EX-99.1 2 v123319_ex99-1.htm Unassociated Document
Exhibit 99.1

NEWS RELEASE

FOR FURTHER INFORMATION CONTACT:

Stephen M. Merrick
 Catherine E. Lawler
Executive Vice President
 Investor Relations
(847) 382-1000
 (847) 671-1177
 
CTI Industries Corporation Reports
Second Quarter 2008 Financial Results

FOR IMMEDIATE RELEASE
Tuesday, August 12, 2008

BARRINGTON, IL, August 12, 2008 -- CTI Industries Corporation (CTIB - NASDAQ Capital Market), 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 2008 and for the six month period ended June 30, 2008.

Consolidated net sales for the second quarter of 2008 were $12,461,000 compared to consolidated net sales of $9,259,000 for the second quarter of 2007, an increase of 34.6%. The Company earned net income of $485,000 or $0.17 per share (basic and diluted) for the second quarter of 2008 compared to net income of $423,000 or $0.18 per share (basic) and $0.17 per share (diluted) for the second quarter of 2007.

For the six month period ended June 30, 2008, consolidated net sales were $23,196,000 compared to $17,538,000 for the same period in 2007, an increase of 32.3%. For this six month period in 2008, net income was $764,000 or $0.28 per share (basic) and $0.26 per share (diluted) compared to net income of $371,000, or $0.17 per share (basic) and $0.15 per share (diluted) for the same period of 2006.

Key Factors and Trends

The revenue increase in the second quarter and for the six months ended June 30, 2008 was led by flexible packaging and pouches, which almost tripled from revenues of $1,967,000 in the first six months of 2007 to $5,889,000 in the first six months of 2008. These increases were the result of sales to a new customer and of increased sales to an existing customer.

In the first six months of 2008, novelty product revenues were up 15.6% compared to the same period of 2007, from $11,236,000 in 2007 to $12,987,000 in 2008. Sales of laminated films also showed a modest increase compared to 2007 both for the second quarter and for the six months.

 
Gross profit increased from $2,744,000 in the second quarter of 2007 to $2,913,000 in the second quarter of 2008, and from $4,647,000 for the first six months of 2007 to $5,245,000 for the first six months of 2008. Gross margins rates were down from 29.6% in the second quarter of 2007 to 23.4% in the second quarter of 2008, and for the six month period were down from 26.5% in 2007 to 22.6% in 2008. This decline in gross margins is the result principally of significant increases in raw materials costs experienced by the company during the first six months of 2008 which have not yet been fully offset by increases in the selling prices of finished goods.

General, selling and administrative expenses were up in the second quarter, compared to the second quarter of 2007, by about $240,000, and were also up by a similar amount for the six months compared to 2007. As a percentage of sales, general, selling and administrative expenses were lower, representing 17.3% of sales in the second quarter of 2008, compared to 20.7% of sales in the second quarter of 2007. For the six month period, general, selling and administrative expenses were down from 20.6% in 2007 to 16.6% in 2008.

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 –
 
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CTI Industries Corporation and Subsidiaries
                          
Condensed Consolidated Balance Sheets
                          
 
    
June 30,
2008
    
December 31,
2007
              
                           
Assets
    
(Unaudited)
 
                  
Current Assets:
                          
Cash and cash equivalents
  
$
1,260,417
  
$
483,112
              
Accounts receivable, net
    
7,066,866
   
5,950,551
             
Inventories, net
    
10,301,316
   
9,700,618
             
Other current assets
    
1,634,694
   
1,666,420
             
Total current assets
    
20,263,293
   
17,800,701
             
                           
Property, plant and equipment, net
    
10,320,567
   
10,096,155
             
Other assets
    
1,349,604
   
1,427,279
             
                           
Total Assets
  
$
31,933,464
  
$
29,324,135
              
                           
Liabilities & Stockholders' Equity
                          
Total current liabilities
  
$
16,744,898
  
$
16,483,109
              
Long term debt, less current maturities
    
5,627,833
   
5,167,039
             
Other liabilities
    
1,033,732
   
1,070,151
             
Minority interest
    
12,798
   
12,534
             
Stockholders' equity
    
8,514,203
   
6,591,302
             
                           
Total Liabilities & Stockholders' Equity
  
$
31,933,464
  
$
29,324,135
              
                           
                           
                           
Consolidated Statements of Operations
                          
 
  
Three Months Ended June 30
  
Six Months Ended June 30
  
     
2008
    
2007
    
2008
    
2007
  
 
    
(Unaudited)
    
(Unaudited)
 
  
(Unaudited)
 
  
(Unaudited
 
                           
Net sales
  
$
12,460,945
  
$
9,258,828
  
$
23,195,646
  
$
17,537,702
  
Cost of sales
    
9,548,061
   
6,514,432
   
17,951,083
   
12,890,619
 
                           
Gross profit
    
2,912,884
   
2,744,396
   
5,244,563
   
4,647,083
 
                           
Operating expenses
    
2,158,074
   
1,918,204
   
3,850,048
   
3,627,132
 
                           
Income from operations
    
754,810
   
826,192
   
1,394,515
   
1,019,951
 
                           
Other income (expense):
                          
Net Interest expense
    
(286,404
)
  
(292,914
)
  
(556,665
)
  
(627,498
)
Other
    
11,889
   
41,175
   
42,211
   
93,347
 
                           
Income before income taxes and minority interest
    
480,295
   
574,453
   
880,061
   
485,800
 
                           
Income tax (benefit) expense
   
(4,818
)
  
151,293
   
115,839
   
114,886
 
                           
Income before minority interest
    
485,113
   
423,160
   
764,222
   
370,914
 
                           
Minority interest in (loss) income of subsidiary
    
(24
)
  
(35
)
  
264
   
(69
)
                           
Net income
  
$
485,137
  
$
423,195
  
$
763,958
  
$
370,983
  
                           
Basic income per common and common equivalent shares
  
$
0.17
  
$
0.18
  
$
0.28
  
$
0.17
  
                           
Diluted income per common and common equivalent shares
  
$
0.17
  
$
0.17
  
$
0.26
  
$
0.15
  
                           
Weighted average number of shares and equivalent shares
                          
of common stock outstanding:
                          
Basic
    
2,781,025
   
2,303,371
   
2,721,646
   
2,230,670
 
                           
Diluted
    
2,929,548
   
2,540,729
   
2,885,783
   
2,507,219
 
 
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