BARRINGTON, IL--(Marketwire - April 30, 2010) - CTI Industries Corporation (
Consolidated net sales for the first quarter of 2010 were $12,411,000 compared to consolidated net sales of $9,603,000 for the first quarter of 2009, representing an increase of over 29%. The Company earned net income of $599,000 or $0.22 per share (basic) and $0.21 per share (diluted) for the first quarter of 2010 which is more than six times net income of $93,000 or $0.03 per share (basic and diluted) for the first quarter of 2009.
The Company will host a conference call to discuss first quarter results with investors. The conference call will be held on April 30, 2010 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The dial-in telephone number for the call is 800-829-2707. The participant passcode is 5469991. A replay of the call will be available from April 30, 2010 through May 30, 2010 by dialing 888-203-1112. The replay passcode is 5469991.
Key Factors and Trends
First quarter 2010 results reflected strong sales in both the novelty balloon and pouch product lines.
Sales of pouch products were up 208% from $986,000 in the first quarter 2009 to $3,041,000 in the first quarter of 2010. Most of this increase was a reflection of strong continuing sales of zippered vacuumable pouches to a principal customer. Sales of CTI's proprietary ZipVac™ line of vacuumable pouches also increased.
Novelty product revenues were up 18.6%, from $6,580,000 in the first quarter of 2009 to $7,804,000 in the first quarter of 2010. Sales of laminated films showed a modest decline from $1,876,000 in the first quarter of 2009 to $1,367,000 in the first quarter of 2010.
Gross margins increased to 24.5% in the first quarter of 2010 compared to 21.5% for the first quarter of 2009. This increase is the result of (i) increased production and sales volume during the first quarter of 2010 resulting in lower unit cost than in the same period of 2009 and (ii) a change in the mix of products sold to certain novelty and pouch products having a higher margin.
Bank Financing
On April 29, 2010, the Company entered into a Credit Agreement with Harris N.A. (the "Bank") under which the Bank agreed to extend to the Company a credit facility in the aggregate amount of $14,417,000. The facility includes a Revolving Credit of up to $9,000,000, an Equipment Loan of up to $2,500,000, a Mortgage Loan of $2,333,350 and a Term Loan of $583,333. The maturity date on the loans is April 29, 2013. Closing of the Agreement and the loan transactions provided for in the Agreement is anticipated to be concluded on April 30, 2010. Proceeds of the loans will be utilized for the repayment of all outstanding loan and capital lease obligations of the Company to RBS Citizens N.A. and RBS Asset Finance in the aggregate amount of approximately $11,000,000, and for working capital purposes and for the purchase of capital equipment.
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.
-- FINANCIAL HIGHLIGHTS FOLLOW --
| CTI Industries Corporation and Subsidiaries | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| March 31, 2010 | December 31, 2009 | ||||||||||
| Assets | (Unaudited) | ||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 678,517 | $ | 870,446 | |||||||
| Accounts receivable, net | 8,694,793 | 7,320,181 | |||||||||
| Inventories, net | 10,124,880 | 9,643,914 | |||||||||
| Other current assets | 1,304,642 | 1,313,881 | |||||||||
| Total current assets | 20,802,832 | 19,148,422 | |||||||||
| Property, plant and equipment, net | 9,231,630 | 9,533,411 | |||||||||
| Other assets | 1,790,315 | 1,713,476 | |||||||||
| Total Assets | $ | 31,824,777 | $ | 30,395,309 | |||||||
| Liabilities & Equity | |||||||||||
| Total current liabilities | $ | 18,414,732 | $ | 16,734,520 | |||||||
| Long term debt, less current maturities | 3,641,674 | 4,881,568 | |||||||||
| Stockholders' equity | 9,711,245 | 8,762,663 | |||||||||
| Noncontrolling interest | 57,126 | 16,558 | |||||||||
| Total Liabilities & Equity | $ | 31,824,777 | $ | 30,395,309 | |||||||
| Consolidated Statements of Operations | |||||||||||
| Three Months Ended March 31 | |||||||||||
| 2010 | 2009 | ||||||||||
| (Unaudited) | (Unaudited) | ||||||||||
| Net sales | $ | 12,410,766 | $ | 9,603,422 | |||||||
| Cost of sales | 9,366,194 | 7,536,919 | |||||||||
| Gross profit | 3,044,572 | 2,066,503 | |||||||||
| Operating expenses | 2,084,516 | 1,604,755 | |||||||||
| Income from operations | 960,056 | 461,748 | |||||||||
| Other (expense) income: | |||||||||||
| Net Interest expense | (244,073 | ) | (295,551 | ) | |||||||
| Other | (13,223 | ) | (21,598 | ) | |||||||
| Income before income taxes and noncontrolling interest | 702,760 | 144,599 | |||||||||
| Net Income | 116,359 | 50,158 | |||||||||
| Income before noncontrolling interest | 586,401 | 94,441 | |||||||||
| Less: Net income (loss) attributable to noncontrolling interest | (12,443 | ) | 1,234 | ||||||||
| Net income attributable to CTI Industries Corporation | $ | 598,844 | $ | 93,207 | |||||||
| Income applicable to common shares | $ | 598,844 | $ | 93,207 | |||||||
| Basic income per common share | $ | 0.22 | $ | 0.03 | |||||||
| Diluted income per common share | $ | 0.21 | $ | 0.03 | |||||||
| Weighted average number of shares and equivalent shares of common stock outstanding: | |||||||||||
| Basic | 2,769,002 | 2,808,720 | |||||||||
| Diluted | 2,793,863 | 2,825,482 | |||||||||