LAKE BARRINGTON, IL--(Marketwired - Nov 11, 2015) - CTI Industries Corporation (
- Net Income for the nine month period ended September 30, 2015 reached $546,000, or $0.17 per share, more than four times the net profit for the same period last year of $132,000 or $0.04 per share.
- EBITDA for the nine month period ended September 30, 2015 was $3,487,000, an increase of 33% over EBITDA for the same period of 2014 of $2,616,000.
- Gross margin continued to expand reaching 26.7% for the nine months ended September 30, 2015 compared to 24.1% for the same period last year.
For the quarter, the Company had net sales of $14,881,000 and net income of $209,000 or Six Cents per share. Sales increased for the quarter by 2.1% over the third quarter 2014 net sales of $14,569,000.
For the nine months ended September 30, 2015, the Company had net sales of $43,477,000, an increase of just under 2% over net sales for the same period of 2014 of $42,649,000. Net profit for the nine months reached $546,000, or $0.17 per share, compared to $132,000, or $0.04 per share, for the same period last year.
Key Factors and Trends
A significant factor in the improved performance for the third quarter this year is the increase in the gross margin rate achieved. For the third quarter this year, the gross margin rate reached 27.6% compared to a gross margin rate of 25.7% for the same period last year. For the nine months ended September 30, 2014, the gross margin rate was 26.7% compared to 24.1% for that period last year.
Revenues from the sale of vacuum sealing systems have continued to improve at a strong pace so far this year. In the nine months ended September 30, 2015, revenues of this product line have increased by almost 10% to $9,446,000 from $8,599,000 for the same period last year.
While revenues from the sale of latex balloons and foil balloons have declined moderately so far this year, much of that decline is attributable to the fact that a significant portion of our sales of these products are denominated in Mexican pesos and the Euro which have declined in value during 2015, resulting in a decline in the Dollar value of these sales.
Revenues from the sale of a mix of other products have increased this year. These other products include (i) sales of home container products by a variable interest entity which the Company now consolidates with its financial results, (ii) sales of a line of "Candy Blossoms" and "Candy Loons" consisting of candy and small inflated balloons sold to retail outlets in small containers and (iii) the sale of accessories and supply items related to balloon products. For the nine months ended September 30, 2015, revenues from the sale of these other products were $4,914,000 compared to $2,655,000 for the same period last year.
Non-GAAP Measures
To provide additional information regarding the Company's results, we have disclosed in this press release EBITDA (Earnings Before Interest Taxes Depreciation and Amortization). The Company defines EBITDA as earnings (loss) before net interest, other expense, taxes, depreciation and amortization expense. The Company has included EBITDA as a supplemental financial measure in this press release because it is a key measure used by management and the board of directors to understand and evaluate the core operating performance of the Company, to prepare budgets and operating plans, and because management believes such measure provides useful information in understanding and evaluating the Company's operating results. However, use of EBITDA as an analytic tool has its limitations and you should not consider this measure in isolation or as a substitute for analysis of the Company's financial results as reported under GAAP. A reconciliation to the closest GAAP statement of this non-GAAP measure is contained in the accompanying tables.
About CTI
CTI Industries Corporation, headquartered in Lake Barrington, Illinois, designs, develops, produces, markets and sells lines of foil balloons, vacuum sealing machines, pouches and related items for the storage of food and other household items, latex balloons and commercial film products. CTI markets its products throughout the United States, Canada, Mexico, the United Kingdom and Europe and in Latin America.
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. The Company's actual results and future developments could differ materially from the results or developments expressed in, or implied by these forward-looking statements. Factors that could cause results to differ from those contemplated by such forward looking statements, include, but are not limited to, product demand and market acceptance, competition, cost and availability of raw materials, new technology or product developments and other risks 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, 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 | ||||||||
| September 30, 2015 | *December 31, 2014 | |||||||
| Assets | (Unaudited) | |||||||
| Current Assets: | ||||||||
| Cash and cash equivalents (VIE $104,000 and $14,000, respectively) | $ | 272,543 | $ | 150,332 | ||||
| Accounts receivable, net (VIE $334,000 and $9,000 respectively) | 10,121,243 | 11,286,797 | ||||||
| Inventories, net (VIE $805,000 and $699,000, respectively) | 17,702,378 | 17,755,300 | ||||||
| Other current assets (VIE $211,000 and $68,000, respectively) | 2,759,153 | 3,281,497 | ||||||
| Total current assets | 30,855,317 | 32,473,926 | ||||||
| Property, plant and equipment, net (VIE $468,000 and $557,000, respectively) | 6,713,375 | 7,755,527 | ||||||
| Other assets (VIE $665,000 and $487,000, respectively) | 2,987,766 | 2,817,457 | ||||||
| Total Assets | $ | 40,556,458 | $ | 43,046,910 | ||||
| Liabilities & Equity | ||||||||
| Total current liabilities (VIE $1,833,000 and $742,000, respectively) | $ | 19,371,007 | $ | 20,929,377 | ||||
| Long term debt, less current maturities (VIE $8,000 and $322,000, respectively) | 8,866,818 | 9,310,164 | ||||||
| CTI Industries Corporation stockholders' equity | 12,260,151 | 12,880,171 | ||||||
| Noncontrolling interest | 58,482 | (72,802 | ) | |||||
| Total Liabilities & Equity | $ | 40,556,458 | $ | 43,046,910 | ||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Net sales | $ | 14,880,820 | $ | 14,569,309 | $ | 43,476,981 | $ | 42,648,515 | ||||||||||
| Cost of sales | 10,775,500 | 10,824,765 | 31,863,004 | 32,380,526 | ||||||||||||||
| Gross profit | 4,105,320 | 3,744,544 | 11,613,977 | 10,267,989 | ||||||||||||||
| Operating expenses | 3,392,474 | 3,225,560 | 9,731,738 | 9,478,754 | ||||||||||||||
| Income (loss) from operations | 712,846 | 518,984 | 1,882,239 | 789,235 | ||||||||||||||
| Other (expense) income: | ||||||||||||||||||
| Net Interest expense | (345,008 | ) | (235,682 | ) | (1,037,166 | ) | (742,150 | ) | ||||||||||
| Other | 43,932 | 8,049 | 47,230 | 5,568 | ||||||||||||||
| Net (loss) income before taxes | 411,770 | 291,351 | 892,303 | 52,653 | ||||||||||||||
| Income tax expense (benefit) | 161,280 | 122,202 | 386,514 | 36,299 | ||||||||||||||
| Net (loss) income | 250,490 | 169,149 | 505,789 | 16,354 | ||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interest | 41,237 | (40,366 | ) | (39,754 | ) | (116,096 | ) | |||||||||||
| Net income (loss) attributable to CTI Industries Corporation | $ | 209,253 | $ | 209,515 | $ | 545,543 | $ | 132,450 | ||||||||||
| Net income (loss) applicable to common shares | $ | 209,253 | $ | 209,515 | $ | 545,543 | $ | 132,450 | ||||||||||
| Other Comprehensive (Loss) Income | ||||||||||||||||||
| Foreign currency adjustment | (547,475 | ) | (363,410 | ) | (1,009,986 | ) | (552,014 | ) | ||||||||||
| Comprehensive (loss) income | $ | (338,222 | ) | $ | (153,895 | ) | $ | (464,443 | ) | $ | (419,564 | ) | ||||||
| Basic income (loss) per common share | $ | 0.06 | $ | 0.06 | $ | 0.17 | $ | 0.04 | ||||||||||
| Diluted income (loss) per common share | $ | 0.06 | $ | 0.06 | $ | 0.16 | $ | 0.04 | ||||||||||
| Weighted average number of shares and equivalent shares | ||||||||||||||||||
| of common stock outstanding: | ||||||||||||||||||
| Basic | 3,301,116 | 3,301,116 | 3,301,116 | 3,284,023 | ||||||||||||||
| Diluted | 3,446,808 | 3,450,344 | 3,447,938 | 3,436,124 | ||||||||||||||
*The condensed consolidated financial statements do not include all required disclosures, refer to the Form 10K for omitted disclosures.
| CTI Industries Corporation and Subsidiaries | |||||||||||||
| EBITDA | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Reconciliation from Net Income to EBITDA | |||||||||||||
| Net Income (Loss) | $ | 209,253 | $ | 209,515 | $ | 545,543 | $ | 132,450 | |||||
| Depreciation and amortization | 474,321 | 552,964 | 1,486,712 | 1,686,697 | |||||||||
| Interest expense | 350,960 | 241,218 | 1,067,895 | 760,602 | |||||||||
| Income taxes (benefit) | 161,280 | 122,202 | 386,514 | 36,299 | |||||||||
| Total net adjustments | 986,561 | 916,384 | 2,941,121 | 2,483,598 | |||||||||
| EBITDA | $ | 1,195,814 | $ | 1,125,899 | $ | 3,486,664 | $ | 2,616,048 | |||||