Attached files
| file | filename |
|---|---|
| 8-K - 8-K CURRENT REPORT - Yunhong CTI Ltd. | v372612_8k.htm |
EXHIBIT 99.1
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
| Stephen M. Merrick | ||
| President | Investor Relations | |
| (847) 382-1000 | (847) 620-1330 |
CTI Industries Corporation Reports
Results for Full Year and Fourth Quarter 2013
Record Sales and Increased Profits
FOR IMMEDIATE RELEASE
March 25, 2014
LAKE BARRINGTON, IL, March 25, 2014 -- CTI Industries Corporation (NASDAQ Capital Market), 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, 2013 | December 31, 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
| Year ended December 31, | Three months ended 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 and | ||||||||||||||||
| equivalent 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 | ||||||||||||