Karat Packaging (KRT) 10-Q 9 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 06, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-40336
Entity Registrant Name	Karat Packaging Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-2237832
Entity Address, Address Line One	6185 Kimball Avenue
Entity Address, City or Town	Chino
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91708
City Area Code	626
Local Phone Number	965-8882
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	KRT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,964,413
Entity Central Index Key	0001758021
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents (including $7,770 and $2,022 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	$ 28,162	$ 16,041
Short-term investments (including $8,000 and $0 associated with variable interest entity at September 30, 2023, and December 31, 2022, respectively)	18,063	0
Accounts receivable, net of allowance for doubtful accounts of $430 and $1,260 at September 30, 2023 and December 31, 2022, respectively (including $0 and $6 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	33,984	29,912
Inventories	71,657	71,206
Prepaid expenses and other current assets (including $25 and $191 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	6,823	6,641
Total current assets	158,689	123,800
Property and equipment, net (including $44,489 and $45,399 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	96,690	95,568
Deposits	1,672	12,413
Goodwill	3,510	3,510
Intangible assets, net	333	353
Operating right-of-use assets	17,068	15,713
Other assets (including $55 and $38 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	2,002	818
Total assets	279,964	252,175
Current liabilities
Accrued expenses (including $461 and $625 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	8,858	9,005
Income taxes payable	8,010	0
Customer deposits (including $116 and $165 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	803	1,281
Long-term debt, current portion (including $1,111 and $957 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	1,111	957
Operating lease liabilities, current portion	4,927	4,511
Other payables	49	0
Total current liabilities	45,697	39,253
Deferred tax liability	5,156	5,156
Long-term debt, net of current portion and debt discount of $219 and $216 at September 30, 2023 and December 31, 2022, respectively (including $48,668 and $41,558 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively, and debt discount of $219 and $216 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	48,668	41,558
Operating lease liabilities, net of current portion	12,866	11,623
Other liabilities (including $1,302 associated with variable interest entity at both September 30, 2023 and December 31, 2022)	2,824	2,652
Total liabilities	115,211	100,242
Commitments and Contingencies (Note 17)
Karat Packaging Inc. stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding, at both September 30, 2023 and December 31, 2022	0	0
Common stock, $0.001 par value, 100,000,000 shares authorized, 19,916,839 and 19,893,839 shares issued and outstanding, respectively, as of September 30, 2023 and 19,908,005 and 19,885,005 shares issued and outstanding, respectively, as of December 31, 2022	20	20
Additional paid in capital	86,620	85,792
Treasury stock, $0.001 par value, 23,000 shares at both September 30, 2023 and December 31, 2022	(248)	(248)
Retained earnings	67,773	56,118
Total Karat Packaging Inc. stockholders’ equity	154,165	141,682
Noncontrolling interest	10,588	10,251
Total stockholders’ equity	164,753	151,933
Total liabilities and stockholders’ equity	279,964	252,175
Nonrelated Party
Current liabilities
Accounts payable (including $60 and $2 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	19,384	18,559
Related Party
Current liabilities
Accounts payable (including $60 and $2 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	2,555	4,940
VIE, Primary Beneficiary
Current assets
Cash and cash equivalents (including $7,770 and $2,022 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	7,770	2,022
Short-term investments (including $8,000 and $0 associated with variable interest entity at September 30, 2023, and December 31, 2022, respectively)	8,000	0
Prepaid expenses and other current assets (including $25 and $191 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	25	191
Property and equipment, net (including $44,489 and $45,399 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	44,489	45,399
Other assets (including $55 and $38 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	55	38
Current liabilities
Accounts payable (including $60 and $2 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	60	2
Accrued expenses (including $461 and $625 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	461	625
Customer deposits (including $116 and $165 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	116	165
Long-term debt, current portion (including $1,111 and $957 associated with variable interest entity at September 30, 2023 and December 31, 2022, respectively)	1,111	957
Other liabilities (including $1,302 associated with variable interest entity at both September 30, 2023 and December 31, 2022)	$ 1,302	$ 1,302

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Cash and cash equivalents	$ 28,162	$ 16,041
Short-term investments	18,063	0
Allowance for bad debt	430	1,260
Prepaid expenses and other current assets	6,823	6,641
Property and equipment, net	96,690	95,568
Other assets	2,002	818
Accrued expenses	8,858	9,005
Customer deposits	803	1,281
Long-term debt, current portion	1,111	957
Long-term debt, net of current portion and debt discount	219	216
Other liabilities	$ 2,824	$ 2,652
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	19,916,839	19,908,005
Common stock, shares outstanding (in shares)	19,893,839	19,885,005
Treasury stock, par value (in dollars per share)	$ 0.001	$ 0.001
Treasury stock, shares (in shares)	23,000	23,000
VIE, Primary Beneficiary
Cash and cash equivalents	$ 7,770	$ 2,022
Short-term investments	8,000	0
Allowance for bad debt	0	6
Prepaid expenses and other current assets	25	191
Property and equipment, net	44,489	45,399
Other assets	55	38
Accounts payable	60	2
Accrued expenses	461	625
Customer deposits	116	165
Long-term debt, current portion	1,111	957
Long-term debt, net of current portion and debt discount	48,668	41,558
Other liabilities	$ 1,302	$ 1,302

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net sales	$ 105,528	$ 109,996	$ 310,069	$ 330,290
Cost of goods sold	66,584	75,828	191,120	227,869
Gross profit	38,944	34,168	118,949	102,421
Operating expenses
Selling expense	8,004	9,413	25,500	28,218
General and administrative expense (including $702 and $665 associated with variable interest entity for the three months ended September 30, 2023 and 2022, respectively; $2,020 and $1,899 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	19,870	16,861	53,767	49,033
Impairment expense and (gain) loss, net, on disposal of machinery	(310)	(16)	2,231	(33)
Total operating expenses	27,564	26,258	81,498	77,218
Operating income	11,380	7,910	37,451	25,203
Other income (expense)
Rental income (including $235 and $239 associated with variable interest entity for the three months ended September 30, 2023 and 2022, respectively; and $721 and $715 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	259	239	781	715
Other income (expense), net	32	28	(58)	(235)
Gain on foreign currency transactions	455	369	350	1,352
Interest income (including $80 and $0 interest income associated with variable interest entity for the three months ended September 30, 2023 and 2022, respectively; and $278 and $2,160 interest income associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	454	0	1,040	2,160
Interest expense (including $528 and $470 interest expense associated with variable interest entity for the three months ended September 30, 2023 and 2022, respectively; and $1,499 and $1,379 interest expense associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(536)	(493)	(1,516)	(1,576)
Total other income, net	664	143	597	2,416
Income before provision for income taxes	12,044	8,053	38,048	27,619
Provision for income taxes	2,904	1,900	9,045	6,323
Net income	9,140	6,153	29,003	21,296
Net income attributable to noncontrolling interest	75	57	431	2,189
Net income attributable to Karat Packaging Inc.	$ 9,065	$ 6,096	$ 28,572	$ 19,107
Basic and diluted earnings per share:
Basic (in dollars per share)	$ 0.46	$ 0.31	$ 1.44	$ 0.96
Diluted (in dollars per share)	$ 0.45	$ 0.31	$ 1.43	$ 0.96
Weighted average common shares outstanding, basic (in shares)	19,890,646	19,809,417	19,888,244	19,808,813
Weighted average common shares outstanding, diluted (in shares)	19,994,648	19,938,042	19,962,999	19,922,047

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
General and administrative expenses	$ 19,870	$ 16,861	$ 53,767	$ 49,033
Rental income	259	239	781	715
Interest income	454	0	1,040	2,160
Interest expense	536	493	1,516	1,576
VIE, Primary Beneficiary
General and administrative expenses	702	665	2,020	1,899
Rental income	235	239	721	715
Interest income	80	0	278	2,160
Interest expense	$ 528	$ 470	$ 1,499	$ 1,379

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Total Stockholders’ Equity Attributable to Karat Packaging Inc.	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Noncontrolling Interest
Balance at the beginning of period (in shares) at Dec. 31, 2021			19,827,417
Balance at the beginning of period at Dec. 31, 2021	$ 132,025	$ 122,900	$ 20	$ (248)	$ 83,694	$ 39,434	$ 9,125
Treasury stock, balance at the beginning of period (in shares) at Dec. 31, 2021				(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	611	611			611
Exercise of common stock options (in shares)			5,000
Exercise of common stock options	51	51			51
Noncontrolling interest tax withholding	(387)	0					(387)
Net income	7,943	6,667				6,667	1,276
Balance at the end of period (in shares) at Mar. 31, 2022			19,832,417
Balance at the end of period at Mar. 31, 2022	140,243	130,229	$ 20	$ (248)	84,356	46,101	10,014
Treasury stock, balance at the end of period (in shares) at Mar. 31, 2022				(23,000)
Balance at the beginning of period (in shares) at Dec. 31, 2021			19,827,417
Balance at the beginning of period at Dec. 31, 2021	132,025	122,900	$ 20	$ (248)	83,694	39,434	9,125
Treasury stock, balance at the beginning of period (in shares) at Dec. 31, 2021				(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	21,296
Balance at the end of period (in shares) at Sep. 30, 2022			19,832,417
Balance at the end of period at Sep. 30, 2022	154,082	143,832	$ 20	$ (248)	85,519	58,541	10,250
Treasury stock, balance at the end of period (in shares) at Sep. 30, 2022				(23,000)
Balance at the beginning of period (in shares) at Mar. 31, 2022			19,832,417
Balance at the beginning of period at Mar. 31, 2022	140,243	130,229	$ 20	$ (248)	84,356	46,101	10,014
Treasury stock, balance at the beginning of period (in shares) at Mar. 31, 2022				(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	565	565			565
Noncontrolling interest tax withholding	(487)						(487)
Net income	7,200	6,344				6,344	856
Balance at the end of period (in shares) at Jun. 30, 2022			19,832,417
Balance at the end of period at Jun. 30, 2022	147,521	137,138	$ 20	$ (248)	84,921	52,445	10,383
Treasury stock, balance at the end of period (in shares) at Jun. 30, 2022				(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon vesting of‎ restricted stock units, net shares withheld to‎ cover taxes (in shares)			0
Issuance of common stock upon vesting of‎ restricted stock units, net shares withheld to‎ cover taxes	598	598			598
Stock-based compensation	(190)						(190)
Net income	6,153	6,096				6,096	57
Balance at the end of period (in shares) at Sep. 30, 2022			19,832,417
Balance at the end of period at Sep. 30, 2022	$ 154,082	143,832	$ 20	$ (248)	85,519	58,541	10,250
Treasury stock, balance at the end of period (in shares) at Sep. 30, 2022				(23,000)
Balance at the beginning of period (in shares) at Dec. 31, 2022	19,885,005		19,908,005
Balance at the beginning of period at Dec. 31, 2022	$ 151,933	141,682	$ 20	$ (248)	85,792	56,118	10,251
Treasury stock, balance at the beginning of period (in shares) at Dec. 31, 2022	(23,000)			(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon vesting of‎ restricted stock units, net shares withheld to‎ cover taxes (in shares)			2,452
Issuance of common stock upon vesting of‎ restricted stock units, net shares withheld to‎ cover taxes	$ (14)	(14)			(14)
Stock-based compensation	277	277			277
Net income	9,186	9,005				9,005	181
Balance at the end of period (in shares) at Mar. 31, 2023			19,910,457
Balance at the end of period at Mar. 31, 2023	$ 161,382	150,950	$ 20	$ (248)	86,055	65,123	10,432
Treasury stock, balance at the end of period (in shares) at Mar. 31, 2023				(23,000)
Balance at the beginning of period (in shares) at Dec. 31, 2022	19,885,005		19,908,005
Balance at the beginning of period at Dec. 31, 2022	$ 151,933	141,682	$ 20	$ (248)	85,792	56,118	10,251
Treasury stock, balance at the beginning of period (in shares) at Dec. 31, 2022	(23,000)			(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)	5,800
Net income	$ 29,003
Balance at the end of period (in shares) at Sep. 30, 2023	19,893,839		19,916,839
Balance at the end of period at Sep. 30, 2023	$ 164,753	154,165	$ 20	$ (248)	86,620	67,773	10,588
Treasury stock, balance at the end of period (in shares) at Sep. 30, 2023	(23,000)			(23,000)
Balance at the beginning of period (in shares) at Mar. 31, 2023			19,910,457
Balance at the beginning of period at Mar. 31, 2023	$ 161,382	150,950	$ 20	$ (248)	86,055	65,123	10,432
Treasury stock, balance at the beginning of period (in shares) at Mar. 31, 2023				(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared	(6,965)	(6,965)				(6,965)
Issuance of common stock upon vesting of‎ restricted stock units, net shares withheld to‎ cover taxes (in shares)			582
Issuance of common stock upon vesting of‎ restricted stock units, net shares withheld to‎ cover taxes	(4)	(4)			(4)
Stock-based compensation	216	216			216
Net income	10,677	10,502				10,502	175
Balance at the end of period (in shares) at Jun. 30, 2023			19,911,039
Balance at the end of period at Jun. 30, 2023	165,306	154,699	$ 20	$ (248)	86,267	68,660	10,607
Treasury stock, balance at the end of period (in shares) at Jun. 30, 2023				(23,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared	(9,952)	(9,952)				(9,952)
Stock-based compensation	250	250			250
Exercise of common stock options (in shares)			5,800
Exercise of common stock options	103	103			103
Noncontrolling interest tax withholding	(94)						(94)
Net income	$ 9,140	9,065				9,065	75
Balance at the end of period (in shares) at Sep. 30, 2023	19,893,839		19,916,839
Balance at the end of period at Sep. 30, 2023	$ 164,753	$ 154,165	$ 20	$ (248)	$ 86,620	$ 67,773	$ 10,588
Treasury stock, balance at the end of period (in shares) at Sep. 30, 2023	(23,000)			(23,000)

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023
Statement of Stockholders' Equity [Abstract]
Dividends paid to stockholders (in dollars per share)	$ 0.50	$ 0.35

CONDENSED CONSOLIDATED STATEM_5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net income	$ 29,003,000	$ 21,296,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including $910 associated with variable interest entity for both the nine months ended September 30, 2023 and 2022)	8,058,000	7,752,000
Adjustments to allowance for doubtful accounts	(673,000)	1,112,000
Adjustments to inventory reserve	(27,000)	441,000
Write-off of inventory	3,225,000	0
Impairment of deposits	523,000	0
Loss (gain), net, on disposal of machinery and equipment	1,708,000	(33,000)
Change in fair value of interest rate swap (including $0 and $2,159 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	0	(2,159,000)
Amortization of loan fees (including $41 and $28 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	57,000	28,000
Accrued interest on certificates of deposit	(63,000)	0
Stock-based compensation	743,000	1,774,000
Amortization of operating right-of-use assets	3,617,000	2,897,000
(Increase) decrease in operating assets
Accounts receivable (including $6 and $21 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(3,399,000)	(5,068,000)
Inventories	(3,649,000)	(15,255,000)
Prepaid expenses and other current assets (including $22 and $396 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	431,000	(2,264,000)
Other assets (including $34 and $458 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(75,000)	(43,000)
Increase (decrease) in operating liabilities
Accounts payable (including $57 and $470 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	1,701,000	459,000
Accrued expenses (including $163 and $414 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(147,000)	1,130,000
Related party payable	(2,385,000)	2,855,000
Income taxes payable	8,010,000	111,000
Customer deposits (including $49 and $156 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(478,000)	(29,000)
Operating lease liability	(3,313,000)	(2,897,000)
Other liabilities (including $0 and $1 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	172,000	150,000
Other payables	49,000	242,000
Net cash provided by operating activities	43,088,000	12,499,000
Cash flows from investing activities
Purchases of property and equipment	(2,870,000)	(2,007,000)
Proceeds from disposal of property and equipment	605,000	76,000
Payments for costs incurred from sale of machinery and equipment	(189,000)	0
Deposits paid for joint venture investment	(2,900,000)	(4,000,000)
Deposits refunded from joint venture investment	6,900,000	0
Deposit refund from cancelled property and equipment purchase	503,000	0
Deposits paid for property and equipment	(5,390,000)	(11,471,000)
Proceeds from settlement of interest rate swap (including $0 and $825 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	0	825,000
Purchase of short-term investments (including $8,000 and $0 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(28,000,000)	0
Redemption of short-term investments	10,000,000	0
Net cash used in investing activities	(21,341,000)	(16,577,000)
Cash flows from financing activities
Proceeds from line of credit	0	21,100,000
Payments on line of credit	0	(21,100,000)
Proceeds from long-term debt (including $8,000 and $27,477 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	8,000,000	27,477,000
Payments for lender fees	(61,000)	0
Payments on long-term debt (including $733 and $21,338 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	(733,000)	(21,338,000)
Tax withholding on vesting of restricted stock units	(18,000)	0
Proceeds from exercise of common stock options	103,000	51,000
Dividends paid to shareholders	(16,917,000)	0
Payments of noncontrolling interest tax withholding (including $0 and $1,064 associated with variable interest entity for the nine months ended September 30, 2023 and 2022, respectively)	0	(1,064,000)
Net cash (used in) provided by financing activities	(9,626,000)	5,126,000
Net increase in cash and cash equivalents	12,121,000	1,048,000
Cash and cash equivalents
Beginning of period	16,041,000	6,483,000
End of period	28,162,000	7,531,000
Supplemental disclosures of non-cash investing and financing activities:
Transfers from deposit to property and equipment	8,953,000	6,639,000
Non-cash purchases of property and equipment	71,000	0
Supplemental disclosures of cash flow information:
Cash paid for income tax	309,000	7,069,000
Cash paid for interest	$ 1,493,000	$ 1,541,000

CONDENSED CONSOLIDATED STATEM_6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Depreciation and amortization	$ 8,058	$ 7,752
Change in fair value of interest rate swap	0	2,159
Amortization of loan fees	(57)	(28)
Accounts receivable	3,399	5,068
Prepaid expenses and other current assets	(431)	2,264
Other assets	75	43
Accounts payable	1,701	459
Accrued expenses	(147)	1,130
Customer deposits	478	29
Other liabilities	172	150
Proceeds from settlement of interest rate swap	0	825
Purchase of short-term investments	28,000	0
Proceeds from long-term debt	8,000	27,477
Payments on long-term debt	(733)	(21,338)
Payments of noncontrolling interest tax withholding associated with variable interest entity	0	(1,064)
VIE, Primary Beneficiary
Depreciation and amortization	910	910
Change in fair value of interest rate swap	0	2,159
Amortization of loan fees	41	28
Accounts receivable	6	21
Prepaid expenses and other current assets	22	396
Other assets	34	458
Accounts payable	57	(470)
Accrued expenses	163	414
Customer deposits	49	(156)
Other liabilities	0	1
Proceeds from settlement of interest rate swap	0	825
Purchase of short-term investments	8,000	0
Proceeds from long-term debt	8,000	27,477
Payments on long-term debt	(733)	(21,338)
Payments of noncontrolling interest tax withholding associated with variable interest entity	$ 0	$ (1,064)

Nature of Operations

Nature of Operations	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	Nature of Operations Lollicup USA Inc. (“Lollicup”) was incorporated on January 21, 2001 under the laws of the State of California as an S-corporation. Effective January 1, 2018, Lollicup elected to convert from an S-Corporation to a C-Corporation. Karat Packaging Inc. (“Karat Packaging”) was incorporated on September 26, 2018 as a Delaware corporation and became the holding company for Lollicup (collectively, the “Company”) through a share exchange with the shareholders of Lollicup. The Company is a manufacturer and distributor of single-use disposable products used in a variety of restaurant and foodservice settings. The Company supplies a wide range of products such as food containers, tableware, cups, lids, cutlery, and straws. The products are available in plastic, paper, biopolymer-based and other compostable forms. In addition to manufacturing and distribution, the Company offers customized solutions to customers, including new product development, design, printing, and logistics services, and distributes certain specialty food and beverages products, such as boba and coffee drinks. The Company supplies products to national and regional distributors, supermarkets, restaurants, and convenience stores as well as to smaller chains and businesses including boutique coffee houses, bubble tea cafes, pizza parlors and frozen yogurt shops. The Company currently operates manufacturing facilities and distribution and fulfillment centers in Chino, California; Rockwall, Texas and Kapolei, Hawaii. In addition, the Company operates seven other distribution centers located in Sumner, Washington; Summerville, South Carolina; Branchburg, New Jersey; Kapolei, Hawaii; City of Industry, California, Aurora, Illinois; and Sugar Land, Texas

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as promulgated in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. The financial information as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 is unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022, as included in the Company's Annual Report on Form 10-K filed on March 16, 2023. Principles of Consolidation: The condensed consolidated financial statements include the accounts of Karat Packaging and its wholly-owned and controlled operating subsidiaries, Lollicup, Lollicup Franchising, LLC (“Lollicup Franchising”) and Global Wells, a variable interest entity wherein the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated. Variable Interest Entities: In 2017, Lollicup along with three other unrelated parties formed Global Wells. Lollicup has a 13.5% ownership interest and a 25% voting interest in Global Wells, which is located in Rockwall, Texas. The purpose of this entity is to own, construct, and manage warehouses and manufacturing facilities. Global Wells’ operating agreement may require its members to make additional contributions upon the unanimous decision of the members or when the cash in Global Wells’ bank account falls below $50,000. In the event that a member is unable to make an additional capital contribution, the other members will be required to make contributions to offset the amount that member cannot contribute, up to $25,000. In 2018, Lollicup entered into an operating lease with Global Wells for a facility in Rockwall, Texas. Upon the execution of this lease, it was determined that Lollicup holds current and potential rights that give it the power to direct activities of Global Wells that most significantly impact Global Wells’ economic performance, receive significant benefits, or the obligation to absorb potentially significant losses, resulting in Lollicup having a controlling financial interest in Global Wells. As a result, Lollicup was deemed to be the primary beneficiary of Global Wells and has consolidated Global Wells under the risk and reward model of ASC Topic 810, Consolidations . Assets recognized as a result of consolidating Global Wells do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating Global Wells do not represent additional claims of the Company’s general assets; they represent claims against the specific assets of Global Wells. See Note 9 — Long-Term Debt for a description of the two term loans that Global Wells had with financial institutions as of September 30, 2023. Noncontrolling Interests: The Company consolidates its variable interest entity, Global Wells, in which the Company is the primary beneficiary. Noncontrolling interests represent third-party equity ownership interests in Global Wells. The Company recognizes noncontrolling interests as equity in the condensed consolidated financial statements separate from the Company’s stockholders’ equity. The amount of net income attributable to noncontrolling interests is disclosed in the condensed consolidated statements of income. Tax payments made by the Company on behalf of the noncontrolling interests are deducted from their equity balances, as shown in the condensed consolidated statements of stockholders’ equity. Estimates and Assumptions: Management uses estimates and assumptions in preparing financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ materially from the estimates that were assumed in preparing the condensed consolidated financial statements. Estimates that are significant to the condensed consolidated financial statements include stock-based compensation, allowance for doubtful accounts and reserve for slow-moving and obsolete inventory. Reporting Segments: The Company manages and evaluates its operations in one reportable segment. This segment consists of manufacturing and supply of a broad portfolio of single-use products that are used to serve food and beverages and are available in plastic, paper, foam, post-consumer recycled content and renewable materials. It also consists of the distribution of certain specialty food and beverage products, such as boba and coffee drinks, and certain restaurant and warehouse supplies. The Company’s long-lived assets are all located in the United States, and its revenues are all generated in the United States. Fair Value Measurements: The Company has financial instruments classified within the fair value hierarchy, which consist of the following: • At September 30, 2023, the Company had money market accounts and short-term investments classified as Level 1 within the fair value hierarchy. The short-term investments comprise of certificates of deposits with an original maturity of longer than 90 days and are reported at their carrying value as current assets on the condensed consolidated balance sheet. The carrying value of these short-term investments approximates fair value as they were purchased near or on September 30, 2023. At December 31, 2022, the Company had money market accounts classified as Level 1 within the fair value hierarchy, and reported as current assets on the condensed consolidated balance sheet. The following table summarizes the Company’s fair value measurements by level at September 30, 2023: Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 19,024 $ — $ — Short-term investments 18,063 — — Fair value, September 30, 2023 $ 37,087 $ — $ — The following table summarize the Company’s fair value measurements by level at December 31, 2022: Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 10,609 $ — $ — Fair value, December 31, 2022 $ 10,609 $ — $ — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, related-party payable, accrued and other liabilities and other payables at September 30, 2023 and December 31, 2022, approximated fair value because of the short maturity of these instruments. The following is a summary of the carrying amount and estimated fair value of the $23,000,000 and $28,700,000 term loans that mature in September 2026 and July 2027, respectively (the "2026 Term Loan" and "2027 Term Loan," respectively): September 30, 2023 Carrying Amount Estimated Fair Value (in thousands) 2026 Term Loan $ 21,640 $ 19,496 2027 Term Loan 28,139 27,090 $ 49,779 $ 46,586 December 31, 2022 Carrying Amount Estimated Fair Value (in thousands) 2026 Term Loan $ 22,079 $ 20,115 2027 Term Loan 20,436 18,918 $ 42,515 $ 39,033 The fair value of these financial instruments was determined using Level 2 inputs. New and Recently Adopted Accounting Standards: The Company is an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and as such, the Company have elected to take advantage of certain reduced public company reporting requirements. In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards, as a result, the Company will adopt new or revised accounting standards on the relevant dates in which adoption of such standards is required for private companies. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" , which adds to US GAAP an impairment model known as the current expected credit loss ("CECL") model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The ASU is also intended to reduce the complexity of US GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. The FASB subsequently issued ASU 2019-10 (Topic 326), “ Financial Instruments-Credit Losses: Effective Dates ” which amends the effective date for SEC filers that are eligible to be ‘smaller reporting companies’, non-SEC filers and all other companies, including not-for-profit companies and employee benefit plans. The Company adopted this new standard using the modified retrospective adoption method beginning with its first quarter in 2023. The application of this new standard did not have a material impact on its consolidated financial statements.

Goodwill

Goodwill	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill The following table summarizes the activity in the Company's goodwill from December 31, 2022 to September 30, 2023: (in thousands) Balance at December 31, 2022 $ 3,510 Goodwill acquired — Balance at September 30, 2023 $ 3,510

Joint Venture

Joint Venture	9 Months Ended
	Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]
Joint Venture	Joint Venture On April 6, 2022, the Company entered into a joint venture agreement (the "JV Agreement") to establish a new corporation, Bio Earth, to build a bagasse factory in Taiwan. The JV Agreement stipulated an investment by the Company of approximately $6,500,000 for a 49% interest in Bio Earth. Through December 31, 2022, the Company made net payments totaling $4,000,000 under the JV Agreement. During the three months ended March 31, 2023, the Company made additional payments of $2,900,000 and received a refund of $900,000 under the JV Agreement. On May 8 2023, the Company entered into a Share Transfer Agreement (the "Share Transfer Agreement"), with approval of the Board of Directors, to sell all of its equity interest in Bio Earth to Keary Global for a total consideration of approximately $6,100,000 (the "Share Transfer"), representing the total net deposits made by the Company of $6,000,000 under the JV Agreement as discussed above and interest accruing at 5% per annum. Keary Global and its affiliate, Keary International are both owned or controlled by Jeff Yu, brother of our Chief Executive Officer, Alan Yu. Concurrent with the Share Transfer Agreement, the Company also entered into an agreement with Keary Global, Bio Earth and Happiness Moon Co., Ltd. (“Happiness Moon”) pursuant to which (i) Lollicup agreed to transfer all Bio Earth shares, as well as its rights and obligations under the JV Agreement to Keary Global, (ii) Happiness Moon and Bio Earth agree to foregoing and (iii) Bio Earth shall manage the regulatory and registration requirements related to the Share Transfer. As of the end of the second quarter of 2023, the Company had completed the Share Transfer to Keary Global and received the total consideration of $6,100,000 in full. See Note 15 — Related Party Transactions for further discussion on our business activities with Keary Global.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories consist of the following: September 30, 2023 December 31, 2022 (in thousands) Raw materials $ 9,427 $ 18,061 Semi-finished goods 2,413 1,850 Finished goods 60,539 52,044 Subtotal 72,379 71,955 Less inventory reserve (722) (749) Total inventories $ 71,657 $ 71,206 The Company incurred inventory adjustments and write-off of $281,000 and $3,225,000 for the three and nine months ended September 30, 2023, respectively. There were no inventory adjustments and write-offs for the three and nine months ended September 30, 2022. Included within the amount for the nine months ended September 30, 2023, was a $1,710,000 write-off of raw materials, as the Company disposed of certain machinery and equipment in executing the strategy to scale back production in certain locations. Inventory adjustments and write-offs are included in cost of goods sold on the accompanying condensed consolidated statements of income. See Note 14 — Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery for further discussion about the disposal of machinery.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment September 30, 2023 December 31, 2022 (in thousands) Machinery and equipment $ 70,150 $ 70,234 Leasehold improvements 19,070 19,063 Vehicles 7,480 6,725 Furniture and fixtures 1,141 1,016 Building 38,505 36,599 Land 11,907 11,907 Computer hardware and software 593 593 148,846 146,137 Less: accumulated depreciation and amortization (52,156) (50,569) Total property and equipment, net $ 96,690 $ 95,568

Line of Credit

Line of Credit	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Line of Credit	Line of Credit Pursuant to the terms of the Business Loan Agreement, dated February 23, 2018, between Lollicup, as borrower, and Hanmi Bank, as lender (as amended, the “Loan Agreement”), the Company has a line of credit with a maximum borrowing capacity of $40,000,000 (the “Line of Credit”) secured by the Company’s assets. The Company is not required to pay a commitment (unused) fee on the undrawn portion of the Line of Credit and interest is payable monthly. The Company is required to comply with certain financial covenants, including a minimum current ratio, minimum debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio and a minimum fixed charge coverage ratio. On March 14, 2023, the Company amended the Line of Credit. Prior to March 14, 2023, interest accrued at the annual rate of prime less 0.25% with a minimum floor of 3.25%. The amendment on March 14, 2023, among other things, (1) extended the maturity date to March 14, 2025, and (2) revised the interest on any Line of Credit borrowings to an annual rate of one month term Secured Overnight Financing Rate ("SOFR") plus 2.50%, with a SOFR floor of 1.0%. The Line of Credit also includes a standby letter of credit sublimit, which was amended and increased to $5,000,000 from $2,000,000 on June 20, 2023. The Company had no borrowings outstanding under the Line of Credit as of both September 30, 2023 and December 31, 2022. The amount issued under the standby letter of credit was $3,736,000 and $1,070,000 as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023, the maximum remaining amount that could be borrowed under the Line of Credit was $36,264,000. As of both September 30, 2023 and December 31, 2022, the Company was in compliance with the financial covenants under the Line of Credit. Long-term debt consists of the following: September 30, 2023 December 31, 2022 (in thousands) The 2026 Term Loan, with an initial balance of $16,115,000 and an option to request for additional advances up to a maximum of $6,885,000 through September 2022, which the Company exercised in February 2022. Interest accrues at a fixed rate of 3.5% per annum. Principal and interest payments of $116,000 are due monthly throughout the term of the loan, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by Global Wells and one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt service coverage ratio. $ 21,711 $ 22,168 The 2027 Term Loan, with an initial balance of $20,700,000 and an option to request for additional advances up to a maximum of $8,000,000 through June 30, 2023, which the Company exercised in March 2023. Interest accrues at a fixed rate of 4.375% per annum. Prior to August 1, 2023, principal and interest payments of $104,000 are due monthly. Beginning August 1, 2023, monthly principal and interest payments increased to $144,000 for the remainder of the loan term, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt coverage ratio. $ 28,287 $ 20,563 Long-term debt 49,998 42,731 Less: unamortized loan fees (219) (216) Less: current portion (1,111) (957) Long-term debt, net of current portion $ 48,668 $ 41,558 At September 30, 2023, future maturities are: (in thousands) 2023 (remainder) $ 277 2024 1,122 2025 1,179 2026 20,798 2027 26,622 $ 49,998 The 2027 Loan was a refinance in June 2022 from a previous $21,580,000 term loan, and was accounted for as a debt modification. The Company was in compliance with all of its financial covenants as of both September 30, 2023 and December 31, 2022.

Accrued Expenses

Accrued Expenses	9 Months Ended
	Sep. 30, 2023
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses The following table summarizes information related to accrued expense liabilities: September 30, 2023 December 31, 2022 (in thousands) Accrued miscellaneous expenses $ 2,368 $ 1,646 Accrued interest 73 108 Accrued payroll 1,180 1,586 Accrued vacation and sick pay 834 543 Accrued shipping expenses 1,478 1,918 Accrued professional services fees 499 600 Accrued property tax 876 1,164 Accrued sale taxes and use taxes 1,021 992 Accrued sales discount 529 448 Total accrued expenses $ 8,858 $ 9,005

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Long-Term Debt	Line of Credit Pursuant to the terms of the Business Loan Agreement, dated February 23, 2018, between Lollicup, as borrower, and Hanmi Bank, as lender (as amended, the “Loan Agreement”), the Company has a line of credit with a maximum borrowing capacity of $40,000,000 (the “Line of Credit”) secured by the Company’s assets. The Company is not required to pay a commitment (unused) fee on the undrawn portion of the Line of Credit and interest is payable monthly. The Company is required to comply with certain financial covenants, including a minimum current ratio, minimum debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio and a minimum fixed charge coverage ratio. On March 14, 2023, the Company amended the Line of Credit. Prior to March 14, 2023, interest accrued at the annual rate of prime less 0.25% with a minimum floor of 3.25%. The amendment on March 14, 2023, among other things, (1) extended the maturity date to March 14, 2025, and (2) revised the interest on any Line of Credit borrowings to an annual rate of one month term Secured Overnight Financing Rate ("SOFR") plus 2.50%, with a SOFR floor of 1.0%. The Line of Credit also includes a standby letter of credit sublimit, which was amended and increased to $5,000,000 from $2,000,000 on June 20, 2023. The Company had no borrowings outstanding under the Line of Credit as of both September 30, 2023 and December 31, 2022. The amount issued under the standby letter of credit was $3,736,000 and $1,070,000 as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023, the maximum remaining amount that could be borrowed under the Line of Credit was $36,264,000. As of both September 30, 2023 and December 31, 2022, the Company was in compliance with the financial covenants under the Line of Credit. Long-term debt consists of the following: September 30, 2023 December 31, 2022 (in thousands) The 2026 Term Loan, with an initial balance of $16,115,000 and an option to request for additional advances up to a maximum of $6,885,000 through September 2022, which the Company exercised in February 2022. Interest accrues at a fixed rate of 3.5% per annum. Principal and interest payments of $116,000 are due monthly throughout the term of the loan, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by Global Wells and one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt service coverage ratio. $ 21,711 $ 22,168 The 2027 Term Loan, with an initial balance of $20,700,000 and an option to request for additional advances up to a maximum of $8,000,000 through June 30, 2023, which the Company exercised in March 2023. Interest accrues at a fixed rate of 4.375% per annum. Prior to August 1, 2023, principal and interest payments of $104,000 are due monthly. Beginning August 1, 2023, monthly principal and interest payments increased to $144,000 for the remainder of the loan term, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt coverage ratio. $ 28,287 $ 20,563 Long-term debt 49,998 42,731 Less: unamortized loan fees (219) (216) Less: current portion (1,111) (957) Long-term debt, net of current portion $ 48,668 $ 41,558 At September 30, 2023, future maturities are: (in thousands) 2023 (remainder) $ 277 2024 1,122 2025 1,179 2026 20,798 2027 26,622 $ 49,998 The 2027 Loan was a refinance in June 2022 from a previous $21,580,000 term loan, and was accounted for as a debt modification. The Company was in compliance with all of its financial covenants as of both September 30, 2023 and December 31, 2022.

Interest Rate Swap

Interest Rate Swap	9 Months Ended
	Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest Rate Swap	Interest Rate Swap In June 2022, Global Wells terminated its ten-year floating-to-fixed interest rate swap, and recognized cash proceeds of $825,000 as gain on the settlement, which was included in interest income in the accompanying condensed consolidated statements of income. This interest rate swap had a notional value of $21,580,000 as of the effective date of June 13, 2019 based on the prime rate versus a 5.0% fixed rate. For the nine months ended September 30, 2022, Global Wells recognized $2,159,000 (including the gain on settlement) as interest income related to the interest rate swap.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation In January 2019, the Company’s Board of Directors adopted the 2019 Stock Incentive Plan (the “Plan”). A total of 2,000,000 shares of common stock were authorized and reserved for issuance under the Plan in the form of incentive or nonqualified stock options and stock awards. A compensation committee appointed by the Board of Directors of the Company determines the terms and conditions of each grant under the Plan. Employees, directors, and consultants are eligible to receive stock options and stock awards under the Plan. The aggregate number of shares available under the Plan and the number of shares subject to outstanding options may be increased or decreased by the Plan administrator to reflect any changes in the outstanding common stock by reason of any recapitalization, reorganization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock or similar transaction. The exercise price of incentive stock options may not be less than the fair market value of the common stock at the date of grant. The exercise price of incentive stock options granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant. The term of each incentive and nonqualified option is based upon conditions as determined by the option agreement; however, the term can be no more than ten years from the date of the grant. In the case of an incentive stock option granted to an optionee who, at the time the option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary, the term of the option will be a shorter term as provided in the option agreement, but not more than five years from the date of the grant. As of September 30, 2023, a total of 1,334,017 shares of common stock were available for further award grants under the Plan. For the three months ended September 30, 2023 and 2022, the Company recognized a total of $250,000 and $598,000 in stock-based compensation expense, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized a total of $743,000 and $1,774,000 in stock-based compensation expense, respectively. The Company recognizes stock-based compensation over the vesting period, which is generally three (3) years for both the restricted stock units and stock options. Stock Options A summary of the Company’s stock option activity under the Plan for the period ended September 30, 2023 is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contract Life (In Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2022 420,000 $ 18.6 8.8 $ — Exercised (5,800) $ 17.7 Forfeited (10,000) $ 18.9 Outstanding at September 30, 2023 404,200 $ 18.6 8.1 $ 1,807 Vested and expected to vest at September 30, 2023 404,200 $ 18.6 8.1 $ 1,807 Exercisable at September 30, 2023 130,867 $ 18.6 8.1 $ 581 There were no stock options granted during the nine months ended September 30, 2023. At September 30, 2023, total remaining stock-based compensation cost for unvested stock options under the Plan was approximately $282,000. The cost is expected to be recognized over a weighted-average period of 1.0 year. The aggregate intrinsic value is calculated by subtracting the exercise price of the option from the closing price of the Company’s common stock on September 30, 2023, multiplied by the number of shares per each option. Restricted Stock Units The Company issued restricted stock units to its employees. The following table summarizes the unvested restricted stock units for the nine months ended September 30, 2023: Number of Shares Outstanding Weighted Average Grant Date Fair Value Unvested at December 31, 2022 82,146 11.47 Vested (4,550) 16.64 Forfeited (1,667) 10.00 Unvested at September 30, 2023 75,929 11.19 There were no restricted stock units granted during the nine months ended September 30, 2023. At September 30, 2023, total remaining stock-based compensation cost for unvested restricted stock units was approximately $39,000. The cost is expected to be recognized over a weighted-average period of 0.6 years.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share (a) Basic Basic earnings per share is calculated by dividing the net income attributable to equity holders of the Company for the period by the weighted average number of common shares outstanding during the period. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except per share data) Net income attributable to Karat Packaging Inc. $9,065 $6,096 $28,572 $19,107 Weighted average number of common shares in issue 19,891 19,809 19,888 19,809 Basic earnings per share $ 0.46 $ 0.31 $ 1.44 $ 0.96 (b) Diluted Diluted earnings per share is calculated based upon the weighted average number of common shares and common equivalent shares outstanding during the period, calculated using the treasury stock method. Under the treasury stock method, exercise proceeds include the amount the employee must pay for exercising stock options and the amount of compensation cost related to stock awards for future services that the Company has not yet recognized. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. The following table summarizes the calculation of diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except per share data) Net income attributable to Karat Packaging Inc. $ 9,065 $ 6,096 $ 28,572 $ 19,107 Weighted average number of common shares in issue 19,891 19,809 19,888 19,809 Dilutive shares Stock options and restricted stock units 104 129 75 113 Adjusted weighted average number of common shares 19,995 19,938 19,963 19,922 Diluted earnings per share $ 0.45 $ 0.31 $ 1.43 $ 0.96 For the three months ended September 30, 2023 and 2022, a total of 0 and 434,000 shares of potentially dilutive shares, respectively, have been excluded in the diluted earnings per share calculation due to their anti-dilutive impact on earnings per share. For the nine months ended September 30, 2023 and 2022, a total of 285,000 and 452,000 shares of

Leases

Leases	9 Months Ended
	Sep. 30, 2023
Leases [Abstract]
Leases	Leases The Company primarily leases manufacturing facilities, distribution centers and office spaces with lease terms expiring through 2031. The Company recognized the following lease costs in the accompanying condensed consolidated statement of income: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Operating lease expense $ 1,606 $ 1,336 $ 4,454 $ 3,256 Short-term lease expense 106 4 143 14 Variable lease expense 260 212 750 501 Total lease expense $ 1,972 $ 1,552 $ 5,347 $ 3,771 For the three months ended September 30, 2023 and 2022, rent expense included in operating expenses was $1,653,000 and $1,260,000, respectively, and rent expense included in cost of goods sold was $319,000 and $292,000, respectively. For the nine months ended September 30, 2023 and 2022, rent expense included in operating expenses was $4,542,000 and $2,974,000, respectively, and rent expense included in cost of goods sold was $805,000 and $797,000, respectively. The following table presents supplemental information related to operating leases: September 30, 2023 December 31, 2022 Weighted average remaining lease term 4.41 years 4.27 years Weighted average discount rate 5.8 % 5.3 % Nine Months Ended September 30, 2023 2022 (in thousands) Cash paid for amounts included in measurement of lease obligations: Operating cash flows from operating leases $ 4,129 $ 3,120 As of September 30, 2023, future lease payments under operating leases were as follows: (in thousands) 2023 (remainder) $ 1,544 2024 5,254 2025 3,928 2026 4,044 2027 2,711 Thereafter 2,885 Total future lease payments 20,366 Less: imputed interest 2,573 Total lease liability balance $ 17,793 In September 2020, Global Wells entered into an operating lease with an unrelated party as the landlord. The lease generates monthly rental payments from $58,000 to $61,000 over the lease term of 38 months beginning September 9, two

Impairment Expense and (Gain) L

Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery and Equipment	9 Months Ended
	Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]
Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery and Equipment	Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery and Equipment In February 2023, the Company started to execute a strategy to increase imports and scale back manufacturing in certain locations. The Company subsequently reached an agreement with two unrelated third-party vendors in Taiwan to sell them certain of its manufacturing machinery and equipment. The sale of these assets occurred in the second and third quarter of 2023. During the same period, the Company also cancelled certain equipment purchase commitments that it had previously paid deposits towards, and disposed of certain machinery and equipment through abandonment. The Company recognized the following amounts related to impairment expense and (gain) loss, net, on disposal of machinery: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) (Gain) loss, net, on disposal of machinery in scaling back manufacturing $ (310) $ — $ 1,612 $ — (Gain) loss, net, on disposal of machinery within normal course of business — (16) 96 (33) (Gain) Loss, net, on disposal (310) (16) 1,708 (33) Impairment of deposits — — 523 — Impairment expense and (gain) loss, net, on disposal of machinery $ (310) $ (16) $ 2,231 $ (33)

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Keary Global Ltd. ("Keary Global") owns 250,004 shares of the Company's common stock as of September 30, 2023, which Keary Global acquired upon exercise of two convertible notes during the third quarter of 2018. Keary Global and its affiliate, Keary International, are owned by one of the Company’s stockholders’ family member. In addition to being a stockholder, Keary Global and Keary International are inventory suppliers and purchasing agents for the Company overseas. The Company has entered into ongoing purchase and supply agreements with Keary Global. At September 30, 2023 and December 31, 2022, the Company has accounts payable due to Keary Global and Keary International of $2,555,000 and $4,940,000, respectively. Purchases for the three months ended September 30, 2023 and 2022 from this related party were $7,371,000 and $7,336,000, respectively. Purchases for the nine months ended September 30, 2023 and 2022 from this related party were $32,384,000 and $33,051,000, respectively. See Note 4 — Joint Venture for discussion on our share transfer agreement with Keary Global.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three months ended September 30, 2023 and 2022, the Company's income tax expense was $2,904,000 and $1,900,000, with effective tax rate of 24.1% and 23.6%, respectively. For the nine months ended September 30, 2023 and 2022, the Company's income tax expense was $9,045,000 and $6,323,000, with effective tax rate of 23.8% and 22.9%, respectively. For both the three and nine months ended September 30, 2023 and 2022, the Company's effective tax rate differed from the United States federal statutory rate of 21% primarily due to state taxes. In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. Based upon the level of historical taxable income, at this time, the Company determined that sufficient positive evidence existed to conclude that it is more likely than not there will be full utilization of the deferred tax assets in each jurisdiction. As such, as of September 30, 2023, based on the available evidence, the Company did not record any valuation allowance. The Company remains subject to the Internal Revenue Services ("IRS") examination for the 2019 through 2022 tax years, and has received notice in February 2019 that it is under examination for years 2016 and 2017. Additionally, the Company files multiple state and local income tax returns and remains subject to examination in various of these jurisdictions for the 2018 through 2021 tax years. As of September 30, 2023, and December 31, 2022, the Company did not have any unrecognized tax benefit. In August 2022, the Inflation Reduction Act of 2022 (the "Act") was signed into law. The Act, among other things, imposes a nondeductible 1% excise tax on the fair market value of certain stock that is "repurchased" during the taxable year by publicly traded U.S. corporations or acquired by certain of its subsidiaries. The taxable amount is reduced by the fair market value of certain issuances of stock throughout the year. The Act also imposes a 15% corporate minimum tax on the adjusted financial statement income of large corporations for taxable years beginning after December 31, 2022. We do not expect these tax law changes to have a material impact on our condensed consolidated financial statements; however, we will continue to evaluate their impact.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesThe Company is a party to, and certain of its property is the subject of, various pending claims and legal proceedings that routinely arise in the ordinary course of its business. Management believes that the outcome of such litigation and claims, should they arise in the future, is not likely to have a material effect on the Company’s financial position or results of income.

Secondary Offering

Secondary Offering	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
Secondary Offering	Secondary Offering On September 12, 2023, certain selling stockholders completed a secondary public offering of shares of the Company's common stock. The Company did not receive any of the proceeds from the sale of these shares by the selling stockholders. The Company incurred offering transaction costs of $453,000, which were recognized in general and administrative expense in the condensed consolidated statement of income .

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events In October 2023, the Company made tax payments totaling approximately $9,600,000 related to the current year quarterly estimate tax payments that were previously deferred under the Winter Storm Relief declared by the IRS. See Note 16 — Income Taxes for details on this tax relief. In October 2023, Global Wells made a pro rata distribution of approximately $3,956,000, net of all applicable withholding taxes, to its four members. In October 2023, the Company received deposit refund of $1,272,000 related to the cancellation of a machinery purchase. In October 2023, the Company signed an amended and restated lease agreement for a 98,000 square-foot distribution facility in Puyallup, Washington for a term of 64-months, which amended, restated and superseded the lease dated June 15, 2023. The lease term is expected to commence in November 2023 pending completion of certain landlord work or an earlier date as mutually agreed-upon between the Company and the landlord. Under the lease agreement, monthly base lease payments range from $94,000 to $115,000 after an initial rent abatement period. On November 6, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.20 per share on the Company's common stock, which will be paid on or around November 30, 2023 to shareholders of record at the close of business on November 20, 2023.

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income (loss)	$ 9,065	$ 6,096	$ 28,572	$ 19,107

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as promulgated in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. The financial information as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 is unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022, as included in the Company's Annual Report on Form 10-K filed on March 16, 2023.
Principles of Consolidation	Principles of Consolidation: The condensed consolidated financial statements include the accounts of Karat Packaging and its wholly-owned and controlled operating subsidiaries, Lollicup, Lollicup Franchising, LLC (“Lollicup Franchising”) and Global Wells, a variable interest entity wherein the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated.
Variable Interest Entities	Variable Interest Entities: In 2017, Lollicup along with three other unrelated parties formed Global Wells. Lollicup has a 13.5% ownership interest and a 25% voting interest in Global Wells, which is located in Rockwall, Texas. The purpose of this entity is to own, construct, and manage warehouses and manufacturing facilities. Global Wells’ operating agreement may require its members to make additional contributions upon the unanimous decision of the members or when the cash in Global Wells’ bank account falls below $50,000. In the event that a member is unable to make an additional capital contribution, the other members will be required to make contributions to offset the amount that member cannot contribute, up to $25,000. In 2018, Lollicup entered into an operating lease with Global Wells for a facility in Rockwall, Texas. Upon the execution of this lease, it was determined that Lollicup holds current and potential rights that give it the power to direct activities of Global Wells that most significantly impact Global Wells’ economic performance, receive significant benefits, or the obligation to absorb potentially significant losses, resulting in Lollicup having a controlling financial interest in Global Wells. As a result, Lollicup was deemed to be the primary beneficiary of Global Wells and has consolidated Global Wells under the risk and reward model of ASC Topic 810, Consolidations . Assets recognized as a result of consolidating Global Wells do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating Global Wells do not represent additional claims of the Company’s general assets; they represent claims against the specific assets of Global Wells. See Note 9 — Long-Term Debt
Noncontrolling Interests	Noncontrolling Interests: The Company consolidates its variable interest entity, Global Wells, in which the Company is the primary beneficiary. Noncontrolling interests represent third-party equity ownership interests in Global Wells. The Company recognizes noncontrolling interests as equity in the condensed consolidated financial statements separate from the Company’s stockholders’ equity. The amount of net income attributable to noncontrolling interests is disclosed in the condensed consolidated statements of income. Tax payments made by the Company on behalf of the noncontrolling interests are deducted from their equity balances, as shown in the condensed consolidated statements of stockholders’ equity.
Estimates and Assumptions	Estimates and Assumptions: Management uses estimates and assumptions in preparing financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ materially from the estimates that were assumed in preparing the condensed consolidated financial statements. Estimates that are significant to the condensed consolidated financial statements include stock-based compensation, allowance for doubtful accounts and reserve for slow-moving and obsolete inventory.
Reporting Segments	Reporting Segments: The Company manages and evaluates its operations in one reportable segment. This segment consists of manufacturing and supply of a broad portfolio of single-use products that are used to serve food and beverages and are available in plastic, paper, foam, post-consumer recycled content and renewable materials. It also consists of the distribution of certain specialty food and beverage products, such as boba and coffee drinks, and certain restaurant and warehouse supplies. The Company’s long-lived assets are all located in the United States, and its revenues are all generated in the United States.
Fair Value Measurements	Fair Value Measurements: The Company has financial instruments classified within the fair value hierarchy, which consist of the following: • At September 30, 2023, the Company had money market accounts and short-term investments classified as Level 1 within the fair value hierarchy. The short-term investments comprise of certificates of deposits with an original maturity of longer than 90 days and are reported at their carrying value as current assets on the condensed consolidated balance sheet. The carrying value of these short-term investments approximates fair value as they were purchased near or on September 30, 2023. At December 31, 2022, the Company had money market accounts classified as Level 1 within the fair value hierarchy, and reported as current assets on the condensed consolidated balance sheet.
New and Recently Adopted Accounting Standards	New and Recently Adopted Accounting Standards: The Company is an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and as such, the Company have elected to take advantage of certain reduced public company reporting requirements. In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards, as a result, the Company will adopt new or revised accounting standards on the relevant dates in which adoption of such standards is required for private companies. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" , which adds to US GAAP an impairment model known as the current expected credit loss ("CECL") model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The ASU is also intended to reduce the complexity of US GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. The FASB subsequently issued ASU 2019-10 (Topic 326), “ Financial Instruments-Credit Losses: Effective Dates ” which amends the effective date for SEC filers that are eligible to be ‘smaller reporting companies’, non-SEC filers and all other companies, including not-for-profit companies and employee benefit plans. The Company adopted this new standard using the modified retrospective adoption method beginning with its first quarter in 2023. The application of this new standard did not have a material impact on its consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Schedule of Fair Value Measurements by Level for the Assets and Liabilities Measured at Fair Value on a Recurring Basis	The following table summarizes the Company’s fair value measurements by level at September 30, 2023: Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 19,024 $ — $ — Short-term investments 18,063 — — Fair value, September 30, 2023 $ 37,087 $ — $ — The following table summarize the Company’s fair value measurements by level at December 31, 2022: Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 10,609 $ — $ — Fair value, December 31, 2022 $ 10,609 $ — $ —
Schedule of Carrying Values and Estimated Fair Values of Debt	The following is a summary of the carrying amount and estimated fair value of the $23,000,000 and $28,700,000 term loans that mature in September 2026 and July 2027, respectively (the "2026 Term Loan" and "2027 Term Loan," respectively): September 30, 2023 Carrying Amount Estimated Fair Value (in thousands) 2026 Term Loan $ 21,640 $ 19,496 2027 Term Loan 28,139 27,090 $ 49,779 $ 46,586 December 31, 2022 Carrying Amount Estimated Fair Value (in thousands) 2026 Term Loan $ 22,079 $ 20,115 2027 Term Loan 20,436 18,918 $ 42,515 $ 39,033

Goodwill (Tables)

Goodwill (Tables)	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	The following table summarizes the activity in the Company's goodwill from December 31, 2022 to September 30, 2023: (in thousands) Balance at December 31, 2022 $ 3,510 Goodwill acquired — Balance at September 30, 2023 $ 3,510

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consist of the following: September 30, 2023 December 31, 2022 (in thousands) Raw materials $ 9,427 $ 18,061 Semi-finished goods 2,413 1,850 Finished goods 60,539 52,044 Subtotal 72,379 71,955 Less inventory reserve (722) (749) Total inventories $ 71,657 $ 71,206

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, Net	September 30, 2023 December 31, 2022 (in thousands) Machinery and equipment $ 70,150 $ 70,234 Leasehold improvements 19,070 19,063 Vehicles 7,480 6,725 Furniture and fixtures 1,141 1,016 Building 38,505 36,599 Land 11,907 11,907 Computer hardware and software 593 593 148,846 146,137 Less: accumulated depreciation and amortization (52,156) (50,569) Total property and equipment, net $ 96,690 $ 95,568

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2023
Payables and Accruals [Abstract]
Schedule of Accrued Expense Liabilities	The following table summarizes information related to accrued expense liabilities: September 30, 2023 December 31, 2022 (in thousands) Accrued miscellaneous expenses $ 2,368 $ 1,646 Accrued interest 73 108 Accrued payroll 1,180 1,586 Accrued vacation and sick pay 834 543 Accrued shipping expenses 1,478 1,918 Accrued professional services fees 499 600 Accrued property tax 876 1,164 Accrued sale taxes and use taxes 1,021 992 Accrued sales discount 529 448 Total accrued expenses $ 8,858 $ 9,005

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Schedule of Long-Term Debt	Long-term debt consists of the following: September 30, 2023 December 31, 2022 (in thousands) The 2026 Term Loan, with an initial balance of $16,115,000 and an option to request for additional advances up to a maximum of $6,885,000 through September 2022, which the Company exercised in February 2022. Interest accrues at a fixed rate of 3.5% per annum. Principal and interest payments of $116,000 are due monthly throughout the term of the loan, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by Global Wells and one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt service coverage ratio. $ 21,711 $ 22,168 The 2027 Term Loan, with an initial balance of $20,700,000 and an option to request for additional advances up to a maximum of $8,000,000 through June 30, 2023, which the Company exercised in March 2023. Interest accrues at a fixed rate of 4.375% per annum. Prior to August 1, 2023, principal and interest payments of $104,000 are due monthly. Beginning August 1, 2023, monthly principal and interest payments increased to $144,000 for the remainder of the loan term, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt coverage ratio. $ 28,287 $ 20,563 Long-term debt 49,998 42,731 Less: unamortized loan fees (219) (216) Less: current portion (1,111) (957) Long-term debt, net of current portion $ 48,668 $ 41,558
Schedule of Future Maturities	At September 30, 2023, future maturities are: (in thousands) 2023 (remainder) $ 277 2024 1,122 2025 1,179 2026 20,798 2027 26,622 $ 49,998

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of Stock Option Activity	A summary of the Company’s stock option activity under the Plan for the period ended September 30, 2023 is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contract Life (In Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2022 420,000 $ 18.6 8.8 $ — Exercised (5,800) $ 17.7 Forfeited (10,000) $ 18.9 Outstanding at September 30, 2023 404,200 $ 18.6 8.1 $ 1,807 Vested and expected to vest at September 30, 2023 404,200 $ 18.6 8.1 $ 1,807 Exercisable at September 30, 2023 130,867 $ 18.6 8.1 $ 581
Schedule of Unvested Restricted Stock Unit Activity	The Company issued restricted stock units to its employees. The following table summarizes the unvested restricted stock units for the nine months ended September 30, 2023: Number of Shares Outstanding Weighted Average Grant Date Fair Value Unvested at December 31, 2022 82,146 11.47 Vested (4,550) 16.64 Forfeited (1,667) 10.00 Unvested at September 30, 2023 75,929 11.19

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Schedule of Earnings Per Share	Basic earnings per share is calculated by dividing the net income attributable to equity holders of the Company for the period by the weighted average number of common shares outstanding during the period. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except per share data) Net income attributable to Karat Packaging Inc. $9,065 $6,096 $28,572 $19,107 Weighted average number of common shares in issue 19,891 19,809 19,888 19,809 Basic earnings per share $ 0.46 $ 0.31 $ 1.44 $ 0.96 The following table summarizes the calculation of diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except per share data) Net income attributable to Karat Packaging Inc. $ 9,065 $ 6,096 $ 28,572 $ 19,107 Weighted average number of common shares in issue 19,891 19,809 19,888 19,809 Dilutive shares Stock options and restricted stock units 104 129 75 113 Adjusted weighted average number of common shares 19,995 19,938 19,963 19,922 Diluted earnings per share $ 0.45 $ 0.31 $ 1.43 $ 0.96

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2023
Leases [Abstract]
Schedule of Lease Cost	The Company recognized the following lease costs in the accompanying condensed consolidated statement of income: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Operating lease expense $ 1,606 $ 1,336 $ 4,454 $ 3,256 Short-term lease expense 106 4 143 14 Variable lease expense 260 212 750 501 Total lease expense $ 1,972 $ 1,552 $ 5,347 $ 3,771
Schedule of Supplemental Information Related to Operating Leases	The following table presents supplemental information related to operating leases: September 30, 2023 December 31, 2022 Weighted average remaining lease term 4.41 years 4.27 years Weighted average discount rate 5.8 % 5.3 % Nine Months Ended September 30, 2023 2022 (in thousands) Cash paid for amounts included in measurement of lease obligations: Operating cash flows from operating leases $ 4,129 $ 3,120
Schedule of Future Lease Payments Under Operating Leases	As of September 30, 2023, future lease payments under operating leases were as follows: (in thousands) 2023 (remainder) $ 1,544 2024 5,254 2025 3,928 2026 4,044 2027 2,711 Thereafter 2,885 Total future lease payments 20,366 Less: imputed interest 2,573 Total lease liability balance $ 17,793

Impairment Expense and (Gain)_2

Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery and Equipment (Tables)	9 Months Ended
	Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]
Schedule of Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery	The Company recognized the following amounts related to impairment expense and (gain) loss, net, on disposal of machinery: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) (Gain) loss, net, on disposal of machinery in scaling back manufacturing $ (310) $ — $ 1,612 $ — (Gain) loss, net, on disposal of machinery within normal course of business — (16) 96 (33) (Gain) Loss, net, on disposal (310) (16) 1,708 (33) Impairment of deposits — — 523 — Impairment expense and (gain) loss, net, on disposal of machinery $ (310) $ (16) $ 2,231 $ (33)

Nature of Operations (Details)

Nature of Operations (Details)	9 Months Ended
	Sep. 30, 2023 distribution_center
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Distribution centers operated by entity	7

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Narrative (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) segment	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Reportable segment | segment	1
2026 Term Loan
Debt Instrument [Line Items]
Face amount of loan	$ 23,000,000
2027 Term Loan
Debt Instrument [Line Items]
Face amount of loan	$ 28,700,000
Global Wells
Debt Instrument [Line Items]
Ownership interest (as a percent)		13.50%
Voting interest (as a percent)		25%
Minimum bank account to make additional contributions from members		$ 50,000
Contributions to offset the amount that member cannot contribute (up to)		$ 25,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	$ 18,063	$ 0
Recurring basis | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	19,024	10,609
Short-term investments	18,063
Fair value	37,087	10,609
Recurring basis | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Short-term investments	0
Fair value	0	0
Recurring basis | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Short-term investments	0
Fair value	$ 0	$ 0

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Summary of Carrying Values and Estimated Fair Values of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Carrying Amount	$ 49,998	$ 42,731
Carrying Amount
Debt Instrument [Line Items]
Carrying Amount	49,779	42,515
Estimated Fair Value
Debt Instrument [Line Items]
Estimated Fair Value	46,586	39,033
2026 Term Loan
Debt Instrument [Line Items]
Carrying Amount	21,711	22,168
2026 Term Loan | Carrying Amount
Debt Instrument [Line Items]
Carrying Amount	21,640	22,079
2026 Term Loan | Estimated Fair Value
Debt Instrument [Line Items]
Estimated Fair Value	19,496	20,115
2027 Term Loan
Debt Instrument [Line Items]
Carrying Amount	28,287	20,563
2027 Term Loan | Carrying Amount
Debt Instrument [Line Items]
Carrying Amount	28,139	20,436
2027 Term Loan | Estimated Fair Value
Debt Instrument [Line Items]
Estimated Fair Value	$ 27,090	$ 18,918

Goodwill - Schedule of Goodwill

Goodwill - Schedule of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 3,510
Goodwill acquired	0
Goodwill, ending balance	$ 3,510

Joint Venture (Details)

Joint Venture (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2023	May 08, 2023	Apr. 06, 2022
Schedule of Equity Method Investments [Line Items]
Deposits paid for joint venture investment		$ 2,900		$ 4,000
Deposits refunded from joint venture investment		$ 6,900		$ 0
Bio Earth Technology
Schedule of Equity Method Investments [Line Items]
Deposits paid for joint venture investment	$ 2,900		$ 4,000
Deposits refunded from joint venture investment	$ 900
Bio Earth Technology | Lollicup Franchising, LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage by parent							49%
Bio Earth Technology | Lollicup Franchising, LLC
Schedule of Equity Method Investments [Line Items]
Committed capital to joint venture							$ 6,500
Keary Global
Schedule of Equity Method Investments [Line Items]
Noncontrolling interest in joint ventures					$ 6,100	$ 6,100
Noncontrolling interest in joint ventures, gross						$ 6,000
Keary Global | Bio Earth Technology
Schedule of Equity Method Investments [Line Items]
Ownership percentage by parent						5%

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 9,427	$ 18,061
Semi-finished goods	2,413	1,850
Finished goods	60,539	52,044
Subtotal	72,379	71,955
Less inventory reserve	(722)	(749)
Total inventories	$ 71,657	$ 71,206

Inventories - Narrative (Detail

Inventories - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Inventory [Line Items]
Write-off of inventory	$ 281,000	$ 0	$ 3,225,000	$ 0
Cost of Sales
Inventory [Line Items]
Raw materials			$ 1,710,000

Property and Equipment - Schedu

Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 148,846		$ 148,846		$ 146,137
Less: accumulated depreciation and amortization	(52,156)		(52,156)		(50,569)
Total property and equipment, net	96,690		96,690		95,568
Depreciation and amortization expense	2,701	$ 2,597	8,038	$ 7,732
Machinery and equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	70,150		70,150		70,234
Leasehold improvements
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	19,070		19,070		19,063
Vehicles
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	7,480		7,480		6,725
Furniture and fixtures
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	1,141		1,141		1,016
Building
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	38,505		38,505		36,599
Land
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	11,907		11,907		11,907
Computer hardware and software
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 593		$ 593		$ 593

Line of Credit (Details)

Line of Credit (Details) - USD ($)	Mar. 14, 2023	Sep. 30, 2023	Jun. 20, 2023	Jun. 19, 2023	Dec. 31, 2022	Feb. 23, 2018
SOFR
Line of Credit Facility [Line Items]
Interest rate	2.50%
Floor interest rate	1%
Line of credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 36,264,000				$ 40,000,000
Floor rate (as a percent)	3.25%
Long-term line of credit, noncurrent		0			$ 0
Line of credit | Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.25%
Standby letter of credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 5,000,000	$ 2,000,000
Long-term line of credit, noncurrent		$ 3,736,000			$ 1,070,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued miscellaneous expenses	$ 2,368	$ 1,646
Accrued interest	73	108
Accrued payroll	1,180	1,586
Accrued vacation and sick pay	834	543
Accrued shipping expenses	1,478	1,918
Accrued professional services fees	499	600
Accrued property tax	876	1,164
Accrued sale taxes and use taxes	1,021	992
Accrued sales discount	529	448
Total accrued expenses	$ 8,858	$ 9,005

Long-Term Debt - Schedule of Lo

Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands		7 Months Ended	9 Months Ended
	Aug. 01, 2023	Jul. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Carrying amount			$ 49,998	$ 42,731
Less: unamortized loan fees			(219)	(216)
Less: current portion			(1,111)	(957)
Long-term debt, net of current portion			48,668	41,558
2026 Term Loan
Debt Instrument [Line Items]
Carrying amount			21,711	22,168
Amount converted to term loan			16,115
Term loan, accordion feature			$ 6,885
Fixed interest rate (as a percent)			3.50%
Monthly principal and interest payments			$ 116
2027 Term Loan
Debt Instrument [Line Items]
Carrying amount			28,287	$ 20,563
Amount converted to term loan			20,700
Term loan, accordion feature			$ 8,000
Fixed interest rate (as a percent)			4.375%
Monthly principal and interest payments	$ 144	$ 104

Long-Term Debt - Schedule of Fu

Long-Term Debt - Schedule of Future Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Future maturities:
2023 (remainder)	$ 277
2024	1,122
2025	1,179
2026	20,798
2027	26,622
Long-term debt	$ 49,998	$ 42,731

Long-Term Debt - Narrative (Det

Long-Term Debt - Narrative (Details)	Jun. 30, 2022 USD ($)
Term Loan, Maturing May 2029
Debt Instrument [Line Items]
Face amount of loan	$ 21,580,000

Interest Rate Swap (Details)

Interest Rate Swap (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 13, 2019
Derivative [Line Items]
Proceeds from settlement of interest rate swap		$ 0	$ 825
Global Wells | Interest Rate Swap
Derivative [Line Items]
Term of contract (in years)	10 years
Proceeds from settlement of interest rate swap	$ 825
Notional value				$ 21,580
Fixed interest rate (as a percent)				5%
Derivative interest income (expense)			$ 2,159

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jan. 31, 2019
Stock-based Compensation
Shares reserved for issuance (in shares)	1,334,017		1,334,017		2,000,000
Stock-based compensation expense	$ 250	$ 598	$ 743	$ 1,774
Remaining stock-based compensation expense for unvested stock options	282		282
Remaining stock-based compensation expense for unvested restricted stock units	$ 39		$ 39
Restricted Stock Units (RSUs)
Stock-based Compensation
Vesting period (in years)			3 years
Cost not yet recognized, period for recognition (in years)			7 months 6 days
Share-based Payment Arrangement, Option
Stock-based Compensation
Vesting period (in years)			3 years
Cost not yet recognized, period for recognition (in years)			1 year
Maximum
Stock-based Compensation
Award term (in years)			10 years
Incentive Stock Optionee, Stock Ownership Greater than Ten Percent of Voting Power
Stock-based Compensation
Minimum exercise price to fair market value of common stock at the date of grant (as a percent)	110%		110%
Incentive Stock Optionee, Stock Ownership Greater than Ten Percent of Voting Power | Maximum
Stock-based Compensation
Award term (in years)			5 years

Stock-Based Compensation - Sche

Stock-Based Compensation - Schedule of Stock Options Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Number of Options
Outstanding at beginning of period (in shares) | shares	420,000
Exercised (in shares) | shares	(5,800)
Forfeited (in shares) | shares	(10,000)
Outstanding at end of period (in shares) | shares	404,200	420,000
Number of options, vested and expected to vest (in shares) | shares	404,200
Number of options, exercisable (in shares) | shares	130,867
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 18.6
Exercised (in dollars per share) | $ / shares	17.7
Forfeited (in dollars per share) | $ / shares	18.9
Outstanding at end of period (in dollars per share) | $ / shares	18.6	$ 18.6
Weighted average exercise price, vested and expected to vest (in dollars per share) | $ / shares	18.6
Weighted average exercise price, exercisable (in dollars per share) | $ / shares	$ 18.6
Stock Option Activity, Additional Disclosures
Weighted average remaining contract life, options outstanding	8 years 1 month 6 days	8 years 9 months 18 days
Weighted average remaining contract life, vested and expected to vest	8 years 1 month 6 days
Weighted average remaining contract life, exercisable	8 years 1 month 6 days
Aggregate intrinsic value, options outstanding | $	$ 1,807	$ 0
Aggregate intrinsic value, vested and expected to vest | $	1,807
Aggregate intrinsic value, exercisable | $	$ 581

Stock-Based Compensation - Sc_2

Stock-Based Compensation - Schedule of Unvested Restricted Stock Units (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Number of Shares Outstanding
Outstanding at beginning of period (in shares) | shares	82,146
Vested (in shares) | shares	(4,550)
Forfeited (in shares) | shares	(1,667)
Outstanding at end of period (in shares) | shares	75,929
Weighted Average Grant Date Fair Value
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 11.47
Vested (in dollars per share) | $ / shares	16.64
Forfeited (in dollars per share) | $ / shares	10
Outstanding at end of period (in dollars per share) | $ / shares	$ 11.19

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share Reconciliation [Abstract]
Net income attributable to Karat Packaging Inc.	$ 9,065	$ 6,096	$ 28,572	$ 19,107
Weighted average number of common shares in issue (in shares)	19,890,646	19,809,417	19,888,244	19,808,813
Basic earnings per share (in dollars per share)	$ 0.46	$ 0.31	$ 1.44	$ 0.96
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Net income attributable to Karat Packaging Inc.	$ 9,065	$ 6,096	$ 28,572	$ 19,107
Weighted average number of common shares in issue (in shares)	19,890,646	19,809,417	19,888,244	19,808,813
Dilutive shares
Stock options and restricted stock units (in shares)	104,000	129,000	75,000	113,000
Adjusted weighted average number of common shares (in shares)	19,994,648	19,938,042	19,962,999	19,922,047
Diluted earnings per share (in dollars per share)	$ 0.45	$ 0.31	$ 1.43	$ 0.96
Potentially dilutive shares excluded from diluted earnings per share calculation (in shares)	0	434,000	285,000	452,000

Leases - Schedule of Lease Cost

Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease expense	$ 1,606	$ 1,336	$ 4,454	$ 3,256
Short-term lease expense	106	4	143	14
Variable lease expense	260	212	750	501
Total lease expense	$ 1,972	$ 1,552	$ 5,347	$ 3,771

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 01, 2023	Sep. 09, 2020	Oct. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lessee, Lease, Description [Line Items]
Expected rental income, remainder of the year				$ 185		$ 185
Expected rental income in 2024				739		739
Expected rental income in 2025				616		616
Minimum | Subsequent Event
Lessee, Lease, Description [Line Items]
Lease expense			$ 94
Maximum | Subsequent Event
Lessee, Lease, Description [Line Items]
Lease expense			$ 115
Global Wells
Lessee, Lease, Description [Line Items]
Term of contract		38 months
Global Wells | Subsequent Event
Lessee, Lease, Description [Line Items]
Lease renewal term	2 years
Global Wells | Minimum
Lessee, Lease, Description [Line Items]
Monthly lease payment		$ 58
Global Wells | Minimum | Subsequent Event
Lessee, Lease, Description [Line Items]
Monthly lease payment	$ 62
Global Wells | Maximum
Lessee, Lease, Description [Line Items]
Monthly lease payment		$ 61
Global Wells | Maximum | Subsequent Event
Lessee, Lease, Description [Line Items]
Monthly lease payment	$ 65
Operating Expense
Lessee, Lease, Description [Line Items]
Lease expense				1,653	$ 1,260	4,542	$ 2,974
Cost of Sales
Lessee, Lease, Description [Line Items]
Lease expense				$ 319	$ 292	$ 805	$ 797

Leases - Schedule of Supplement

Leases - Schedule of Supplemental Information Related to Operating Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Leases [Abstract]
Weighted average remaining lease term (in years)	4 years 4 months 28 days		4 years 3 months 7 days
Weighted average discount rate	5.80%		5.30%
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases	$ 4,129	$ 3,120

Leases - Schedule of Maturities

Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
2023 (remainder)	$ 1,544
2024	5,254
2025	3,928
2026	4,044
2027	2,711
Thereafter	2,885
Total future lease payments	20,366
Less: imputed interest	2,573
Total lease liability balance	$ 17,793

Impairment Expense and (Gain)_3

Impairment Expense and (Gain) Loss, Net, on Disposal of Machinery and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]
(Gain) loss, net, on disposal of machinery in scaling back manufacturing	$ (310)	$ 0	$ 1,612	$ 0
(Gain) loss, net, on disposal of machinery within normal course of business	0	(16)	96	(33)
(Gain) Loss, net, on disposal	(310)	(16)	1,708	(33)
Impairment of deposits	0	0	523	0
Impairment expense and (gain) loss, net, on disposal of machinery	$ (310)	$ (16)	$ 2,231	$ (33)

Related Party Transactions (Det

Related Party Transactions (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2018 convertible_note	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) shares
Related Party Transaction [Line Items]
Common stock, shares outstanding (in shares) | shares	19,893,839			19,893,839		19,885,005
Number of exercised convertible notes | convertible_note			2
Keary Global | Affiliated Entity
Related Party Transaction [Line Items]
Common stock, shares outstanding (in shares) | shares	250,004			250,004
Keary Global and Keary International
Related Party Transaction [Line Items]
Purchases from related party | $	$ 7,371	$ 7,336		$ 32,384	$ 33,051
Keary Global and Keary International | Affiliated Entity
Related Party Transaction [Line Items]
Accounts payable | $	$ 2,555			$ 2,555		$ 4,940

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 2,904,000	$ 1,900,000	$ 9,045,000	$ 6,323,000
Effective tax rate	24.10%	23.60%	23.80%	22.90%
Deferred tax assets, valuation allowance	$ 0		$ 0
Uncertain tax positions	$ 0		$ 0		$ 0

Secondary Offering (Details)

Secondary Offering (Details) $ in Thousands	Sep. 12, 2023 USD ($)
Equity [Abstract]
Offering transaction costs	$ 453

Subsequent Events (Details)

Subsequent Events (Details) $ / shares in Units, ft² in Thousands, $ in Thousands	1 Months Ended	9 Months Ended
	Oct. 31, 2023 USD ($) ft²	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Nov. 30, 2023 $ / shares
Subsequent Event [Line Items]
Cash paid for income tax		$ 309	$ 7,069
Subsequent Event
Subsequent Event [Line Items]
Cash paid for income tax	$ 9,600
Refund received from machinery and equipment deposit	$ 1,272
Area of distribution facility | ft²	98
Lease term	64 months
Ordinary share per dividend (in dollars per share) | $ / shares				$ 0.20
Subsequent Event | Minimum
Subsequent Event [Line Items]
Lease expense	$ 94
Subsequent Event | Maximum
Subsequent Event [Line Items]
Lease expense	115
Subsequent Event | Global Wells
Subsequent Event [Line Items]
Pro rata distribution	$ 3,956