CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2012

CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2012 
LAKE BARRINGTON, IL -- (Marketwire) -- 03/21/13 --  CTI Industries
Corporation (NASDAQ: CTIB), a manufacturer and marketer of novelty
balloons, flexible packaging and storage products and printed and
laminated films, today announced its full-year results of operations
for 2012, as well as for the three months ended December 31, 2012. 
Year-End Results 
For the year ended December 31, 2012, consolidated net sales totaled
$49,543,000, compared to consolidated net sales of $47,171,000 for
the year ended December 31, 2011, an increase of 5%. For the year,
CTI achieved net income of $102,000 or $0.03 per share (basic and
diluted), compared to $484,000 or $0.15 per share (basic and diluted)
in 2011.  
Fourth Quarter Results 
Consolidated net sales for the fourth quarter of 2012 were
$12,133,000 compared to consolidated net sales of $10,778,000 for the
fourth quarter of 2011, an increase of 12.6%. For the fourth quarter
of 2012, CTI had a net loss of $215,000, compared to net income of
$155,000 for the fourth quarter of 2011. For the fourth quarter, CTI
had a loss per share of $0.07 (basic and diluted) compared to
earnings per share for the fourth quarter 2011 of $0.05 (basic and
diluted). 
Key Factors and Trends 
In 2012, net sales rose to the highest level in CTI's 37 year
history, as sales in the pouch and container line expanded 14% while
sales in the novelty line of foil and latex balloons continued to
expand as well. Sales of our branded line of vacuum sealing machines
and associated rolls and pouches, which were just introduced in 2012,
grew to $5.6 million in the year, and we anticipate significant
revenue growth in that line during 2013. 
Bottom line results were affected by substantial increases in
selling, marketing and administrative expenses principally related to
our investment in the planning, development, introduction, marketing
and selling of the new branded line of vacuum sealing consumer
products, and also related to the expansion of our operations in
foreign markets.  
Gross margin levels increased from 19.5% in 2011 to 22% in 2012. This
increase resulted from the moderation in some commodities pricing
during 2012 and also because of a change in the mix of the products
we sold from lower margin to higher margin products. 
Sales in our foreign operations (Mexico, the UK and Europe) increased
from $12,514,000 in 2011 to $14,016,000 in 2012, an increase of 12%,
reflecting our continued efforts to expand our international
activities and revenues. 
We invested significantly in our future during 2012, increasing our
inventories by $2.5 million and investing over $1.2 million in
capital items, principal production equipment and facilities.  
Nevertheless, our liquidity improved, in part due to our subordinated
loan financing, with the result that our working capital increased
from just over $5 million as of December 31, 2011 to more than $10
million on December 31, 2012. 
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. 


 
                                                                            
                CTI Industries Corporation and Subsidiaries                 
                   Condensed Consolidated Balance Sheets                    
                                                                            
                                       December 31, 2012  December 31, 2011 
                                       -----------------  ----------------- 
                ASSETS                                                      
Current assets:                                                             
  Cash and cash equivalents (VIE                                            
   $22,000 and $11,000, respectively)  $         351,064  $         338,523 
  Accounts receivable, (less allowance                                      
   for doubtful accounts of $99,000                                         
   and $70,000 respectively)                   7,773,332          7,091,194 
  Inventories, net                            15,813,276         13,338,317 
  Net deferred income tax asset                  846,371            760,241 
  Prepaid expenses and other current                                        
   assets (VIE $108,000 and $93,000,                                        
   respectively)                               2,345,711          1,772,694 
                                       -----------------  ----------------- 
    Total current assets                      27,129,754         23,300,969 
                                                                            
    Total property, plant and                                               
     equipment, net                            8,699,070          8,843,909 
                                                                            
    Total other assets                         1,918,319          1,470,644 
                                       -----------------  ----------------- 
                                                                            
TOTAL ASSETS                           $      37,747,143  $      33,615,522 
                                       =================  ================= 
                                                                            
                                                                            
 LIABILITIES AND STOCKHOLDERS' EQUITY                                       
                                                                            
                                                                            
    Total current liabilities (VIE                                          
     $198,000 and $98,000,                                                  
     respectively)                     $      16,963,447  $      17,688,994 
    Total long-term liabilities, less                                       
     current maturities (VIE $533,000                                       
     and $687,000, respectively)               8,701,650          4,171,033 
                                       -----------------  ----------------- 
      
Total Liabilities                       25,665,097         21,860,027 
                                                                            
    Total CTI Industries Corporation                                        
     stockholders' equity                     12,242,738         11,860,768 
                                                                            
    Noncontrolling Interest                     (160,692)          (105,273)
                                       -----------------  ----------------- 
                                                                            
      Total Equity                            12,082,046         11,755,495 
                                       -----------------  ----------------- 
                                                                            
TOTAL LIABILITIES & STOCKHOLDERS'                                           
 EQUITY                                $      37,747,143  $      33,615,522 
                                       =================  ================= 
                                                                            
                                                                            
                                                                            
           CTI Industries Corporation and Subsidiaries                      
         Condensed Consolidated Statements of Operations                    
                                                                            
                                                      Three months ended    
                          Year ended December 31,        December 31,       
                             2012         2011         2012         2011    
                                                                            
                         -----------  -----------  -----------  ----------- 
Net sales                $49,542,762  $47,171,498  $12,132,945  $10,778,107 
Cost of sales             38,636,245   37,965,245    9,346,057    8,381,984 
                         -----------  -----------  -----------  ----------- 
    Gross profit          10,906,517    9,206,253    2,786,888    2,396,123 
                                                                            
Operating expenses:                                                         
  General and                                                               
   administrative          6,357,249    5,278,507    1,915,791    1,303,511 
  Selling                  1,720,878      910,882      416,095      256,350 
  Advertising and                                                           
   marketing               1,769,477    1,579,162      520,399      470,230 
                         -----------  -----------  -----------  ----------- 
                                                                            
    Total operating                                                         
     expenses              9,847,604    7,768,551    2,852,285    2,030,091 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income (loss) from                                                          
 operations                1,058,913    1,437,702      (65,397)     366,032 
                                                                            
Other (expense) income:                                                     
  Interest expense          (991,152)    (773,111)    (377,906)    (171,269)
  Other                       24,841       38,169       11,636        3,272 
                         -----------  -----------  -----------  ----------- 
                                                                            
    Total other expense     (966,311)    (734,942)    (366,270)    (167,997)
                         -----------  -----------  -----------  ----------- 
                                                                            
Income (loss) before                                                        
 income taxes and                                                           
 noncontrolling interest      92,602      702,760     (431,666)     198,035 
                                                                            
Income tax expense                                                          
 (benefit)                    46,272      319,444     (157,454)      65,636 
                         -----------  -----------  -----------  ----------- 
                                                                            
Net income (loss)             46,330      383,316     (274,213)     132,399 
                                                                            
Less: Net loss                                                              
 attributable to                                                            
 noncontrolling interest     (55,419)    (100,594)     (58,844)     (22,928)
                         -----------  -----------  -----------  ----------- 
                                                                            
    Net income (loss)                                                       
     attributable to CTI                                                    
     Industries                                                             
     Corporation         $   101,749  $   483,910  $  (215,369) $   155,327 
                         ===========  ===========  ===========  =========== 
                                                                            
Income (loss) applicable                                                    
 to common shares        $   101,749  $   483,910  $  (215,369) $   155,327 
                         ===========  ===========  ===========  =========== 
                                                                            
Other Comprehensive                                                         
 Income                                                                     
  Foreign currency                                                          
   adjustment                114,197     (692,881)      26,015     (369,300)
                         -----------  -----------  -----------  ----------- 
    Comprehensive income                                                    
     (loss) attributable                                                    
     to CTI Industries                                                      
     Corporation         $   215,946  $  (208,971) $  (189,354) $  (213,973)
                         ===========  ===========  ===========  =========== 
                                                                            
Basic income (loss) per                                                     
 common share            $      0.03  $      0.15  $     (0.07) $      0.05 
                         ===========  ===========  ===========  =========== 
                                                                            
Diluted income (loss)                                                       
 per common share        $      0.03  $      0.15  $     (0.07) $      0.05 
                         ===========  ===========  ===========  =========== 
                                      
                                      
Weighted average number                                                     
 of shares and                                                              
 equivalent shares of                                                       
 common stock                                                               
 outstanding:                                                               
  Basic                    3,216,756    3,138,958    3,240,266    3,141,261 
                         ===========  ===========  ===========  =========== 
                                                                            
  Diluted                  3,293,106    3,181,102    3,252,528    3,180,143 
                         ===========  ===========  ===========  =========== 

  
FOR FURTHER INFORMATION CONTACT: 
Stephen M. Merrick 
President 
(847) 382-1000  
Investor Relations
(847) 620-1330