EXHIBIT 99
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
Stephen M. Merrick Tim Dilsaver
Executive Vice President Investor Relations
(847) 382-1000 (847) 382-1000
CTI Industries Reports Major Gains in Income
for Its First Quarter 2004
FOR IMMEDIATE RELEASE
Monday, May 17, 2004
BARRINGTON, IL, May 17, 2004 -- CTI Industries Corporation (NASDAQ Small Cap -
CTIB), a manufacturer and marketer of metalized balloons, latex balloons,
novelty items and printed and laminated films, today released financial results
for its first quarter ending March 31, 2004. For the quarter, net sales were
$10,893,984 an increase of 7.2% over 2003 first quarter revenues of $10,162,495.
The Company realized net income of $371,901 for the quarter, compared to a loss
for the first quarter of 2003 of $(657,961).
Income per share for the quarter was $0.19 ($0.18 diluted), compared to a loss
of $(0.36) per share (basic and diluted) for the first quarter of 2003.
"We are very pleased with our strong results for the first quarter of this
year," said Stephen Merrick, Executive Vice President and Chief Financial
Officer of the Company. "We maintained good sales volume in each of our product
lines, with a nice increase in our latex balloon line. We achieved solid
profitability based on some improvement in margins coupled with reduced
expenses," he said.
"During the first quarter of this year, we achieved good control over our costs
and maintained our sales volume. This is a combination we will strive to
maintain, along with continued efforts to develop new sources of revenue," said
Howard Schwan, President.
This press release may contain forward-looking statements within the meaning of
Section 17A of the Securities Act and Section 21E of the Securities Exchange
Act. Actual results could differ materially from those projected in the
forward-looking statements, which involve a number of risks and uncertainties,
including (i) the risks of generating and maintaining sales in a highly
competitive market, (ii) the ability of the Company to enter into or maintain
contracts or relationships with customers, distributors, licensors and
suppliers, (iii) manufacturing risks, as well as other risks and uncertainties
reported by the Company in its SEC filings, and such statements should also be
considered in conjunction with cautionary statements contained in the Company's
most recent filing with the Securities and Exchange Commission on Form 10-K.
- FINANCIAL HIGHLIGHTS FOLLOW -
CTI Industries Corporation and Subsidiaries
Consolidated Balance Sheets
March 31, 2004 December 31, 2003
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ASSETS (Unaudited) (Audited)
Current assets:
Cash $ 331,189 $ 329,742
Accounts receivable, (less allowance for doubtful accounts of $ 186,215 6,129,142 4,620,276
and $223,220 respectively)
Inventories 9,168,518 9,263,160
Deferred tax assets 361,751 361,751
Prepaid expenses and other current assets 1,125,211 859,635
------------ ------------
Total current assets 17,115,810 15,434,564
Property and equipment:
Machinery and equipment 19,254,421 18,939,535
Building 2,714,301 2,678,581
Office furniture and equipment 1,872,593 1,931,831
Land 250,000 250,000
Leasehold improvements 587,034 582,052
Fixtures and equipment at customer locations 2,286,814 2,232,285
Projects under construction 319,592 408,961
------------ ------------
27,284,755 27,023,245
Less : accumulated depreciation (15,305,718) (14,815,596)
------------ ------------
Total property and equipment, net 11,979,036 12,207,649
Other assets:
Deferred financing costs, net 203,538 222,696
Goodwill 1,113,108 1,113,108
Deferred Income tax asset 803,449 1,012,365
Other assets 354,142 279,800
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Total other assets 2,474,237 2,627,969
------------ ------------
TOTAL ASSETS 31,569,083 30,270,182
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Consolidated Balance Sheets
March 31, 2004 December 31, 2003
-------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) (audited)
Current liabilities:
Checks written in excess of bank balance 529,703 341,108
Accounts payable 6,273,299 6,799,490
Line of credit 5,929,714 3,694,241
Notes payable - current portion 2,528,708 2,998,496
Notes payable - officer 0
Accrued liabilities 2,200,412 2,306,745
------------ ------------
Total current liabilities 17,461,837 16,140,080
Long-term liabilities:
Other liabilities 873,815 1,079,041
Notes payable 5,445,151 5,766,091
Notes payable - officers 2,111,999 2,064,126
------------ ------------
Total long-term liabilities 8,430,965 8,909,258
Minority interest 10,230 9,263
Stockholders' equity:
Common stock - no par value, 5,000,000 shares authorized, 2,150,216 and
2,141,882 shares issued, 1,918,420 and
1,910,086 shares outstanding, respectively 3,764,020 3,764,020
Class B Common stock - no par value, 500,000 shares authorized,
0 shares issued and outstanding 0 0
Paid-in-capital 5,554,332 5,554,332
Warrants issued in connection with subordinated debt and bank debt 595,174 595,174
Accumulated deficit (3,156,162) (3,528,063)
Accumulated other comprehensive earnings (152,199) (234,768)
Less:
Treasury stock - 231,796 shares (939,114) (939,114)
------------ ------------
Total stockholders' equity 5,666,051 5,211,581
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 31,569,083 $ 30,270,182
============ ============
CTI Industries Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Quarter Ended March 31,
2004 2003
------------ ------------
Net Sales $ 10,893,984 $ 10,162,495
Cost of Sales 8,746,614 8,225,442
------------ ------------
Gross profit on sales 2,147,370 1,937,053
Operating expenses:
Administrative 988,513 1,259,004
Selling 390,556 402,363
Advertising and marketing 393,484 588,894
------------ ------------
Total operating expenses 1,772,552 2,250,261
------------ ------------
Income from operations 374,817 (313,208)
Other income (expense):
Interest expense (331,136) (201,752)
Interest income -- 389
Gain (loss) on sale of assets -- --
Foreign currency (loss) gain 76,756 (108,506)
Other 486,896 (34,884)
------------ ------------
Total other income (expense) 232,516 (344,753)
------------ ------------
Income (loss) before income taxes and minority interest 607,333 (657,961)
Income tax (benefit) expense 233,456 34,245
------------ ------------
Income (loss) before minority interest 373,877 (692,206)
Minority interest in income (loss) of subsidiary 1,976 (2,418)
------------ ------------
Net income (loss) $ 371,901 $ (689,788)
============ ============
Income (loss) applicable to common shares $ 371,901 $ (689,788)
============ ============
Basic income (loss) per common share $ 0.19 $ (0.36)
============ ============
Diluted income (loss) per common share $ 0.18 $ (0.36)
============ ============
Weighted average number of shares and equivalent shares
of common stock outstanding:
Basic 1,918,420 1,917,772
============ ============
Diluted 2,044,501 1,917,772
============ ============