— Strong Top-Line Growth and Solid Profitability —
First Quarter 2026 Highlights
- Net sales of
$116.9 million , up 12.9 percent, from$103.6 million in the prior-year quarter. - Gross profit of
$41.5 million , up 1.9 percent, from$40.8 million in the prior-year quarter. - Gross margin of 35.5 percent, reflecting an expected decrease from 39.3 percent in the prior-year quarter due to elevated tariffs.
- Net income of
$7.1 million , up 4.8 percent, from$6.8 million in the prior-year quarter. - Net income margin of 6.1 percent versus 6.6 percent in the prior-year quarter.
- Adjusted EBITDA of
$12.5 million versus$11.9 million in the prior-year quarter. - Adjusted EBITDA margin of 10.7 percent versus 11.5 percent in the prior-year quarter.
Guidance
- Net sales for the 2026 second quarter expected to increase by 8 to 10 percent from the prior-year quarter.
- Gross margin for the 2026 second quarter expected to be within 35 to 37 percent, excluding potential tariff refund impact under the current trade policy.
- Adjusted EBITDA margin for the 2026 second quarter expected to be within 11 to 13 percent, excluding potential tariff refund impact under the current trade policy.
- Net sales for full-year 2026 expected to increase by low double-digits from the prior year.
- Gross margin for full-year 2026 expected to be within 34 to 36 percent, excluding potential tariff refund impact under the current trade policy.
- Adjusted EBITDA margin for full-year 2026 expected to be within 11 to 13 percent, excluding potential tariff refund impact under the current trade policy.
“We started 2026 with a robust quarter, with year-over-year sales increasing almost 13 percent as momentum built throughout the quarter, accelerating from weather-impacted modest progress in January to growth exceeding 20 percent in March,” said
“Given the sharp increase in oil prices and its impact on our product costs, we will implement price increases on select plastic items beginning in mid-May. While certain sourced product costs are rising, we expect tariff savings under current trade policy to start reducing our cost of goods sold in
“Our new paper bag product category continues to expand steadily, driving a year-over-year increase in eco-friendly product sales of 16.9 percent in the first quarter. We have also successfully closed another national chain account to supply paper bags, further strengthening our leadership in sustainable packaging solutions,” Yu added.
First Quarter 2026 Financial Results
Net sales for the 2026 first quarter increased 12.9 percent to
Cost of goods sold for the 2026 first quarter increased 20.0 percent to
Gross profit for the 2026 first quarter increased to
Operating expenses for the 2026 first quarter increased to
Net income for the 2026 first quarter increased 4.8 percent to
Net income attributable to
Adjusted EBITDA, a non-GAAP measure defined below, was
Adjusted diluted earnings per common share, a non-GAAP measure defined below, was
Dividend
On
Investor Conference Call
The Company will host an investor conference call today,
Phone: (800) 715-9871 (domestic); (646) 307-1963 (international)
Conference ID:
Webcast: Accessible at https://irkarat.com/events-presentations/; archive available for approximately one year
About
Caution Concerning Forward-Looking Statements
Statements made in this release that are not statements of historical or current facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements, including, but not limited to, achieving our financial guidance, are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including the risks discussed under the caption “Item 1A. Risk Factors” in Part I of our most recent Annual Report on Form 10-K and any updates discussed under the caption “Item 1A. Risk Factors” in Part II of our Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after the date of this release, except as required by law.
Investor Relations and Media Contacts:
310-279-5980
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share and per share data)
| Three Months Ended | |||||||
| 2026 | 2025 | ||||||
| Net sales | $ | 116,947 | $ | 103,624 | |||
| Cost of goods sold | 75,421 | 62,862 | |||||
| Gross profit | 41,526 | 40,762 | |||||
| Operating expenses | |||||||
| Selling expenses | 12,936 | 14,411 | |||||
| General and administrative expenses (including | 20,126 | 18,548 | |||||
| Gain, net, on disposal of property | — | (17 | ) | ||||
| Total operating expenses | 33,062 | 32,942 | |||||
| Operating income | 8,464 | 7,820 | |||||
| Other income (expenses) | |||||||
| Rental income (including | 698 | 776 | |||||
| Other income, net (including | 91 | 44 | |||||
| Gain on foreign currency transactions | 252 | 239 | |||||
| Interest income (including | 286 | 566 | |||||
| Interest expense (including ( | (409 | ) | (509 | ) | |||
| Total other income, net | 918 | 1,116 | |||||
| Income before provision for income taxes | 9,382 | 8,936 | |||||
| Provision for income taxes | 2,241 | 2,121 | |||||
| Net income | 7,141 | 6,815 | |||||
| Net income attributable to noncontrolling interest | 400 | 406 | |||||
| Net income attributable to | $ | 6,741 | $ | 6,409 | |||
| Basic and diluted earnings per share: | |||||||
| Basic | $ | 0.34 | $ | 0.32 | |||
| Diluted | $ | 0.34 | $ | 0.32 | |||
| Weighted average common shares outstanding, basic | 19,963,224 | 20,036,505 | |||||
| Weighted average common shares outstanding, diluted | 20,073,479 | 20,198,654 | |||||
NET SALES BY CATEGORY (UNAUDITED)
(In thousands)
| Three Months Ended | |||||
| 2026 | 2025 | ||||
| Chains and distributors * | $ | 92,879 | $ | 80,670 | |
| Online | 19,525 | 17,791 | |||
| Retail * | 4,543 | 5,163 | |||
| $ | 116,947 | $ | 103,624 | ||
* The Company reclassified one customer from the retail to the chains and distributors channel, and recast the corresponding net sales amounts of
SELECTED BALANCE SHEET AND CASH FLOW INFORMATION
(In thousands)
| Selected Balance Sheet Information: | |||||
| (Unaudited) | |||||
| Cash and cash equivalents | $ | 28,680 | $ | 37,880 | |
| Short-term investments | $ | 5,744 | $ | — | |
| Accounts receivable, net of allowance for bad debt | $ | 42,270 | $ | 36,402 | |
| Inventories | $ | 80,009 | $ | 81,682 | |
| Total assets | $ | 282,682 | $ | 287,686 | |
| Accounts payable | $ | 24,282 | $ | 26,323 | |
| Total current liabilities | $ | 70,351 | $ | 70,220 | |
| Total liabilities | $ | 127,509 | $ | 130,816 | |
| Total stockholders’ equity | $ | 155,173 | $ | 156,870 | |
| Selected Cash Flow Information: | Three Months Ended | ||||||
| 2026 | 2025 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Net cash provided by operating activities | $ | 7,191 | $ | 7,726 | |||
| Net cash (used in) provided by investing activities | $ | (6,884 | ) | $ | 3,533 | ||
| Dividends paid to shareholders | $ | (8,983 | ) | $ | (9,017 | ) | |
| Net cash used in financing activities | $ | (9,507 | ) | $ | (10,370 | ) | |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(In thousands, except percentages and per share amounts)
| Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin: | Three Months Ended | ||||||||||||
| 2026 | 2025 | ||||||||||||
| Amounts | % of | Amounts | % of | ||||||||||
| Net income: | $ | 7,141 | 6.1 | % | $ | 6,815 | 6.6 | % | |||||
| Add (deduct): | |||||||||||||
| Interest income | (286 | ) | (0.2 | ) | (566 | ) | (0.5 | ) | |||||
| Interest expense | 409 | 0.3 | 509 | 0.5 | |||||||||
| Provision for income taxes | 2,241 | 1.9 | 2,121 | 2.0 | |||||||||
| Depreciation and amortization | 2,741 | 2.4 | 2,688 | 2.6 | |||||||||
| Stock-based compensation expense | 242 | 0.2 | 346 | 0.3 | |||||||||
| Adjusted EBITDA | $ | 12,488 | 10.7 | % | $ | 11,913 | 11.5 | % | |||||
| Reconciliation of Adjusted EBITDA by Entity: | Three Months Ended | ||||||||||||||
| Global Wells | Eliminations | Consolidated | |||||||||||||
| Net income (loss) | $ | 6,741 | $ | 471 | $ | (71 | ) | $ | 7,141 | ||||||
| Add (deduct): | |||||||||||||||
| Interest income | (284 | ) | (2 | ) | — | (286 | ) | ||||||||
| Interest expense | 29 | 380 | — | 409 | |||||||||||
| Provision for income taxes | 2,241 | — | — | 2,241 | |||||||||||
| Depreciation and amortization | 2,438 | 303 | — | 2,741 | |||||||||||
| Stock-based compensation expense | 242 | — | — | 242 | |||||||||||
| Adjusted EBITDA | $ | 11,407 | $ | 1,152 | $ | (71 | ) | $ | 12,488 | ||||||
| Reconciliation of Adjusted EBITDA by Entity: | Three Months Ended | ||||||||||||||
| Global Wells | Eliminations | Consolidated | |||||||||||||
| Net income (loss) | $ | 6,409 | $ | 478 | $ | (72 | ) | $ | 6,815 | ||||||
| Add (deduct): | |||||||||||||||
| Interest income | (339 | ) | (227 | ) | — | (566 | ) | ||||||||
| Interest expense | 9 | 500 | — | 509 | |||||||||||
| Provision for income taxes | 2,121 | — | — | 2,121 | |||||||||||
| Depreciation and amortization | 2,385 | 303 | — | 2,688 | |||||||||||
| Stock-based compensation expense | 346 | — | — | 346 | |||||||||||
| Adjusted EBITDA | $ | 10,931 | $ | 1,054 | $ | (72 | ) | $ | 11,913 | ||||||
| Reconciliation of Adjusted Diluted Earnings Per Common Share: | Three Months Ended | |||||
| 2026 | 2025 | |||||
| Diluted earnings per common share: | $ | 0.34 | $ | 0.32 | ||
| Add (deduct): | ||||||
| Stock-based compensation expense | 0.01 | 0.01 | ||||
| Tax impact | (0.01 | ) | — | |||
| Adjusted diluted earnings per common share | $ | 0.34 | $ | 0.33 | ||
| Reconciliation of Free Cash Flow: | Three Months Ended | ||||||
| 2026 | 2025 | ||||||
| Cash from operating activities | $ | 7,191 | $ | 7,726 | |||
| Deduct: | |||||||
| Purchase of property and equipment | (565 | ) | (107 | ) | |||
| Deposits paid for property and equipment | (333 | ) | (989 | ) | |||
| Free Cash Flow | $ | 6,293 | $ | 6,630 | |||
Use of Non-GAAP Financial Measures
- Adjusted EBITDA is a financial measure calculated as net income excluding (i) interest income, (ii) interest expense, (iii) provision for income taxes, (iv) depreciation and amortization, and (v) stock-based compensation expense.
- Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by net sales.
- Adjusted diluted earnings per common share is calculated as diluted earnings per common share, plus the per share impact of stock-based compensation and adjusted for the related tax effects of these adjustments.
- Free Cash Flow is calculated as cash from operating activities less cash used in (i) purchases of property and equipment, and (ii) deposits paid for property and equipment.
We believe the above-mentioned non-GAAP measures, which are used by management to assess the core performance of
With respect to our financial targets for the 2026 second quarter and 2026 full year adjusted EBITDA margin, a reconciliation of these non-GAAP measures to the corresponding GAAP measures is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from these non-GAAP target measures. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statements of income and cash flows prepared in accordance with GAAP, that would be required to produce such a reconciliation.
