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| 8-K - FORM 8-K - Yunhong CTI Ltd. | v462846_8k.htm |
EXHIBIT 99.1
NEWS RELEASE
CTI Industries Corporation Reports
Results for Full Year and Fourth Quarter 2016
Record Sales and Record Fourth Quarter Results
FOR IMMEDIATE RELEASE
March 28, 2017
BARRINGTON, IL, Tuesday, March 28, 2017 -- CTI Industries Corporation (NASDAQ: CTIB), a manufacturer and marketer of novelty balloons, vacuum and flexible packaging and storage products and printed and laminated films, today announced its full-year results of operations for 2016, as well as for the three months ended December 31, 2016.
Highlights of year-end and fourth quarter include:
| • | The Company had record sales both for the year and fourth quarter. For the year, net sales were $64,268,000 and for the fourth quarter net sales were $21,437,000, both the highest on record for those periods. |
| • | Fourth quarter profits were the highest for any quarter in CTI’s history, reaching $909,000 or Twenty-five cents per share. |
| • | Income from operations for the year were $2,840,000. |
| • | EBITDA reached $4.5 million for the year. |
Fourth Quarter Results
Consolidated net sales for the fourth quarter of 2016 were $21,437,000 compared to consolidated net sales of $15,888,000 for the fourth quarter of 2015, an increase of almost 35%. For the fourth quarter of 2016, CTI had net income of $909,000, $0.25 per share (basic) and $0.24 (diluted), compared to net income of $502,000 for the fourth quarter of 2015, $0.15 per share (basic and diluted).
Year-End Results
For the year, CTI had consolidated net sales of $64,268,000 compared to consolidated net sales in 2015 of $59,365,000, an increase of 8.3%. Income from operations for the year was $2,840,000 compared to income from operations in 2015 of $2,817,000. Net income for the year was $653,000 or $0.18 per share (basic and diluted) compared to $1,047,000 for 2015 which represented $0.32 per share (basic) and $0.30 per share (diluted). Net income for the year was affected by an income tax provision of $703,000 in 2016 compared to an income tax provision of $370,000 in 2015.
Key Factors and Trends
Revenues from the sale of vacuum sealing products increased substantially during 2016. Total net revenues from the sale of those products reached $17,455,000 in 2016 compared to 13,206,000 in 2015, a 32.2% increase. Of this total, $7.85 million represented sales to one retail chain for a promotional program in November, 2016.
Revenues from the sale of foil balloons increased to $26,530,000 in 2016 compared to $25,187,000 in 2015, a 5.3% increase. The increase in sales was distributed throughout our markets in the U.S., Canada, Mexico, the United Kingdom, Europe and Latin America.
Sales of film products increased by 7.4% from $4,523,000 in 2015 to $4,856,000 in 2016.
Sales of latex balloons were down for the year from $9,739,000 to $8,250,000. However, our Mexico operation installed a new production machine in the third quarter which will increase capacity by approximately 30%.
Revenues from the sale of a mix of other products increased from $6,710,000 in 2015 to $7,177,000 in 2016. These other products include sales of home container and organization products through a network of independent distributors, sales of “Candy Blossoms” and “Candy Loons and sales of party goods in Mexico.
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 is one of the leading manufacturers and marketers of foil and latex balloons, develops, produces and markets vacuum sealing systems for household use and produces laminated and printed films for commercial uses. CTI also distributes products for home organization and storage, Candyblossoms and, in Mexico, party goods. CTI markets its products throughout the United States and in a number of other countries.
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.
CONTACT:
Investor Relations
Stanley Brown, 847-620-1330
sbrown@ctiindustries.com
| – FINANCIAL HIGHLIGHTS FOLLOW – |
| CTI Industries Corporation and Subsidiaries |
| Condensed Consolidated Balance Sheets |
| December 31, 2016 | December 31, 2015 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents (VIE $51,000 and $82,000, respectively) | $ | 563,043 | $ | 346,404 | ||||
| Accounts receivable, (less allowance for doubtful | ||||||||
| accounts of $137,000 and $126,000 respectively) (VIE $6,000 and $4,000, respectively) | 14,838,978 | 11,410,999 | ||||||
| Inventories, net (VIE $719,000 and $1,264,000, respectively) | 18,348,011 | 17,869,911 | ||||||
| Net deferred income tax asset | 773,007 | 761,096 | ||||||
| Prepaid expenses and other current assets (VIE $18,000 and $50,000, respectively) | 1,209,358 | 2,048,761 | ||||||
| Total current assets | 35,732,397 | 32,437,171 | ||||||
| Total property, plant and equipment, net (VIE $125,000 and $462,000, respectively) | 5,311,388 | 6,553,555 | ||||||
| Total other assets (VIE $440,000 and $440,000, respectively) | 2,932,406 | 2,814,243 | ||||||
| TOTAL ASSETS | $ | 43,976,191 | $ | 41,804,969 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Total current liabilities (VIE $640,000 and $1,697,000, respectively) | $ | 23,942,036 | $ | 20,200,675 | ||||
| Total long-term liabilities, less current maturities (VIE $454,000 and $0, respectively) | 8,056,578 | 9,015,270 | ||||||
| Total Liabilities | 31,998,614 | 29,215,945 | ||||||
| Total CTI Industries Corporation stockholders' equity | 12,717,393 | 12,787,487 | ||||||
| Noncontrolling Interest | (739,816 | ) | (198,463 | ) | ||||
| Total Equity | 11,977,577 | 12,589,024 | ||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 43,976,191 | $ | 41,804,969 | ||||
| CTI Industries Corporation and Subsidiaries |
| Condensed Consolidated Statements of Operations |
| Year ended December 31, | Three months ended December 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net sales | $ | 64,268,367 | $ | 59,364,701 | $ | 21,436,712 | $ | 15,887,720 | ||||||||
| Cost of sales | 47,149,360 | 43,013,345 | 15,488,321 | 11,150,342 | ||||||||||||
| Gross profit | 17,119,007 | 16,351,356 | 5,948,391 | # | 4,737,378 | |||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 7,378,296 | 7,134,385 | 1,907,773 | 1,833,967 | ||||||||||||
| Selling | 4,748,061 | 3,510,824 | 1,585,978 | 1,085,147 | ||||||||||||
| Advertising and marketing | 2,189,620 | 2,889,609 | 545,767 | 883,966 | ||||||||||||
| Gain on sale of assets | (36,745 | ) | - | (9,045 | ) | - | ||||||||||
| Total operating expenses | 14,279,232 | 13,534,818 | 4,030,473 | 3,803,080 | ||||||||||||
| Income from operations | 2,839,775 | 2,816,538 | 1,917,918 | 934,298 | ||||||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense, net | (1,558,225 | ) | (1,541,740 | ) | (304,669 | ) | (504,574 | ) | ||||||||
| Other | 43,263 | 32,470 | (34,077 | ) | (14,759 | ) | ||||||||||
| Total other expense | (1,514,962 | ) | (1,509,270 | ) | (338,746 | ) | (519,333 | ) | ||||||||
| Income before income taxes and noncontrolling interest | 1,324,813 | 1,307,268 | 1,579,172 | 414,965 | ||||||||||||
| Income tax expense | 702,877 | 369,596 | 719,681 | (16,917 | ) | |||||||||||
| Net income | 621,936 | 937,672 | 859,491 | 431,882 | ||||||||||||
| Less: Net (loss) income attributable to noncontrolling interest | (30,602 | ) | (109,661 | ) | (49,690 | ) | (69,907 | ) | ||||||||
| Net income attributable to CTI Industries Corporation | $ | 652,538 | $ | 1,047,333 | $ | 909,181 | $ | 501,789 | ||||||||
| Income applicable to common shares | $ | 652,538 | $ | 1,047,333 | $ | 909,181 | $ | 501,789 | ||||||||
| Other Comprehensive (Loss) Income | ||||||||||||||||
| Foreign currency adjustment | (1,517,560 | ) | (1,175,106 | ) | (677,416 | ) | (165,119 | ) | ||||||||
| Comprehensive (loss) income attributable to CTI Industries Corporation | $ | (865,022 | ) | $ | (127,773 | ) | $ | 231,765 | $ | 336,670 | ||||||
| Basic income per common share | $ | 0.18 | $ | 0.32 | $ | 0.25 | $ | 0.15 | ||||||||
| Diluted income per common share | $ | 0.18 | $ | 0.30 | $ | 0.24 | $ | 0.15 | ||||||||
| Weighted average number of shares and | ||||||||||||||||
| equivalent shares of common stock outstanding: | ||||||||||||||||
| Basic | 3,566,400 | 3,297,448 | 3,566,613 | 3,297,969 | ||||||||||||
| Diluted | 3,727,568 | 3,437,140 | 3,727,568 | 3,437,691 | ||||||||||||
| CTI Industries Corporation and Subsidiaries |
| EBITDA |
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Reconciliation from Net Income to EBITDA | ||||||||||||||||
| Net Income (Loss) | $ | 909,180 | $ | 501,790 | $ | 652,538 | $ | 1,047,333 | ||||||||
| Depreciation and amortization | 312,343 | 439,254 | 1,591,720 | 1,925,965 | ||||||||||||
| Interest expense | 310,849 | 546,679 | 1,554,329 | 1,614,574 | ||||||||||||
| Income taxes (benefit) | 719,681 | (16,918 | ) | 702,877 | 369,596 | |||||||||||
| Total net adjustments | 1,342,873 | 969,015 | 3,848,926 | 3,910,135 | ||||||||||||
| EBITDA | $ | 2,252,053 | $ | 1,470,805 | $ | 4,501,464 | $ | 4,957,468 | ||||||||