CTI Industries Corporation Reports Second Quarter 2013 Financial Results

CTI Industries Corporation Reports Second Quarter 2013 Financial Results 
Vacuum Sealer Product Line Sales Soar 84% 
LAKE BARRINGTON, IL -- (Marketwired) -- 08/12/13 --  CTI Industries
Corporation (NASDAQ: CTIB), a manufacturer and marketer of flexible
packaging and storage products, laminated films and novelty balloons,
today announced its results of operations for the second quarter of
2013 and for the six month period ended June 30, 2013. 
Sales for the second quarter were up 10.3% over second quarter 2012,
led by an increase in revenues in the vacuum sealer line of 84%
compared to the second quarter last year. 
"Sales for the second quarter were strong in our principal product
lines, but sales in the vacuum sealer product line soared," reported
Stephen Merrick, President. "We have hit our stride in the vacuum
sealer line, which is now offered for sale in almost 6,000 retail
outlets throughout the United States, and we are pushing for
considerably further expansion of our outlets and sales in this
line," he said. 
Consolidated net sales for the second quarter of 2013 were
$13,034,000 compared to consolidated net sales of $11,816,000 for the
second quarter of 2012, an increase of 10.3%. The Company had a net
loss of $56,000 or $0.02 per share (basic and diluted) for the second
quarter of 2013 compared to a net loss of $78,000 or $0.02 per share
(basic and diluted) for the second quarter of 2012. 
For the six month period ended June 30, 2013, consolidated net sales
were $26,379,000 compared to $25,624,000 for the same period in 2012,
an increase of 2.9%. For this six month period in 2013, net income
was $74,000 or $0.02 per share (basic and diluted) compared to net
income of $311,000, or $0.10 per share (basic and diluted) for the
same period of 2012. 
"We had income from operations in the second quarter this year of
$291,000 compared to $13,000 for the same period last year," reported
Mr. Merrick, "but our net income this quarter was affected by several
charges including (i) a one-time rebate cost of $93,000, (ii)
interest expense of $206,000 and (iii) foreign currency exchange loss
of $171,000." 
Key Factors and Trends 
Sales were strong in all of our principal product lines, particularly
in the vacuum sealer product line. Sales of in the vacuum sealer
product line, including vacuum sealing machines, pouches and rolls,
increased by 84% from $1,682,000 the second quarter of 2012 to
$3,093,000 for the second quarter this year. For the six months ended
June 30, 2013, sales in this line increased by 39% from $3,612,000
last year to $5,021,000 this year. 
For the quarter, latex balloon sales increased by 5.9% from
$2,837,000 in the second quarter last year to $3,005,000 in the
second quarter this year. For foil balloons, sales in the second
quarter this year were $5,560,000 compared to $5,513,000 in the
second quarter last year. 
The gross margin rate in the second quarter this year dipped to 19.0%
compared to 19.9% for the same period last year, principally due to a
one-time rebate charge incurred in the second quarter this year. For
the six months ended June 30, 2013, the gross margin rate was 20.7%
compared to 21.3% for the same period last year. 
Operating expenses were down modestly in the second quarter 2013
compared to the same period last year, as we managed to moderate
expenses incurred last year to support sales growth. As a percentage
of revenues, operating expenses declined from 19.8% of sales in the
second quarter last year to 16.8% of sales for second quarter this
year. 
For the quarter, income from operations was $291,000 compared to
$13,000 for the second quarter last year. However, net income for the
quarter was negatively affected by (i) one-time rebate costs of
$93,000, (ii) interest expense of $206,000 and (iii) foreign exchange
currency loss of $171,000.  
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. 


 
                                                                            
                                                                            
CTI Industries Corporation and Subsidiaries                                 
Condensed Consolidated Balance Sheets                                       
                                                  June 30,    *December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
                    Assets                      (Unaudited)                 
Current Assets:                                                             
  Cash and cash equivalents (VIE $27,000 and                                
   $22,000, respectively)                      $     458,745  $     351,064 
  Accounts receivable, net                         7,646,658      7,773,332 
  Inventories, net                                15,058,075     15,813,276 
  Other current assets (VIE $77,000 and                                     
   $108,000, respectively)                         3,063,805      3,192,082 
                                               -------------  ------------- 
Total current assets                              26,227,283     27,129,754 
                                                                            
Property, plant and equipment, net                 8,549,100      8,699,070 
Other assets                                       2,042,718      1,918,319 
                                               -------------  ------------- 
                                                                            
Total Assets                                   $  36,819,101  $  37,747,143 
                                               =============  ============= 
                                                                            
             Liabilities & Equity                                           
Total current liabilities (VIE $115,000 and                                 
 $198,000, respectively)                       $  14,684,149  $  16,963,447 
Long term debt, less current maturities            9,748,117      8,701,650 
CTI Industries Corporation stockholders'                                    
 equity                                           12,556,507     12,242,738 
Noncontrolling interest                             (169,672)      (160,692)
                                               -------------  ------------- 
                                                                            
Total Liabilities & Equity                     $  36,819,101  $  37,747,143 
                                               =============  ============= 
                                                                  
          
                                                                            
                                                                            
Condensed Consolidated Statements of Operations                             
                     Three Months Ended June 30   Six Months Ended June 30  
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
                      (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
                                                                            
Net sales            $ 13,034,306  $ 11,816,448  $ 26,379,072  $ 25,623,592 
Cost of sales          10,552,216     9,463,198    20,922,965    20,175,271 
                     ------------  ------------  ------------  ------------ 
                                                                            
Gross profit            2,482,090     2,353,250     5,456,107     5,448,321 
                                                                            
Operating expenses      2,190,957     2,340,507     4,634,823     4,592,815 
                     ------------  ------------  ------------  ------------ 
                                                                            
Income from                                                                 
 operations.              291,133        12,743       821,284       855,506 
                                                                            
Other (expense)                                                             
 income:                                                                    
  Net Interest                                                              
   expense               (200,239)     (167,002)     (668,213)     (347,990)
  Other                  (170,821)        5,680       (26,297)        7,906 
                     ------------  ------------  ------------  ------------ 
                                                                            
Net (loss) income                                                           
 before taxes             (79,927)     (148,579)      126,774       515,422 
                                                                            
Income tax (benefit)                                                        
 expense                  (24,369)      (52,656)       61,400       202,275 
                     ------------  ------------  ------------  ------------ 
                                                                            
Net (loss) income         (55,558)      (95,923)       65,374       313,147 
                                                                            
Less: Net gain                                                              
 (loss) attributable                                                        
 to noncontrolling                                                          
 interest                     420       (18,375)       (8,980)        2,066 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Net (loss)                                                              
     income                                                                 
     attributable to                                                        
     CTI Industries                                                         
     Corporation     $    (55,978) $    (77,548) $     74,354  $    311,081 
                     ============  ============  ============  ============ 
                                                                            
Net (loss) income                                                           
 applicable to                                                              
 common shares       $    (55,978) $    (77,548) $     74,354  $    311,081 
                     ============  ============  ============  ============ 
                                                                            
Other Comprehensive                                                         
 Income (Loss)                                                              
  Foreign currency                                                          
   adjustment             200,632      (457,369)      170,232      (299,193)
                     ------------  ------------  ------------  ------------ 
    Comprehensive                                                           
     income (loss)   $    144,654  $   (534,917) $    244,586  $     11,888 
                     ------------  ------------  ------------  ------------ 
                                                                            
Basic (loss) income                                                         
 per common share    $      (0.02) $      (0.02) $       0.02  $       0.10 
                     ============  ============  ============  ============ 
                                                                            
Diluted (loss)                                                              
 income per common                                                          
 share               $      (0.02) $      (0.02) $       0.02  $       0.10 
                     ============  ============  ============  ============ 
                                                                            
Weighted average                                                            
 number of shares                                                           
 and equivalent                                                             
 shares of common                                                           
 stock outstanding:                                                         
  Basic                 3,248,646     3,207,244     3,248,646     3,205,875 
                     ============  ============  ============  ============ 
                                                                            
  Diluted               3,400,641     3,240,559     3,405,946     3,238,795 
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                                                                            
*The condensed consolidated financial statements do not include all         
 required disclosures, refer to the Form 10K for omitted disclosures.       

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