reconciliation of the most directly comparable GAAP measures to the non-GAAP financial measures is included in today's press release, which is now posted on the company's website. And with that, I will turn the call over to CEO Alan Yu. Alan?

Thank you, Roger. Good afternoon, everyone. We deliver record quarterly net sales of more than $136 million, reflecting the strength of our customers' demand and accelerated momentum in our online business growth. During the quarter, our sales pipeline expanded, adding four new chain accounts, which further broadened our market reach and created additional opportunities for future revenue growth. We continue to experience encouraging momentum across our business, highlighted by the strong performance of our online channel, where net sales increased 23.6% year-over-year. Our eco-friendly product portfolio also continued to gain traction. benefiting from the continued expansion of SKUs and growth in the paperback categories. As a result, eco-friendly products represented 33.8% of total sales during the quarter, compared with 31.8% in the prior year period. Our results also benefited from IEPA tariff refunds, which refers higher tariff costs absorbed in the prior periods. and further contributed to the strong reported profitability. While we were pleased to capture this benefit in the quarter, our focus remains on the fundamental drivers of the business and sustaining strong long-term financial performances. To support our long-term growth strategy, we are currently finalizing a lease for a 47,000 square foot warehouse for a new distribution center in Orlando, Florida. which we expect to be operational by the third quarter of this year. The new facility is expected to enhance CARA's ability to better service customers throughout the Southeast, improve fulfillment capability for our growing e-commerce business, reduce delivery time, and provide additional infrastructure to support future growth. At the same time, we remain focused on driving operational excellence. We are continuing to execute initiatives designed to enhance efficiency across the organizations while carefully managing costs, aiming to support sustainable profitability and position the company for continued success. During this quarter, we achieved gross margin of 56.6%, including the benefit from the IEPA tariff refund of 1,890 basis points. This far higher product costs and ocean freight rates The performance underscores the strength of our sourcing capabilities. Our sourcing diversification initiative continues to deliver tangible benefits, strengthening carrier competitive advantage through reliable product availability and cost competitiveness. In the second quarter, domestic purchase increased to nearly 20% of total sourcing, while importing from Taiwan represented 46%, China represented 11%, and sourcing from Indonesia, Singapore and South America represented an aggregate of 12%. Overall, we are pleased with the progress we are making with the expanding sales pipeline, new customer wins, strong e-commerce growth and a continued focus on the operational discipline. We believe Carrot is well positioned to advance profitability and long-term growth. I will now turn the call over to Jian Guo, our Chief Financial Officer, to discuss the company financial results in greater detail. Jian?