Exhibit 99
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
Stephen M. Merrick | Mary Ellen Dammyer | |||
Executive Vice President | Investor Relations | |||
(847) 382-1000 | (847) 382-1000 |
CTI Industries Corporation Reports
First Quarter 2006 Financial Results
FOR IMMEDIATE RELEASE
Friday, May 19, 2006
BARRINGTON, IL, May 19, 2006 -- CTI Industries Corporation (NASDAQ Capital Market), a manufacturer and marketer of novelty balloons, printed and laminated films and flexible packaging and storage products, today announced its results of operations for the first quarter of 2006.
Consolidated net sales for the first quarter of 2006 were $8,156,000, compared to consolidated net sales of $9,103,000 for the first quarter of 2005. The Company had net income of $220,000 or $0.11 per share (basic) and $0.10 per share (diluted) for the first quarter of 2006 compared to a net income of $84,000 or $0.04 per share (basic and diluted) for the first quarter of 2005.
Key Factors and Trends
With the exception of lower sales for the quarter to one customer for laminated film compared to sales to that customer for the first quarter last year, net sales for the first quarter of 2006 kept pace with the same quarter of 2005. Sales for balloon products increased by about 2.4% compared to the first quarter of 2005.
Gross margins improved from 20.6% in the first quarter of 2005 to 23.9% in the first quarter of 2006, and gross profit on sales increased from $1,874,000 in the first quarter of 2005 to $1,953,000 in the first quarter of 2006. Income from operations was $541,000 in the first quarter of 2006, compared to $327,000 for the same period of 2005.
During the first quarter 2006, the Company completed a re-financing of its bank loans and also received subordinated loans of $1,000,000 from two principal shareholders. As a result, as of March 31, 2006, the Company had working capital of $663,000 compared to a working capital deficit of $2,426,000 as of December 31, 2005.
In addition, in March and April, 2006, the Company entered into term contracts with two principal customers for laminated films and pouches.
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.
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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 Sheet | |||||||
March 31, 2006 | December 31, 2005 | ||||||
Assets | (Unaudited) | ||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 640,212 | $ | 261,982 | |||
Accounts receivable, net | 5,545,875 | 4,343,671 | |||||
Inventories, net | 7,335,640 | 7,022,569 | |||||
Other current assets | 561,449 | 707,082 | |||||
Total current assets | 14,083,176 | 12,335,304 | |||||
Property, plant and equipment, net | 9,293,202 | 9,616,744 | |||||
Other assets | 1,709,135 | 1,584,002 | |||||
Total Assets | $ | 25,085,513 | $ | 23,536,050 | |||
Liabilities & Stockholders' Equity | |||||||
Total current liabilities | $ | 13,419,845 | $ | 14,761,388 | |||
Long term debt, less current maturities | 6,596,452 | 4,394,390 | |||||
Other liabilities | 1,637,723 | 1,644,339 | |||||
Minority interest | 10,171 | 10,091 | |||||
Stockholders' equity | 3,421,322 | 2,725,842 | |||||
Total Liabilities & Stockholders' Equity | $ | 25,085,513 | $ | 23,536,050 | |||
Consolidated Statements of Operations | |||||||
Quarter Ended March 31, | |||||||
2006 | 2005 | ||||||
(Unaudited) | (Unaudited) | ||||||
Net sales | $ | 8,156,223 | $ | 9,103,327 | |||
Cost of sales | 6,202,908 | 7,229,334 | |||||
Gross profit on sales | 1,953,315 | 1,873,993 | |||||
Operating expenses | 1,412,361 | 1,547,281 | |||||
Income from operations | 540,954 | 326,712 | |||||
Other income (expense): | |||||||
Interest expense | (330,623 | ) | (305,380 | ) | |||
Other | 47,545 | 58,580 | |||||
Income before income taxes and minority interest | 257,876 | 79,912 | |||||
Income tax expense | 38,188 | (4,479 | ) | ||||
Income (loss) before minority interest | 219,688 | 84,391 | |||||
Minority interest in (loss) of subsidiary | (80 | ) | (95 | ) | |||
Net income | $ | 219,768 | $ | 84,486 | |||
Income (loss) applicable to common shares | $ | 219,768 | $ | 84,486 | |||
Basic income (loss) per common and common equivalent shares | $ | 0.11 | $ | 0.04 | |||
Diluted income (loss) per common and common equivalent shares | $ | 0.10 | $ | 0.04 | |||
Weighted average number of shares and equivalent shares of common stock outstanding: | |||||||
Basic | 2,036,474 | 1,954,100 | |||||
Diluted | 2,166,892 | 1,970,360 |
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