SOURCE: CTI Industries Corporation

March 21, 2011 07:30 ET

CTI Industries Corporation Reports Record Results for 2010, Strong Fourth Quarter

BARRINGTON, IL--(Marketwire - March 21, 2011) - CTI Industries Corporation (NASDAQ: CTIB), a manufacturer and marketer of novelty balloons, printed and laminated films and flexible packaging and storage products, today announced its full-year results of operations for 2010, as well as for the three months ended December 31, 2010.

Year-End Results

For the year ended December 31, 2010, consolidated net sales totaled $47,748,000, compared to consolidated net sales of $41,295,000 for the year ended December 31, 2009, an increase of 15%. For the year, CTI achieved net income of $1,827,000 or $0.61 per share (basic) and $0.60 per share (diluted), compared to $1,003,000 or $0.36 per share (basic and diluted) for 2009, an increase of over 80%.

Fourth Quarter Results

Consolidated net sales for the fourth quarter of 2010 were $11,701,000 compared to consolidated net sales of $10,738,000 for the fourth quarter of 2009, an increase of 9%. For the fourth quarter of 2010, CTI had net income of $379,000, compared to net income of $296,000 for the fourth quarter of 2009, an increase of 28%. Earnings per share for the fourth quarter of 2010 were $0.12 (basic and diluted), compared to $0.11 (basic and diluted) for the same period of 2009.

Key Factors and Trends

2010 was a record year for CTI. Sales were the highest in CTI's 34 year history. Sales grew in each of CTI's product lines:

Pouch sales were up 26% from $6,895,000 in 2009 to $8,676,000 in 2010

Foil balloon sales were up 10.5% from $19.8 million in 2009 to $21.9 million in 2010

Latex balloon sales were up 22% from $7,024,000 in 2009 to $8,589,000 in 2010

Film product sales were up 7.4% from $6,913,000 in 2009 to $7,428,000 in 2010.

Gross margin levels remained constant at 22.2% in 2010 compared to 22.3% in 2009. The cost of raw materials increased in 2010 to 45% of sales compared to 43.9% of sales in 2009. This increase in raw materials costs derived principally from increases in the price of petroleum and natural latex.

During 2010, CTI established an office and warehouse in Germany and has commenced sales of novelty products in mainland Europe. During the year, CTI also acquired and assembled new equipment for the production of latex balloons which is expected to increase latex balloon production capacity by 70%.

CTI generated over $3 million in cash flow from operations and reduced long term indebtedness by over $1.7 million. The Company's working capital balance increased to over $3 million and shareholders equity increased from $8.7 million at the end of 2009 to more than $11.8 million by year-end 2010.

CTI Industries Corporation, based in suburban Chicago, designs, develops, produces and markets a line of novelty balloon products, laminated and printed films for packaging applications and flexible packaging and storage products.

Statements made in this release that are not historical facts are "forward-looking" statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) 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. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. 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

                                                December 31,  December 31,
                                                    2010          2009
                                                ------------  -------------
                      ASSETS
Current assets:
  Cash                                          $    761,874  $     870,446
  Accounts receivable, (less allowance for
   doubtful accounts of $59,000 and $57,000
   respectively)                                   8,533,626      7,320,181
  Inventories, net                                10,368,037      9,643,914
  Net deferred income tax asset                      750,485        706,754
  Prepaid expenses and other current assets        1,012,067        607,127
                                                ------------  -------------

    Total current assets                          21,426,089     19,148,422

    Total property, plant and equipment, net       9,659,768      9,533,411

    Total other assets                             1,775,531      1,713,476
                                                ------------  -------------

TOTAL ASSETS                                    $ 32,861,388  $  30,395,309
                                                ============  =============


     LIABILITIES AND STOCKHOLDERS' EQUITY


    Total current liabilities                   $ 17,952,042  $  16,734,520
    Total long-term liabilities, less current
       maturities                                  3,129,685      4,881,568
                                                ------------  -------------
      Total Liabilities                           21,081,727     21,616,088

    Total CTI Industries Corporation
     stockholders' equity                         11,784,340      8,762,663

      Noncontrolling Interest                         (4,679)        16,558
                                                ------------  -------------

      Total Equity                                11,779,661      8,779,221
                                                ------------  -------------

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY        $ 32,861,388  $  30,395,309
                                                ============  =============





CTI Industries Corporation and Subsidiaries
Condensed Consolidated Statements of Operations


                                                    Three months ended
                      Year ended December 31,           December 31,
                        2010          2009          2010          2009
                    ------------  ------------  ------------  ------------
Net sales           $ 47,747,611  $ 41,295,152  $ 11,700,684  $ 10,737,583
Cost of sales         37,145,439    32,081,779     9,265,322     8,369,364
                    ------------  ------------  ------------  ------------
  Gross profit        10,602,172     9,213,373     2,435,362     2,368,219

Operating expenses:
  General and
   administrative      4,921,457     4,539,494     1,113,939     1,151,999
  Selling                914,698       871,258       243,369       269,438
  Advertising and
   marketing           1,719,509     1,576,225       389,985       363,059
                    ------------  ------------  ------------  ------------

    Total operating
     expenses          7,555,664     6,986,977     1,747,293     1,784,496
                    ------------  ------------  ------------  ------------

Income from
 operations            3,046,508     2,226,396       688,069       583,723

Other (expense)
 income:
  Interest expense      (919,170)   (1,085,107)     (219,363)     (260,355)
  Other                  (31,382)      (19,956)        5,966       (13,509)
                    ------------  ------------  ------------  ------------

    Total other
     expense            (950,552)   (1,105,063)     (213,397)     (273,864)
                    ------------  ------------  ------------  ------------

Income before income
 taxes and
 noncontrolling
 interest              2,095,956     1,121,333       474,672       309,859

Income tax expense       342,688       114,391       134,426        12,604
                    ------------  ------------  ------------  ------------

Net Income             1,753,268     1,006,942       340,246       297,255

Less: Net (loss)
 income
 attributable to
 noncontrolling
 interest                (74,250)        3,802       (38,334)          779
                    ------------  ------------  ------------  ------------

    Net income
     attributable
     to CTI
     Industries
     Corporation    $  1,827,518  $  1,003,140  $    378,580  $    296,476
                    ============  ============  ============  ============

Income applicable
 to common shares   $  1,827,518  $  1,003,140  $    378,580  $    296,476
                    ============  ============  ============  ============

Basic income per
 common share       $       0.61  $       0.36  $       0.12  $       0.11
                    ============  ============  ============  ============

Diluted income per
 common share       $       0.60  $       0.36  $       0.12  $       0.11
                    ============  ============  ============  ============

Weighted average
 number of shares
 and equivalent shares
 of common stock
 outstanding:
    Basic              2,981,188     2,765,277     3,130,862     2,738,063
                    ============  ============  ============  ============

    Diluted            3,039,442     2,775,062     3,205,154     2,757,058
                    ============  ============  ============  ============