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TMCNet:  CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2013

[March 25, 2014]

CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2013

(Marketwire Via Acquire Media NewsEdge) LAKE BARRINGTON, IL -- (Marketwired) -- 03/25/14 -- CTI Industries Corporation (NASDAQ: CTIB), 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, December 31, 2013 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 Three months ended Year ended December 31, 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 andequivalent 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 ============ ============ ============ ============ Source: CTI Industries Corporation

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