All right. Why don't we get started? Good morning. This is the Karat Packaging presentation. I'm Ryan Merkel. I cover building products and packaging and distribution at William Blair. Before we begin, I need to remind you that a complete list of disclosures and conflicts of interest is available on our website. With us today is Alan Yu, Chairman and CEO, and Jian Guo, CFO. For background, Karat is a fast-growing manufacturer and distributor of eco-friendly, single-use, disposable food service products. Key products include food packaging, containers, cups, and straws. We have confidence that industry tailwinds and company initiatives will allow Karat to drive double-digit top line and mid-teens EBITDA growth long term. Let me turn it over to Alan. Thank you, Ryan. Good morning, everyone. Welcome to Karat Packaging presentation. First of all, I'd like to say that most of you have used our Karat Packaging product in your daily life. If you go to fast casual chains or restaurants such as Chili's, Applebee's, Chipotle, Panda Express, Wetzel's Pretzels, Dutch Bros, you'll very likely see our product throughout the U.S., even on the island of Hawaii. We do have a great presence in the island of Hawaii, where sustainable product are being used. Those are compostable utensils and cups. We actually service a majority of the chains on the island. Okay. One other thing about Karat Packaging is we're a one-stop shop. What I mean a one-stop shop is that we would be able to supply a restaurant with, I would say, almost all the items, except for equipments, that they use for packaging. Some of the restaurants, we service them with popping pearls, syrup product, such as Monin, DaVinci 1883, as well as Torani syrups. Basically, if a customer has a need, we would be able to source it for them and carry them and supply them, as well as online. We basically want to go through their revenues in the past years. Karat has been growing revenues, both top line and bottom. For example, right now, 2025, our revenue was $467 million, and we grew not only our revenue, we grew our net profit as well as our gross margin. This year, I would say that Karat Packaging will be expected to grow over $500 million this year. Some of the investment highlights that we have is that we offer a diverse range of product. The latest addition to our product line is paper product, paper bag. We have extensive categories, a supply chain of paper product, handle sack bag. We've been adding additional paper bag product to our Karat Packaging, as well as bag for bakery items. These are item we're looking to add additional 100 SKUs this year, just on paper bag item. Okay? Aluminum product, as well as the cup carrier, and also the different type of drink packaging. Now, eco-friendly line. Karat started with the eco-friendly line back in 2007, when most of the companies are still using Styrofoam. We were one of the first company to pioneer and brought into the U.S. the compostable line of PLA lined paper cold cup, PLA lined paper hot cup, plastic cup, as well as utensils. This year, we've added more compostable product to our categories offering. On our customer base, we service hundreds of large chains, mid-size chains throughout the U.S. They could be from a company in Texas, a P. Terry's or an In-N-Out Burger, or a company out in Tennessee or Southeast, Dutch Bros or 7 Brew, or other restaurants such as Chili's, Panda Express, and the list goes on. Okay. We are continuing to growing our client base, as this year we are looking to add additional 10 - 20 national chain accounts to our customer base. Okay. Karat. We currently have 10 warehouses, of which three of them manufacture domestically throughout the U.S. We have over 75 trucks that we operate on our own, and we're adding additional 10 - 20 trucks this year to service our customer. One of the key thing to success for Karat is that we can not only source product from overseas, we can also deliver it. The last mile, we can also do it ourself in certain categories, certain areas, certain cities. If not, we have third party, we have partner carriers that help us do the delivery. Okay? We sell through not only online, we also sell through distribution. We also sell through ourself direct in this offering here. You can see that Karat has been moving away the manufacturing from U.S. into outsourcing overseas. Our factory sales numbers this year is down to, and last year, is down to 9% of our sales, whereas it was 25% five years ago. This year, we see that this number will continue to fall down, drop lower as we scale down our manufacturing domestically. If needed, we can scale up. For example, right now we have a shortage in terms of cup and other containers. We increased our capacity just this past two months. Okay? We're able to be nimble and flexible in terms of grow or expand or descaling back on our manufacturing. Distribution. One of the things about distribution, sourcing, the key part of our success is sourcing. We have over 150 partner vendors overseas, all spread throughout the Southeast Asia, South Asia. Recently, we added Latin America into our sourcing partners. We source from Taiwan, China, Vietnam, Malaysia, Indonesia, Korea, Thailand, and now also Mexico and Latin America. Why? Due to the complex tariff issues as well as the supply chain disruption issues, we want to mitigate our dependency on one area. For example, if we have a product such as cups, we would be sourcing it from Taiwan, China, Latin America, and also Indonesia. Not just one part of the world. Just to prevent in case there's a political geographic turmoil or disruption in that country, so we can quickly shift our purchasing to another country. Supply chain. That's what I mentioned earlier, that this is a key part of our success is having a diverse supply chain sourcing. Especially nowadays, whereas tariff can be high in one region and lower in the other region. Recently there might be a shift into China due to a favorable tariff. Compared to our peer group, we seem to grow not only in terms of volume, revenue-wise, also volume. Our growth rate, revenue growth rate, this year we're looking at double-digit revenue growth versus last year, mid-single digit growth last year. Okay? Our peer group seem to be growing single digit. Also some of the peer group competitors are growing negatively. Now, our gross profit margin. Okay. Last year, we saw gross margin to be around 35%-36% range, the prior year was 38%-39% range. We do see that this year in 2026, our gross margin should be higher, back to normal, where we used to be. It's moving up and down based on the cost, ocean freight, and also tariffs. There's a lot of issues that may change the gross margin. Our goal is still growing in our gross margin compared to last year. Volume. One thing to notice is our volume has increased. Not only our revenue increased, our gross margins increased, our sales volume per case has also increased. This year, we're looking at double-digit growth in terms of sales volume. On the financial highlights, maybe I can have Jian to go over the financial highlight with all of you in terms of sales, the profit and everything. Jian? Yeah, sure. Thank you, Alan. Good morning, everyone. Thank you, Alan. On these slides I think our numbers are pretty self-explanatory. I won't spend too much time to go through all these numbers. I think really the key message, just to reiterate what Alan's talking about, I think if you look at our financials, ever since we started being a public company, really the story is we started small, but we really outgrow. We are a disruptor in this industry. We really outgrow our competitors. This is a very kind of traditional consumer products industry, very mature. Most of our competitors are in a break-even kind of around zero or sometimes - 1% or -2% growth. Really with these numbers, we just wanted to showcase, this is just a highlight of our Q1 2026 performance, where we achieved more than double-digit revenue growth as well as really strong gross margin. Really strong. Much superior performance compared to a lot of our peers. The green is the next-. Green is forward. Green is forward. Four. Yeah. Sorry. This one, right? No. This is green. Okay. Thank you. This is a quick summary of our five-year history of some of the key metrics that we monitor. If you look at revenue, gross margin, adjusted EBITDA, and net income. Over the past few years, obviously, this is a highly dynamic industry, right? With the COVID, the supply chain issues, the tariff. As you can tell, within the last few years, we were able to continue this high growth mode and we've continued to achieve really strong adjusted EBITDA margin as well. This is a quick summary of our free cash flow and the return on capital. In terms of return on capital. We started providing on top of the growth in the stock itself, we also started providing dividend to our shareholders as another way of providing superior return to our investors. We're also reiterating our second quarter 2026, kind of the guidance as summarized here as well. This is a quick summary of our overall liquidity position. As you can tell, as a company, we don't have much leverage and we really build a very strong balance sheet. I'm not going to go over all the appendixes. We have this website posted on the conference as well as our IR deck. I think we're just going to leave the rest of the time for Q&A with Alan. Thank you. I did miss one of the highlight of the company, and I do want to share with everyone. One of the highlight that's driving our growth in the company is our online sales. Okay. We started a website, lollicupstore.com, in the year 2004, selling just boba tea supplies and also some of the syrups. Today, this year, we are expected to hit over $100 million in revenue just on online sales. Now, where do we sell online? We sell on amazon.com. We sell on lollicupstore.com, that's Shopify, operated by our own company. We sell through sysco.com. We sell through tiktok.com. We sell through Target. We're actually working with Target to have a product sell on target.com. We currently sell on walmart.com. Some of the key items that we're selling strong are the janitorial supplies and trash can linings on walmart.com. TikTok, we're selling some of the popping pearls and other Tea Zone supplies on TikTok, and some of the hot cups on TikTok. We're adding additional channels in terms of platforms to sell our product online. Okay? We're also looking to have our partners to add their product using our own platform as a platform for other businesses, partners, to sell their product on our platform. We can take commission on that as we grow our customer base. We do have a strong customer base in terms of people buying from our website. This year, like I said, our target is $100 million. Last year, our revenue from the online sales was approximately $72 million-$75 million. Not sure exactly how much it was. It was a range of $72 million-$75 million. This year, we're seeing a very significant growth from last year. Once we hit that $100 million, I think we can shoot another target of $140 million-$150 million next year as we expand our team online sales. The key to the online success is having warehouses, additional warehouse space. Having the last mile deliver, ship, and customer can order and receive within 48 hours of their ordering. That's something that we have been doing this year, and which help us to grow our online revenue. Last year, customer may order a product, may take over 72 hours or beyond. This year, we set a goal ourself, if a customer order on Amazon, the product will be shipped within 24 hours. That we tracked our delivery time is within two to three days, 48 hours-72 hours, from the time that customer order. That's a very key metric. One of the reasons we're adding new trucks for delivery is that metropolitan cities like L.A., Dallas, Houston, New York, metropolitan Chicago area, Washington, customer can order online, and we can deliver it within three to five days using our own truck. That also helps in terms of reducing the cost of shipping. One of the key components of a cost of a product, it's not just the product itself, it's logistics. Fuel cost has gone up in the past two months. This is something that every customer to look into in terms of saving. That's one of the things that Karat is not just a manufacturer, importer, sourcing. It is also a channel that we sell through online. Okay? Thank you. Ryan? Maybe I'll kick off just with a question on macro. What are you seeing from the consumer? How is restaurant traffic? We're seeing restaurant traffic have kind of increased in a single digit. Most of our chain account, even the best chain, I can't say the name, they're telling us that this year has been a challenging year, and they have slowed down in terms of adding store numbers as well as their restaurant visit has not grown over double digit. Single digit. These are some of the best chains that we are working with right now. Now for some of the not so well-known chains, they may have a negative per store sales. That's what we're seeing. Mom and pop shops are suffering the most. That's what I'm seeing. Maybe talk about inflation and you're seeing sort of the outlook for prices here. We're seeing inflation on the packaging and food side. We're seeing more inflation on the food side right now, the produce. One of the key part of the inflation that causing a similar pricing is the logistics. For an example, LTL carrier that we used to contract to ship a product from one pallet from California to Colorado, which used to be $250, now at $400. They've added additional fuel surcharge. Every company out there is adding a fuel surcharge, which is ridiculous. That is one of the thing that's pushing us into bringing more own truck to reduce that cost, minimize that cost. Of course, these extra additional fuel costs, surcharges, are adding to the product itself. Okay? This is where we see the major cost of inflation on that part. Of course, we heard that beef price has gone up. Those company, like one of our customer that does mainly chicken, they benefited because chicken price didn't go up as much as the beef. On the packaging side, this is what we see on the packaging. Every manufacturer in the U.S. have made an increase announcement of 5%-15%. It started in May. We also made an increase announcement of 5%-10% that started in May or as early as May 15. Some customer we pushed back to June 1st. We've seen at the same time the same manufacturer that made the announcement of price increase is doing another price increase in July. I do not know how customer will be taking that two increases within two month, but this is mainly caused by the oil cost, oil pricing has gone up, the resin prices. Anything that's related to plastic has gone up. The raw material price has gone up minimum of 40% in the past two month. I'll pause if there's anything from the audience, or otherwise I can keep going. All right. You mentioned your competitors. Can you talk a little bit about the tariffs? The what? The tariffs and how you're handling those? Well, currently tariff, it seems to had dropped mostly from 20% to 10%. We've been dealing with tariff the past 12 month, 13 month by moving product sourcing to different countries, and that's why we added Latin America, Mexico, due to the tariff policy that we have in place. Of course, when it was deemed illegal, we're waiting for the next, what is the next kind of a reason for additional new tariff. That was supposed to be starting in July. We'll see how we handle it. I guess nowadays these tariff has seemed to be an everyday business. It's kind of normal now having tariff. It's just that how do we adjust to it? I guess we're used to it now. Yeah. People are saying that there might be additional 15% or 20% tariff, but they might be rumors. It might just retract that rumors afterwards. We'll see how it goes, if it's there. Yeah. Are you seeing a difference in your input cost between when you had plastic versus compostable product? Strangely, there has not been an increase in the raw material for compostable product versus the plastic product. It's coming from different source, different material, I guess. This is what I was told. That's why there's the only kind of increase that people are adding as an excuse to raise prices is that they're seeing everyone else is raising prices, might as well raise prices. Of course, the real cost of increase, if any, will be logistic cost. Your shipping freight import cost increase, like the ocean freight increases, of course, you can pass on to the consumers. In the past years, they have been absorbed by the manufacturer and importer because it goes up and it comes down. There's always a peak season surcharge from the month of June to September. It kind of peak there, and then it falls backward to the normal price. That's kind of a normal business. I would say for the compostable product, if anyone's raising the prices as an excuse, because other people are doing it. Alan, on the last call, you talked about national accounts, a big pipeline. You guys get some that will convert this year. Just talk about why you're winning those accounts versus your competitors, and what does the conversion look like? Is it tracking to what you expected? We're seeing national accounts converting from right to left. One of the reason is that the supply chain disruption is causing it. Recently, you probably go to your favorite coffee house and found out that they don't have a four-cup carrier. There is a major shortage of four-cup carrier in the U.S. Well, if you are a national chain, if you have single source and all of a sudden that single source is telling you, "We can't give you anything for the next two month," or, "We have to allocate," definitely you'll be start looking for a secondary partners. We've always mentioned to all of our customers, chain accounts, you don't have to use us as a primary. We don't want to be a single source of any product either. You can use us as a secondary or third source to mitigate a potentially disruption in the supply chain. I think this has been the norm ever since COVID started, because back in 2022, there was a major supply shortage of everything out there in the market, and that's what caused most of the previous buyers to quit, resign, and all the new buyer, when they came aboard, they started changing their method of purchasing, and that benefited us. Talk about tariffs. I mean, it was already asked, but I'm interested in the impact to gross margins because I feel like that's one of the headwinds to the stock right now. Talk about why it hurts your margin and where we go from here. Well, 2025, the tariff really has an impact, negative impact on our gross margin. Of course, we all know that it was deemed illegal. As a company, we applied for the refund, and we have received the initial refund of that. That should have been added back to the 2025 gross margin because it was the money that we paid back in 2025, which impacted our share as well as our gross margin. With the refund coming back, that should help us. I don't think we want to go back to restate our financials, but our gross margin should've been better. That's why we're seeing 2026 as the tariff dropped from 20% to 10%. We initially didn't know that if this is going to be sticking for a fact or if there's going to be a change back, additional excuses or additional reason to raise it back to 20%, because the administration has threatened that even though it's deemed illegal, they will find other ways to impose additional new tariffs. We couldn't actually account for the 2026 gross margin, any positive impact or not. So far, we see a positive impact in the second quarter already as the tariff reduced starting in April. The second quarter, April, May, June, tariffs dropped from 20% to 10%, of course, it will have some favorable impact on our gross margin, which we did not discuss back a couple months ago during our earning conference call because it was not for certain. Right now, we're already into the end of the second quarter. So far, there has not been any changes to that tariff policy. Yes. Right here. Okay. Maybe talk about eco-friendly. You mentioned it in your presentation. What is driving the shift to eco-friendly? Is it just regulations and ESG by some of these big chains, or is there anything else? Well, in the past years, eco-friendly product has been driven by ESG requirement, government regulation, city and state regulation. I believe nowadays it's actually because more and more people are using ESG product, compostable product, the price has come down. In the past years, compostable product were more expensive than the regular paper and plastic product. We have taken the initiative to reduce the cost that we sell to our customer because our cost of purchasing has been reducing. We have been reducing as much as 25% from where we used to sell a year ago, and our volume has doubled, tripled in terms of numbers that we sell in certain category lines that we're pushing. Like for instance, if you go to Chipotle, there's a bowl, an oval bowl that is compostable. That kind of product, basically, we have made a price announcement last month in May of 10%-15% price reduction. That, we see that our volume has gone up since, online and offline. We're actually setting a price reduction across the board to support our customers, whereas all they've seen is negative news on the price increase side. We have taken the initiative of starting reducing the price, which we feel that once the price drop, the volume automatically goes up because Styrofoam is raising prices. People thought Styrofoam was cheap. No, it's getting more and more expensive to a point that why use Styrofoam? That's new. I didn't know that. Are your margins still at a premium on those eco-friendly versus--? That hasn't changed or-? It has not changed. Again, our cost has come down. We're passing through the cost saving to our consumer to drive additional growth in that category. I have not seen our competitor peer group doing so. In the market, we have been one of the first to do that right now. We just have two, three minutes left, Alan. Maybe we'll just end on online sales. You mentioned $100 million in 2026. Are those customers mostly the smaller customers that are self-serving, or do you also have your national accounts buy online as well? We're seeing customer buying trash can lining by the hundreds cases at a time. We used to sell online customers that would buy a single case, two cases. Now we're seeing people buying 20 cases, 40 cases, 60 cases. Some of these smaller chains, they have three stores. They're buying for self-distribution. That's what we're seeing. That's what we're seeing on that part, growth in that part. That's why our online revenue has been growing significantly in the past few months. I think this year, especially last year, we had our record sales online. Last month, not last year, last month. That's a higher margin channel. Yes, that's a very higher margin channel. That's why our gross margin has been higher compared to our peer group, because we have an online channel. All right. Thanks, Alan. Thank you. Appreciate it. Thank you, everyone. Thank you for attending.