CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2013

CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2013 
Record Sales and Increased Profits 
LAKE BARRINGTON, IL -- (Marketwired) -- 03/25/14 --  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 2013, as well as for the three months ended December 31, 2013. 
Year-End Results 
For the year ended December 31, 2013, consolidated net sales totaled
$56,059,000, compared to consolidated net sales of $49,543,000 for
the year ended December 31, 2012, an increase of 13.2%. Sales for
2013 were at an all-time record high for CTI. For the year, CTI
achieved net income of $376,000 or $0.12 per share (basic) and $0.11
(diluted), compared to $102,000 or $0.03 per share (basic and
diluted) in 2012, a more than 269% improvement. 
Fourth Quarter Results 
Consolidated net sales for the fourth quarter of 2013 were
$15,200,000 compared to consolidated net sales of $12,133,000 for the
fourth quarter of 2012, an increase of more than 25.3%. For the
fourth quarter of 2013, CTI had net income of $67,000 or $0.02 per
share (basic and diluted), compared to a loss of $215,000 for the
fourth quarter of 2012 or $0.07 per share (basic and diluted). 
Key Factors and Trends 
In 2013, net sales rose to the highest level in CTI's 38 year
history, to $56 million as sales in the pouch and container line
expanded 32.4% while sales in the novelty line of foil and latex
balloons continued to expand as well. Overall, sales increased by
13.2% over 2012 sales of $49.5 million. Sales of our branded line of
vacuum sealing machines and associated rolls and pouches, which were
introduced in 2012 grew to $12.5 million in the year, and we
anticipate continued significant revenue growth in that line during
2013. 
Our income from operations increased by 97.4%, from $1,059,000 in
2012 to $2,090,000 in 2013. In the fourth quarter, income from
operations increased from a loss of $65,000 to income of $603,000. 
However, our bottom line results were affected by significant
interest expense we incurred during the year, particularly related to
our mezzanine loan of $5 million and the warrants associated with
that loan, and also to relatively high tax expense. For the year, we
incurred net interest expense of $1,440,000 and in the fourth
quarter, we incurred net interest expense of $468,000. 
Operating expenses increased modestly from $9,848,000 in 2012 to
$10,523,000 in 2013, but as a percentage of sales operating expenses
decreased from 19.9% of sales in 2012 to 18.8% of sales in 2013. 
Gross margin levels increased from 22% in 2012 to 22.5% in 2013. This
increase resulted from a change in the mix of products sold and also
to gross margins achieved by our Mexico subsidiary, Flexo Universal. 
Our liquidity improved with the result that our working capital
increased from just over $10.1 million as of December 31, 2012 to
more than $11.7 million on December 31, 2013. 
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, 
                                                      2013         2012     
                                                  ------------ ------------ 
                      ASSETS                                                
Current assets:                                                             
  Cash and cash equivalents (VIE $54,000 and                                
   $22,000, respectively)                         $    666,616 $    351,064 
  Accounts receivable, (less allowance for                                  
   doubtful accounts of $217,000 and $99,000                                
   respectively)                                     8,883,106    7,773,332 
  Inventories, net                                  15,428,413   15,813,276 
  Net deferred income tax asset                        931,245      846,371 
  Prepaid expenses and other current assets (VIE                            
   $79,000 and $108,000, respectively)               2,261,298    2,345,711 
                                                  ------------ ------------ 
    Total current assets                            28,170,678   27,129,754 
                                                                            
    Total property, plant and equipment, net         8,681,771    8,699,070 
                                                                            
    Total other assets                               2,219,051    1,918,319 
                                                  ------------ ------------ 
                                                                            
TOTAL ASSETS                                      $ 39,071,500 $ 37,747,143 
                                                  ============ ============ 
                                                                            
                                                                            
       LIABILITIES AND STOCKHOLDERS' EQUITY                                 
                                                                            
                                                                            
  Total current liabilities (VIE $493,000 and                               
   $198,000, respectively)                        $ 16,432,989 $ 16,963,447 
  Total long-term liabilities, less current                                 
   maturities (VIE $441,000 and $533,000,                                   
   respectively)                                     9,874,386    8,701,650 
                                                  ------------ ------------ 
    Total Liabilities                               26,307,375   25,665,097 
                                                                            
  Total CTI Industries Corporation stockholders'                            
   equity                                           12,655,890   12,242,738 
                                                                            
  Noncontrolling Interest                              108,235     (160,692)
                                                  ------------ ------------ 
                                                                            
    Total Equity                                    12,764,125   12,082,046 
                                                  ------------ ------------ 
                                                                            
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY          $ 39,071,500 $ 37,747,143 
                                                  ============ ============ 
                                                                            
                                                                            
                                                                            
CTI Industries Corporation and Subsidiaries                                 
Condensed Consolidated Statements of Operations                             
                                                                            
                                                     Three months ended     
                       Year ended December 31,          December 31,        
                         2013          2012          2013          2012     
                                                                            
                     ------------  ------------  ------------  ------------ 
Net sales            $ 56,059,477  $ 49,542,762  $ 15,200,470  $ 12,132,945 
Cost of sales          43,446,618    38,636,245    11,341,234     9,346,057 
                     ------------  ------------  ------------  ------------ 
    Gross profit       12,612,859    10,906,517     3,859,236     2,786,888 
                                                                            
Operating expenses:                                                         
  General and                                                               
   administrative       6,564,355     6,357,249     2,002,032     1,915,791 
  Selling               2,224,551     1,720,878       775,654       416,095 
  Advertising and                                                           
   marketing            1,733,609     1,769,477       478,271       520,399 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Total operating                                                         
     expenses          10,522,515     9,847,604     3,255,957     2,852,285 
                     ------------  ------------  ------------  ------------ 
                                                                            
Income (loss) from                                                          
 operations             2,090,344     1,058,913       603,279       (65,397)
                                                                            
Other (expense)                                                             
 income:                                                                    
  Interest expense,                                                         
   net                 (1,439,712)     (991,152)     (467,662)     (377,906)
  Other                    27,232        24,841        12,889        11,636 
                     ------------  ------------  ------------  ------------ 
                                                                            
    Total other                                                             
     expense           (1,412,480)     (966,311)     (454,773)     (366,270)
                     ------------  ------------  ------------  ------------ 
                                                                            
Income (loss) before                                                        
 income taxes and                                                           
 noncontrolling                                                             
 interest                 677,864        92,602       148,506      (431,666)
                                                                            
Income tax expense                                                          
 (benefit)                269,836        46,272        46,074      (157,454)
                     ------------  ------------  ------------  ------------ 
                                                                            
Net income (loss)         408,028        46,330       102,432      (274,213)
                                                                            
Less: Net loss                                                              
 attributable to                                                            
 noncontrolling                                                             
 interest                  32,519       (55,419)       35,601       (58,844)
                     ------------  ------------  ------------  ------------ 
                                                                            
    Net income                                                              
     (loss)                                                                 
     attributable to                                                        
     CTI Industries                                                         
     Corporation     $    375,509  $    101,749  $     66,831  $   (215,369)
                     ============  ============  ============  ============ 
                                                                            
Income (loss)                                                               
 applicable to                                                              
 common shares       $    375,509  $    101,749  $     66,831  $   (215,369)
                     ============  ============  ============  ============ 
                                                                            
Other Comprehensive                                                         
 Income                                                                     
  Foreign currency                                                          
   adjustment             (81,919)      114,097      (201,813)       26,015 
                     ------------  ------------  ------------  ------------ 
    Comprehensive                                                           
     income (loss)                                                          
     attributable to                                                        
     CTI Industries                                                         
     Corporation     $    293,590  $    215,846  $   (134,982) $   (189,354)
                     ============  ============  ============  ============ 
                                                                            
Basic income (loss)                                                         
 per common share    $       0.12  $       0.03  $       0.02  $      (0.07)
                     ============  ============  ============  ============ 
                                                                            
Diluted income                                                              
 (loss) per common                                                          
 share               $       0.11  $       0.03  $       0.02  $      (0.07)
                     ============  ============  ============  ============ 
                                                                            
Weighted average                                                            
 number of shares                                                           
 andequivalent                                                              
 shares of common                                                           
 stock outstanding:                                                         
  Basic                 3,248,646     3,216,756     3,248,646     3,240,266 
                     ============  ============  ============  ============ 
                                                                            
  Diluted               3,404,804     3,293,106     3,407,288     3,252,528 
                     ============  ============  ============  ============ 

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