Karat Packaging Reports Second Quarter 2026 Financial Results
Rhea-AI Summary
Karat Packaging (Nasdaq: KRT) reported record second-quarter 2026 net sales of $136.3 million, up 9.9% year over year, driven mainly by $13.1 million of volume and mix growth and 23.6% online sales growth. Cost of goods sold fell 21.0% to $59.1 million, primarily due to $25.8 million of International Emergency Economic Powers Act (IEEPA) tariff refunds, which also generated $0.9 million of interest income.
Including the refunds, gross profit rose to $77.2 million and gross margin to 56.6%. Net income increased to $29.6 million (21.8% margin), and adjusted EBITDA to $41.6 million (30.5% margin). For first-half 2026, net sales grew 11.3% to $253.2 million and net income reached $36.8 million. The board raised the quarterly dividend to $0.47 per share and the company repurchased 73,510 shares for about $2.0 million. Karat Packaging guided to low double-digit net sales growth for Q3 and full-year 2026, with Q3 gross margin of 35–37% and adjusted EBITDA margin of 9–11%, and full-year gross margin in the low-40% range and adjusted EBITDA margin around the mid-teens.
Positive
- Record Q2 2026 net sales $136.3M, up 9.9% YoY
- Q2 2026 net income $29.6M, up 168.3% YoY, 21.8% margin
- Q2 2026 adjusted EBITDA $41.6M vs. $17.7M prior-year quarter
- First-half 2026 net sales $253.2M, up 11.3% YoY
- Dividend raised to $0.47 per share, payable August 28, 2026
- Share repurchases 73,510 shares for ~$2.0M; $10.0M remaining authorization
Negative
- One-time IEEPA refunds $25.8M drove $20.2M of Q2 net income
- Import costs as % of sales rose to 11.1% in Q2 from 9.5%
- First-half 2026 import costs up to 12.4% of sales from 9.1%
- Operating expenses Q2 2026 increased to $39.6M from $32.6M
- Q3 2026 guidance adjusted EBITDA margin 9–11%, well below Q2 reported 30.5%
News Explained
Karat Packaging is still finalizing a lease for a 47,000-square-foot warehouse in Orlando, Florida, and expects the new distribution center to be operational in the third quarter of 2026 to support Southeast fulfillment and e-commerce.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | Q1 earnings | Negative | -7.7% | Margin pressure from higher import duties and tariffs accompanied quarterly results. |
| Mar 12 | Q4 earnings | Positive | +20.7% | Record quarterly and annual sales accompanied higher full-year net income. |
| Nov 06 | Q3 earnings | Negative | -6.3% | Tariff-related import costs coincided with lower gross margin and net income. |
| Aug 07 | Q2 earnings | Positive | -6.3% | Record sales, higher net income, and improved gross margin accompanied the release. |
| May 08 | Q1 earnings | Positive | +10.7% | Higher sales and net income accompanied continued quarterly growth and dividend declaration. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings history showed four aligned reactions and one divergence, with positive reported results not consistently producing positive market responses.
Key Terms
ieepa regulatory
adjusted ebitda financial
non-gaap measure financial
basis points financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
— Online Growth Fuels Record Sales and Solid Profitability —
CHINO, Calif., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (Nasdaq: KRT) ("Karat Packaging" or the "Company"), a specialty distributor and manufacturer of environmentally friendly, disposable foodservice products and related items, today announced financial results for its second quarter ended June 30, 2026.
Second Quarter 2026 Highlights
- Record quarterly net sales of
$136.3 million , up 9.9 percent, from$124.0 million in the prior-year quarter. - International Emergency Economic Powers Act ("IEEPA") tariff refunds reduced costs of goods sold by
$25.8 million , reversing IEEPA tariff costs absorbed in prior periods, and increased other income, net by$0.9 million , from interest received related to the refunds. - Gross profit of
$77.2 million , including contribution of$25.8 million from the IEEPA tariff refunds, up 57.1 percent, from$49.1 million in the prior-year quarter. - Gross margin of 56.6 percent, including contribution of 1,890 basis points from the IEEPA tariff refunds, compared with 39.6 percent in the prior-year quarter.
- Net income of
$29.6 million , including contribution of$20.2 million from the IEEPA tariff refunds, up 168.3 percent, from$11.1 million in the prior-year quarter. - Net income margin of 21.8 percent, including contribution of 1,480 basis points from the IEEPA tariff refunds, versus 8.9 percent in the prior-year quarter.
- Adjusted EBITDA of
$41.6 million , including contribution of$25.8 million from the IEEPA tariff refunds, versus$17.7 million in the prior-year quarter. - Adjusted EBITDA margin of 30.5 percent, including contribution of 1,890 basis points from the IEEPA tariff refunds, versus 14.3 percent in the prior-year quarter.
Guidance
- Net sales for the 2026 third quarter expected to increase by low double-digits from the prior-year quarter.
- Gross margin for the 2026 third quarter expected to be within 35 to 37 percent, including insignificant IEEPA tariff refunds anticipated during the quarter.
- Adjusted EBITDA margin for the 2026 third quarter expected to be within 9 to 11 percent, including insignificant IEEPA tariff refunds anticipated during the quarter.
- 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 in the low 40 percents, including IEEPA tariff refunds recorded during the first half of 2026.
- Adjusted EBITDA margin for full-year 2026 expected to be approximately mid-teens, including IEEPA tariff refunds recorded during the first half of 2026.
“We delivered record quarterly net sales of
“We continue to experience encouraging momentum across the business and our sales pipeline is expanding. During the quarter we added four new chain accounts and our online business grew 23.6 percent over the prior-year quarter, further strengthening our growth prospects. At the same time, we continue to execute plans to enhance operational efficiency and manage costs to support sustainable profitability.
“To support our long-term growth strategy, we are currently finalizing a lease for a 47,000-square-foot warehouse for a new distribution center in Orlando, Florida, which we expect to be operational by the third quarter of this year. The new facility is expected to enhance Karat’s ability to better serve customers throughout the Southeast, improve fulfillment capabilities for our growing e-commerce business, reduce delivery times, and provide additional infrastructure to support future growth,” Yu added.
Second Quarter 2026 Financial Results
Net sales for the 2026 second quarter increased 9.9 percent to
Cost of goods sold for the 2026 second quarter decreased 21.0 percent to
Gross profit for the 2026 second quarter increased to
Operating expenses for the 2026 second quarter increased to
Other income, net for the 2026 second quarter was
Net income for the 2026 second quarter increased 168.3 percent to
Net income attributable to Karat Packaging for the 2026 second quarter was
Adjusted EBITDA, a non-GAAP measure defined below, was
Adjusted diluted earnings per common share, a non-GAAP measure defined below, was
Six-Month 2026 Financial Results
Net sales for the first half of 2026 increased 11.3 percent to
Cost of goods sold for the first half of 2026 decreased 2.3 percent to
Gross profit for the first half of 2026 increased 32.1 percent to
Operating expenses for the first half of 2026 were
Other income, net for the first half of 2026 was
Net income increased 105.9 percent to
Net income attributable to Karat Packaging was
Adjusted EBITDA, a non-GAAP measure defined below, was
Adjusted diluted earnings per common share, a non-GAAP measure defined below, was
Dividend
On August 4, 2026, Karat Packaging’s Board of Directors approved an increase in its regular quarterly dividend to
Share Repurchase Program
During the second quarter of 2026, the Company repurchased 73,510 shares of its common stock at an average price of
Investor Conference Call
The Company will host an investor conference call today, August 6, 2026, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its 2026 second quarter results.
| Phone: | (877) 418-4045 (domestic); (412) 317-6745 (international) |
| Conference ID: | Karat Packaging Inc. |
| Webcast: | Accessible at https://irkarat.com/events-presentations/; archive available for approximately one year |
About Karat Packaging Inc.
Karat Packaging Inc. is a specialty distributor and manufacturer of a wide range of disposable foodservice products and related items, primarily used by national and regional restaurants and in foodservice settings throughout the United States. Its products include food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products. The Company’s eco-friendly Karat Earth® line offers quality, sustainably focused products that are made from renewable resources. Karat Packaging also offers customized solutions, including new product development and design, printing, and logistics services. To learn more about Karat Packaging, please visit the Company’s website at www.karatpackaging.com.
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:
PondelWilkinson Inc.
Judy Lin or Roger Pondel
310-279-5980
ir@karatpackaging.com
| KARAT PACKAGING INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except share and per share data) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net sales | $ | 136,302 | $ | 123,986 | $ | 253,249 | $ | 227,610 | |||||||
| Cost of goods sold | 59,142 | 74,879 | 134,563 | 137,741 | |||||||||||
| Gross profit | 77,160 | 49,107 | 118,686 | 89,869 | |||||||||||
| Operating expenses | |||||||||||||||
| Selling expenses | 17,544 | 13,716 | 30,480 | 28,127 | |||||||||||
| General and administrative expenses (including | 21,954 | 19,124 | 42,080 | 37,672 | |||||||||||
| Loss (gain), net, on disposal of property | 60 | (283 | ) | 60 | (300 | ) | |||||||||
| Total operating expenses | 39,558 | 32,557 | 72,620 | 65,499 | |||||||||||
| Operating income | 37,602 | 16,550 | 46,066 | 24,370 | |||||||||||
| Other income (expenses) | |||||||||||||||
| Rental income (including | 716 | 755 | 1,414 | 1,531 | |||||||||||
| Other income, net (including | 53 | (82 | ) | 144 | (38 | ) | |||||||||
| (Loss) gain on foreign currency transactions | (81 | ) | (2,867 | ) | 171 | (2,628 | ) | ||||||||
| Interest income (including | 1,161 | 676 | 1,447 | 1,242 | |||||||||||
| Interest expense (including ( | (425 | ) | (521 | ) | (834 | ) | (1,030 | ) | |||||||
| Total other income (expenses), net | 1,424 | (2,039 | ) | 2,342 | (923 | ) | |||||||||
| Income before provision for income taxes | 39,026 | 14,511 | 48,408 | 23,447 | |||||||||||
| Provision for income taxes | 9,377 | 3,459 | 11,618 | 5,580 | |||||||||||
| Net income | 29,649 | 11,052 | 36,790 | 17,867 | |||||||||||
| Net income attributable to noncontrolling interest | 318 | 118 | 718 | 524 | |||||||||||
| Net income attributable to Karat Packaging Inc. | $ | 29,331 | $ | 10,934 | $ | 36,072 | $ | 17,343 | |||||||
| Basic and diluted earnings per share: | |||||||||||||||
| Basic | $ | 1.47 | $ | 0.55 | $ | 1.81 | $ | 0.87 | |||||||
| Diluted | $ | 1.46 | $ | 0.54 | $ | 1.80 | $ | 0.86 | |||||||
| Weighted average common shares outstanding, basic | 19,948,690 | 20,058,247 | 19,955,917 | 20,047,436 | |||||||||||
| Weighted average common shares outstanding, diluted | 20,107,051 | 20,191,111 | 20,090,225 | 20,194,942 | |||||||||||
| KARAT PACKAGING INC. AND SUBSIDIARIES NET SALES BY CATEGORY (UNAUDITED) (In thousands) | |||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Chains and distributors | $ | 105,939 | $ | 97,165 | $ | 198,818 | $ | 177,835 | |||
| Online | 25,817 | 20,884 | 45,342 | 38,675 | |||||||
| Retail | 4,546 | 5,937 | 9,089 | 11,100 | |||||||
| $ | 136,302 | $ | 123,986 | $ | 253,249 | $ | 227,610 | ||||
| KARAT PACKAGING INC. AND SUBSIDIARIES SELECTED BALANCE SHEET AND CASH FLOW INFORMATION (In thousands) | |||||
| Selected Balance Sheet Information: | June 30, 2026 | December 31, 2025 | |||
| (Unaudited) | |||||
| Cash and cash equivalents | $ | 38,399 | $ | 37,880 | |
| Short-term investments | $ | 15,744 | $ | — | |
| Accounts receivable, net of allowance for bad debt | $ | 49,208 | $ | 36,402 | |
| Inventories | $ | 89,085 | $ | 81,682 | |
| Total assets | $ | 316,813 | $ | 287,686 | |
| Accounts payable | $ | 33,997 | $ | 26,323 | |
| Total current liabilities | $ | 88,551 | $ | 70,220 | |
| Total liabilities | $ | 142,538 | $ | 130,816 | |
| Total stockholders’ equity | $ | 174,275 | $ | 156,870 | |
| Selected Cash Flow Information: | Six Months Ended June 30, | ||||||
| 2026 | 2025 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Net cash provided by operating activities (1) | $ | 40,345 | $ | 17,476 | |||
| Net cash (used in) provided by investing activities | $ | (18,260 | ) | $ | 1,164 | ||
| Dividends paid to shareholders | $ | (17,953 | ) | $ | (18,048 | ) | |
| Net cash used in financing activities | $ | (21,566 | ) | $ | (19,675 | ) | |
(1) Net cash provided by operating activities included cash receipts related to the IEEPA tariff refunds of
| KARAT PACKAGING INC. AND SUBSIDIARIES 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 June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| Amounts | % of Net Sales | Amounts | % of Net Sales | ||||||||
| Net income: | $ | 29,649 | 21.8 | % | $ | 11,052 | 8.9 | % | |||
| Add (deduct): | |||||||||||
| Interest income | (1,161 | ) | (0.9 | ) | (676 | ) | (0.5 | ) | |||
| Interest expense | 425 | 0.3 | 521 | 0.4 | |||||||
| Provision for income taxes | 9,377 | 6.9 | 3,459 | 2.8 | |||||||
| Depreciation and amortization | 2,727 | 2.0 | 2,678 | 2.1 | |||||||
| Stock-based compensation expense | 596 | 0.4 | 445 | 0.4 | |||||||
| Secondary offering transaction costs (1) | — | — | 214 | 0.2 | |||||||
| Adjusted EBITDA | $ | 41,613 | 30.5 | % | $ | 17,693 | 14.3 | % | |||
| Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin: | Six Months Ended June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| Amounts | % of Net Sales | Amounts | % of Net Sales | ||||||||
| Net income: | $ | 36,790 | 14.5 | % | $ | 17,867 | 7.8 | % | |||
| Add (deduct): | |||||||||||
| Interest income | (1,447 | ) | (0.6 | ) | (1,242 | ) | (0.5 | ) | |||
| Interest expense | 834 | 0.3 | 1,030 | 0.4 | |||||||
| Provision for income taxes | 11,618 | 4.6 | 5,580 | 2.5 | |||||||
| Depreciation and amortization | 5,468 | 2.3 | 5,366 | 2.4 | |||||||
| Stock-based compensation expense | 838 | 0.3 | 791 | 0.3 | |||||||
| Secondary offering transaction costs (1) | — | — | 214 | 0.1 | |||||||
| Adjusted EBITDA | $ | 54,101 | 21.4 | % | $ | 29,606 | 13.0 | % | |||
| Reconciliation of Adjusted EBITDA by Entity: | Three Months Ended June 30, 2026 | ||||||||||||||
| Karat Packaging | Global Wells | Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 29,402 | $ | 375 | $ | (128 | ) | $ | 29,649 | ||||||
| Add (deduct): | |||||||||||||||
| Interest income | (1,158 | ) | (3 | ) | — | (1,161 | ) | ||||||||
| Interest expense | 44 | 381 | — | 425 | |||||||||||
| Provision for income taxes | 9,377 | — | — | 9,377 | |||||||||||
| Depreciation and amortization | 2,424 | 303 | — | 2,727 | |||||||||||
| Stock-based compensation expense | 596 | — | — | 596 | |||||||||||
| Adjusted EBITDA | $ | 40,685 | $ | 1,056 | $ | (128 | ) | $ | 41,613 | ||||||
| Reconciliation of Adjusted EBITDA by Entity: | Three Months Ended June 30, 2025 | ||||||||||||||
| Karat Packaging | Global Wells | Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 10,932 | $ | 139 | $ | (19 | ) | $ | 11,052 | ||||||
| Add (deduct): | |||||||||||||||
| Interest income | (592 | ) | (84 | ) | — | (676 | ) | ||||||||
| Interest expense | 13 | 508 | — | 521 | |||||||||||
| Provision for income taxes | 3,459 | — | — | 3,459 | |||||||||||
| Depreciation and amortization | 2,374 | 304 | — | 2,678 | |||||||||||
| Stock-based compensation expense | 445 | — | — | 445 | |||||||||||
| Secondary offering transaction costs (1) | 214 | — | — | 214 | |||||||||||
| Adjusted EBITDA | $ | 16,845 | $ | 867 | $ | (19 | ) | $ | 17,693 | ||||||
| Reconciliation of Adjusted EBITDA by Entity: | Six Months Ended June 30, 2026 | ||||||||||||||
| Karat Packaging | Global Wells | Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 36,143 | $ | 846 | $ | (199 | ) | $ | 36,790 | ||||||
| Add (deduct): | |||||||||||||||
| Interest income | (1,442 | ) | (5 | ) | — | (1,447 | ) | ||||||||
| Interest expense | 73 | 761 | — | 834 | |||||||||||
| Provision for income taxes | 11,618 | — | — | 11,618 | |||||||||||
| Depreciation and amortization | 4,862 | 606 | — | 5,468 | |||||||||||
| Stock-based compensation expense | 838 | — | — | 838 | |||||||||||
| Adjusted EBITDA | $ | 52,092 | $ | 2,208 | $ | (199 | ) | $ | 54,101 | ||||||
| Reconciliation of Adjusted EBITDA by Entity: | Six Months Ended June 30, 2025 | ||||||||||||||
| Karat Packaging | Global Wells | Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 17,341 | $ | 617 | $ | (91 | ) | $ | 17,867 | ||||||
| Add (deduct): | |||||||||||||||
| Interest income | (931 | ) | (311 | ) | — | (1,242 | ) | ||||||||
| Interest expense | 22 | 1,008 | — | 1,030 | |||||||||||
| Provision for income taxes | 5,580 | — | — | 5,580 | |||||||||||
| Depreciation and amortization | 4,759 | 607 | — | 5,366 | |||||||||||
| Stock-based compensation expense | 791 | — | — | 791 | |||||||||||
| Secondary offering transaction costs (1) | 214 | — | — | 214 | |||||||||||
| Adjusted EBITDA | $ | 27,776 | $ | 1,921 | $ | (91 | ) | $ | 29,606 | ||||||
| Reconciliation of Adjusted Diluted Earnings Per Common Share: | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Diluted earnings per common share: | $ | 1.46 | $ | 0.54 | $ | 1.80 | $ | 0.86 | ||||||
| Add (deduct): | ||||||||||||||
| Stock-based compensation expense | 0.03 | 0.02 | 0.04 | 0.04 | ||||||||||
| Secondary offering transaction costs (1) | — | 0.01 | — | 0.01 | ||||||||||
| Tax impact | (0.01 | ) | — | (0.01 | ) | (0.01 | ) | |||||||
| Adjusted diluted earnings per common shares | $ | 1.48 | $ | 0.57 | $ | 1.83 | $ | 0.90 | ||||||
(1) Secondary offering transaction costs represent legal and professional fees incurred in connection with the completion of the secondary offering by certain executive officers and stockholders of the Company, which were directly related to the offering and were incremental to our normal operating expenses.
| Reconciliation of Free Cash Flow: | Six Months Ended June 30, | ||||||
| 2026 | 2025 | ||||||
| Cash from operating activities (1) | $ | 40,345 | $ | 17,476 | |||
| Deduct: | |||||||
| Purchase of property and equipment | (621 | ) | (274 | ) | |||
| Deposits paid for property and equipment | (1,653 | ) | (989 | ) | |||
| Free Cash Flow | $ | 38,071 | $ | 16,213 | |||
(1) Net cash provided by operating activities included cash receipts related to the IEEPA tariff refunds of
Use of Non-GAAP Financial Measures
Karat Packaging utilizes certain financial measures and key performance indicators that are not defined by, or calculated in accordance with, GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of operations; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable GAAP measure so calculated and presented. The following non-GAAP measures are presented in this press release:
- 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, (v) stock-based compensation expense, and (vi) secondary offering transaction costs.
- 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 secondary offering transaction costs, 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 Karat Packaging, provide useful information and additional clarity of our operating results to our investors in their own evaluation of the core performance of Karat Packaging and facilitate a comparison of such performance from period to period. These are not measurements of financial performance or liquidity under GAAP and should not be considered in isolation or construed as substitutes for net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our financial performance or liquidity. These measures should be considered in addition to, and not as a substitute for, revenue, net income, earnings per share, cash flows or other measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies, as other companies may calculate such financial results differently.
With respect to our financial targets for the 2026 third 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.
