CTI Industries Corporation Reports Second Quarter 2014 Financial Results

By Market Wire,  August 13, 2014, 06:30:00 AM EDT


LAKE BARRINGTON, IL -- (Marketwired) -- 08/13/14 -- 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 2014 and for the six month period ended June 30, 2014.

Consolidated net sales for the second quarter of 2014 were $13,159,000 compared to consolidated net sales of $13,034,000 for the second quarter of 2013, an increase of about 1%. The Company had a net loss of $122,000 or ($0.04) per share (basic and diluted) for the second quarter of 2014 compared to a net loss $56,000 or ($0.02) per share (basic and diluted) for the second quarter of 2013.

For the six month period ended June 30, 2014, consolidated net sales were $28,079,000 compared to $26,379,000 for the same period in 2013, an increase of 6.4%. For this six month period in 2014, the Company had a net loss of $77,000 or ($0.02) per share (basic and diluted) compared to net income of $74,000, or $0.02 per share (basic and diluted) for the same period of 2013.

Key Factors and Trends

Interest expense remains a significant factor affecting profitability. In the second quarter 2014, the Company incurred net interest costs of $205,000 and for the six months incurred net interest charges of $506,000. Much of this interest cost relates to the outstanding mezzanine loan in the principal amount of $5 million. In the second quarter 2013, the Company incurred net interest cost of $200,000 and, for the six months last year, incurred a net interest cost of $668,000.

Gross margin rates improved substantially in both the second quarter and the six months of 2014 to 23% and 23.2%, respectively. In the second quarter and six months of 2013, the gross margin rates were 19% and 20.7% respectively. This increase is attributable to (i) an increase in the gross margin rates of our Mexico subsidiary, Flexo and (ii) generally higher gross margin rates of a direct sales company which has been consolidated as a variable interest entity.

Net sales of foil balloons increased by 10% in the second quarter compared to the same period of 2013, from $5,560,000 in the second quarter last year to $6,115,000 this year. For the six month period ended June 30, 2014, revenue from foil balloons increased by 8.5% over the same period last year, from $12,342,000 to $13,388,000.

Net sales of latex balloons increased in the second quarter this year compared to the same period last year by 3.5% from $3,005,000 to $3,109,000

Sales of our vacuum sealing system products were down in the second quarter this year compared to the same period of last year. However, we believe the decline was temporary and that sales of vacuum sealing system product will increase in the third and fourth quarters.

Operating expenses rose during the quarter. However, much of that increase is attributable to the inclusion of the operating expenses of the direct sales company we are now consolidating with the results of the Company and that company contributed $1.1 million in revenues to the consolidated revenues of the Company in the first six months of this year.

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,

2014
*December 31,

2013
Assets (Unaudited)
Current Assets:
Cash and cash equivalents (VIE $28,000 and $54,000, respectively) $ 277,562 $ 666,616
Accounts receivable, net (VIE $4,000 and $0, respectively) 10,069,378 8,883,106
Inventories, net (VIE $542,000 and $390,000, respectively) 16,651,235 15,428,413
Other current assets (VIE $80,000 and $79,000, respectively) 3,206,994 3,192,543
Total current assets 30,205,169 28,170,678
Property, plant and equipment, net (VIE $652,000 and $670,000, respectively) 8,308,365 8,681,771
Other assets 2,743,771 2,219,051
Total Assets $ 41,257,305 $ 39,071,500
Liabilities & Equity
Total current liabilities (VIE $789,000 and $493,000, respectively) $ 18,781,298 $ 16,432,989
Long term debt, less current maturities (VIE $380,000 and $441,000, respectively) 9,555,568 9,874,386
CTI Industries Corporation stockholders' equity 12,903,934 12,655,890
Noncontrolling interest 16,505 108,235
Total Liabilities & Equity $ 41,257,305 $ 39,071,500

Condensed Consolidated Statements of Operations
Three Months Ended June 30 Six Months Ended June 30
2014 2013 2014 2013
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $ 13,158,876 $ 13,034,306 $ 28,079,207 $ 26,379,072
Cost of sales 10,132,840 10,552,216 21,555,762 20,922,965
Gross profit 3,026,036 2,482,090 6,523,445 5,456,107
Operating expenses 3,081,735 2,190,957 6,253,194 4,634,823
(Loss) income from operations. (55,699 ) 291,133 270,251 821,284
Other (expense) income:
Net Interest expense (204,980 ) (200,239 ) (506,469 ) (668,213 )
Other 2,696 (170,821 ) (2,481 ) (26,297 )
Net (loss) income before taxes (257,983 ) (79,927 ) (238,699 ) 126,774
Income tax (benefit) expense (83,726 ) (24,369 ) (85,903 ) 61,400
Net (loss) income (174,257 ) (55,558 ) (152,796 ) 65,374
Less: Net (loss) income attributable to noncontrolling interest (51,768 ) 420 (75,730 ) (8,980 )
Net (loss) income attributable to CTI Industries Corporation $ (122,489 ) $ (55,978 ) $ (77,066 ) $ 74,354
Net (loss) income applicable to common shares $ (122,489 ) $ (55,978 ) $ (77,066 ) $ 74,354
Other Comprehensive Income (Loss)
Foreign currency adjustment 189,488 200,632 1,396 170,232
Comprehensive income (loss) $ 66,999 $ 144,654 $ (75,670 ) $ 244,586
Basic (loss) income per common share $ (0.04 ) $ (0.02 ) $ (0.02 ) $ 0.02
Diluted (loss) income per common share $ (0.04 ) $ (0.02 ) $ (0.02 ) $ 0.02
Weighted average number of shares and equivalent sharesof common stock outstanding:
Basic 3,301,116 3,248,646 3,275,335 3,248,646
Diluted 3,453,217 3,400,641 3,413,723 3,405,946
*The condensed consolidated financial statements do not include all required disclosures, refer to the Form 10K for omitted disclosures.

Source: CTI Industries Corporation



This article appears in: News Headlines

Referenced Stocks: CTIB


Latest News Video





Most Active by Volume

Company Last Sale Change Net / %
BAC $ 16.79 0.22 ▲ 1.33%
S $ 7 0.43 ▲ 6.54%
YHOO $ 42.88 1.62 ▲ 3.93%
AAPL $ 101.66 0.23 ▲ 0.23%
PBR $ 16.38 1.25 ▼ 7.09%
EBAY $ 52.19 1.51 ▲ 2.98%
MSFT $ 46.695 0.31 ▼ 0.65%
CSCO $ 25.16 0.02 ▼ 0.08%

As of 9/12/2014, 04:15 PM