8-12-13 6:30 AM EDT | Email Article
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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.

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Morningstar - 2013/8/12 - CTI Industries Corporation Reports Second Quarter 2013 Financial Results
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