SOURCE: CTI Industries Corporation

CTI Industries Corporation

May 13, 2014 06:30 ET

CTI Industries Corporation Reports First Quarter 2014 Financial Results

LAKE BARRINGTON, IL--(Marketwired - May 13, 2014) - CTI Industries Corporation (NASDAQ: CTIB), a manufacturer and marketer of consumer vacuum sealing systems and products, novelty balloons, flexible packaging and storage products and laminated films, today announced its results of operations for the first quarter of 2014.

Consolidated net sales for the first quarter of 2014 were $14,920,000 compared to consolidated net sales of $13,345,000 for the first quarter of 2013, an increase of almost 12%. The increase in sales was led by sales increases in the two principal product lines of the Company -- vacuum sealing systems and foil balloons. Sales of vacuum sealing systems and products continued their rapid rate of increase growing by over 44% for the quarter to $2,781,000 from $1,929,000 in the first quarter 2013. Sales of foil balloons continued their consistent rise, reaching $7,273,000 in the quarter compared to $6,782,000 same period of the prior year, a growth rate of 7.2%.

For both of these product lines, sales growth was market by increased in sales to existing customers as well as sales to new customers. Foil balloons saw growth particularly in the Company's operations in the United Kingdom, Europe and Mexico.

For the quarter, the Company had net income of $45,000 or $0.01 per share, compared to net income in the first quarter last year of $130,000, or $0.04 per share. Income from operations for the quarter was $326,000, which was affected principally by net interest expense of $301,000 for the quarter. This interest expense reflects to significant expense the interest expense arising from the $5 million mezzanine loan the Company obtained in July, 2012 to finance its investment in the vacuum sealing system product line and market.

"Sales continue to advance at a strong rate, particularly for two of our principal product lines -- consumer vacuum sealing systems and foil balloons, and we anticipate further growth in both of those lines as well as in our line of latex balloons," said John Schwan, Chief Executive Officer. "As we continue this growth, we are focused on controlling our operating expenses and structuring our debt in a manner that will result in improved bottom line performance," he said.

Statements made in this release that are not historical facts are "forward-looking" statement (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These "forward-looking" statements may include, but are not limited to, statements containing words such as "may," "should," "could," "would," "expect," "plan," "goal," "anticipate," "believe," "estimate," "predict," "potential," "continue," or similar expressions. Factors that could cause results to differ are identified in the public filings of the Company with the Securities and Exchange Commission. More information on factors that could affect CTI's business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

- FINANCIAL HIGHLIGHTS FOLLOW -

             
CTI Industries Corporation and Subsidiaries            
Condensed Consolidated Balance Sheets            
    March 31, 2014     *December 31, 2013  
             
Assets   (Unaudited)        
Current Assets:                
  Cash and cash equivalents (VIE $6,000 and $54,000, respectively)   $ 427,601     $ 666,616  
  Accounts receivable, net     9,236,593       8,883,106  
  Inventories, net (VIE $543,000 and $390,000, respectively)     15,842,318       15,428,413  
  Other current assets (VIE $79,000 and $79,000, respectively)     2,733,102       3,192,543  
Total current assets     28,239,614       28,170,678  
                 
Property, plant and equipment, net (VIE $763,000 and $762,000, respectively)     8,571,582       8,681,771  
Other assets     2,381,894       2,219,051  
                 
Total Assets   $ 39,193,090     $ 39,071,500  
                 
Liabilities & Equity                
Total current liabilities (VIE $925,000 and $493,000, respectively)   $ 16,509,079     $ 16,432,989  
Long term debt, less current maturities (VIE $413,000 and $441,000, respectively)     9,779,823       9,874,386  
CTI Industries Corporation stockholders' equity     12,835,916       12,655,890  
Noncontrolling interest     68,272       108,235  
                 
Total Liabilities & Equity   $ 39,193,090     $ 39,071,500  
                 
                 
                 
Condensed Consolidated Statements of Operations            
    Three Months Ended March 31  
    2014     2013  
      (Unaudited)       (Unaudited)  
                 
Net sales   $ 14,920,330     $ 13,344,766  
Cost of sales     11,422,921       10,370,749  
                 
Gross profit     3,497,409       2,974,017  
                 
Operating expenses     3,171,459       2,443,866  
                 
Income from operations.     325,950       530,151  
                 
Other (expense) income:                
  Net Interest expense     (301,487 )     (467,975 )
  Other     (5,179 )     144,524  
                 
Income before income taxes     19,284       206,700  
                 
Income tax (benefit) expense     (2,177 )     85,768  
                 
Net Income     21,461       120,932  
                 
Less: Net income attributable to noncontrolling interest     (23,962 )     (9,400 )
                 
  Net income attributable to CTI Industries Corporation   $ 45,423     $ 130,332  
                 
Income applicable to common shares   $ 45,423     $ 130,332  
                 
Other Comprehensive (Loss) Income                
  Foreign currency adjustment     (188,092 )     (30,400 )
  Comprehensive (loss) income   $ (142,669 )   $ 99,932  
                 
Basic income per common share   $ 0.01     $ 0.04  
                 
Diluted income per common share   $ 0.01     $ 0.04  
                 
Weighted average number of shares and equivalent shares of common stock outstanding:                
  Basic     3,249,268       3,248,646  
                 
  Diluted     3,413,800       3,415,911  
                 
                 
*The condensed consolidated financial statements do not include all required disclosures, refer to the Form 10K for omitted disclosures.