CTIB - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen. And welcome to the CTI Industries Corporation to host Conference Call to discuss 2018 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct the question-and-answer session and instructions will follow at that time [Operator Instructions].

As a reminder, this call is being recorded. the contain Securities as amended, Act regarding, other may XXA in including call and among the strategy of of things, conference forward-looking defined statements Section statements growth This strategy. business Company's XXXX as as forward-looking is the only the date Expressions which speak of identify statements statement made. on beyond are predicted some and of cannot Company's be are their risks subject forward-looking statements the of uncertainties, These to quantified and are and or control. based largely expectations a number which from materially differ set could results actual and underlying statements. developments contemplated in, forward-looking or those by, Future forth the these be of will the light prove risks assurance information In and uncertainties, can forward-looking no there to accurate. be that to I like introduce would host Mr. for now today’s conference, your Stephen Merrick, CEO.

begin. may You

Stephen Merrick

today thank morning. President; you conference CFO; Stan we Cesario, call. about our for and fourth And our am on Frank since weeks XXXX call been our last Relations. Good It’s here spoke Investor Jeff our Director with six of Brown, on Hyland, us the joining today. I quarter

will we on short this time. keep a during of period with So has brief transpired what specific the focus our commentary morning

for highest an orders XXth balloons in May, firms, history those forecast results all to well In of continued very a sales, $X trend home Strong in quarter and orders in March, of financial from month containers. promotion. drive thus larger which as we XXXX. our improved for far Friday for led balloons the and be supporting at few had Order activities into positive Then April sales candy nearly as will sales understand November February million caused that to foil sales Black sales March, was sales and total were than deferred. large by strong we generated consolidated other January management first much slow their a for contrast. steady sales our blossoms, our in evolving latex in sales the We clients. flow the Our inventory in temporarily due in broad in and surge

the development geographic discussed foundation product enhance product of we sales, about changes initiated suppliers under quarterly more results. manufacturing actions is include; plan quarter have further We expenses. in in in Principal personnel in drop we catalyze to manufacturing profitability, X% XXXX. business $X operations $XXX,XXX operating excited for a modest and and costs; to our XXXX, expected among fourth strengthen in improve of series remove nearly created are in first never footprint. we annualized quarter and wide-ranging believe I are our a a decline loss initiatives course machinery. a These cost the in impact that call, part more amount. of large the new due in Despite commencing program actions expand agreements; undertaken and in stress just operating which a efficiencies, we and will over these million any have reported are that the As we reductions to improved losses performance want than a supplier stabilized of in reflected was Mexico; similar These XXXX. efficient reductions and XXXX our initiation of quality, our on operations certain of and

initiative and apparent will reduction this the The new initiatives. will it cost more become beneficial be However, over next the quarters. impact our under to that is see realized encouraging of expect reductions several tangible we

ensure have profile, plant upon finest being As industry. called U.S. deliver balloon manager. quality we managed highest by to Memenga, our quality To new brand, initiative balloon. a our foil that must global we this continue brand grow our of and our we balloons we the elevate This in established builds end, Jeff on is finest our program previously program. embarked initiative, quality The

We and equipment, packaging new measures, equipment are approximately testing, personnel, upgrades, forecasting in totaling QC including million design. areas, $X in XXXX investments

I before confident turn year enough first Frank outlook Cesario, This time CFO, is operations. we XXXX. over provide of our to have the insight Finally, the pleased the our to any things for full I our meaningful to provide future am felt into

turn While operating XXXX uncertainties acknowledging compared generate Frank. that and and over full-year With industry, for and expenses in the when results. certain lower sales, expect challenges our to to said, we profitably higher remain to that business XXXX, net operate I'll conversation total

Frank Cesario

Good discuss performance X% last quarter. declined in from $X.X Steve. or Revenues To in million to the detail. million $XX quarter morning million first Thanks, our let's by more $XX.X everyone. first start, XXXX year's

stronger not Steve we March reduced customers approximately from and March, with this of would start of a half very first came We larger some first through related That the Mother's none that revenue. of been orders a a sales surge of Day January have May. slow continued their even our and in has February, and shows shifted in in into had with As of $X.X trend April. mentioned, But orders. have back larger quarter April, up million deferred the and strong helped

of offset operating The in and year's $X.X from net administrative, decline $XXX,XXX compared we the in to and advertising a quarter million higher XXXX. sales reported and of decline $X.X million of million Total was expenses As in XX.X% of net as million $X.X selling gross million costs quarter. Steve expenses. XXXX sales from expect first $XX,XXX to general declined last from net increase $X of $XX.X in XX.X% operating We part income XXXX. mentioned, in by marketing or revenues to of sales. led or in first by operations profit or Lower net $XXX,XXX from sales to to X% loss

quarter. in higher XXXX, quarter, rates for market was expense expect higher Interest increases to interest we up and last full first compared their from expense expense Our as levels. $XXX,XXX last trended to year interest year's due during year for and interest the the $XXX,XXX borrowing

have in in might rate we into to increase interest as a a credit moment, I'll our related temporary facility. In addition, get

per loss of XXXX, income $XX,XXX $XXX,XXX of net balances per had for or $XXX,XXX was to first we $XXX,XXX cash XX, compared compared of net or end XXXX. year. last as at $X.XX share March Our quarter to the in At quarter the $X.XX share

monthly difficulty] million over [technical funded recall As with facility, inventory our revolving supported note by two-part long credit as to With that a $X into to do years up million. revolving and that call to we five credit our we profile, being we’re not expect $XX and may is entered prior balances. cash repaid large you respect maintain receivables debt from facility term worth

today, I've since seen last CTI surplus November. than more As availability joining we have of

under not As will that XX, credit with the Company made was filing, up XXXX, XX-Q not in see you February. our as is compliance financial March covenants but in two some caused by of slow This facility. in ground enough. the March start January of our and

We’re lender, manner. currently with actions discussing an the and appropriate at that a optimistic are timely our reach we agreement can

Our liabilities under the as Jeff. to with call I'll And term things note the liabilities this turn that, $X.X have debt from penalty that credit charged, and to but of This been an Until includes in million into current us, X%. wanted reclassified some is comparatives behind charged that out. we not over has long-term may available. should may we impact insight what is long-term rate interest agreement provide not be to

Jeff Hyland

Thanks, Frank.

Friday January We And we’ve we Black the headwinds increase and the aggressively sales XXXX March. expenses experienced business. of November team, profitable in record sales framework While the in we sales February, of improving ongoing excluding with substantial together as responded and high other growth. anomaly sale, for in a to month the reduce initiatives are the came and achieved

aspects in had an reduction and our business. covering expense working expansion aggressive embarked has CTI balloon multifaceted our capabilities, multiple As we critical and ongoing sales discussed We’ve plan. and initiatives, capital of March, foil on a manufacturing of all initiative

program discussed, improving our expected cash Steve we We strategic continue [technical results. creates. full quality balloon the that seen the XXXX. in for about year flow our excited efforts financial We’ve significant QX of more a difficulty] to that finest impact and are early and impact with these Operationally, operating, advantages very of

Lake added Mexico. addition, in machine Flexo we’ve machines; Barrington; converting an In new one in and at two sister foil

should to XXXX. us give The critical of capacity be XX% output additional expect to fulfill by while to anticipated Guadalajara foil capacity. XX% higher us positioning and Given has by far, increase approximately Lake the foil the Barrington Thus installed, and new generated parts throughout new This capacity it quality XX%, fully approximately we are in additional operational we production total added production this in machine machine balloon week the balloon foil demand constraints capacity. is this in anticipate machines, the new efficiency increased and converting operating ramp production is resolving received. once capacity Guadalajara up

existing We’re also opportunities new pursuing specific customers. sales very with new significant and

some various regarding significant. in quotes with presentations projects varying of stages are scope, We quite and customers of

does for that higher forecast include sales wins Our sales from may emanate XXXX pipeline. our any not

We’re existing of currently geographies and product lines. and entails sales new it all across this robust reaches customers, and our pipeline that pursuing

and that range March, are forecast in of and in May. customers to broader We we our April sales in are several a increase finding receptive very are products, enjoying carrying resulting the

strategic product and investments that expand lines. also are making should We sales capabilities it on our

XXX% we've experienced example, in commissioned UK. new For added salesperson a

customer sales should balloon should breadth our creativity goods We’re worldwide a the increases new several responsiveness in expanding products offering relationship demonstrate and complementary our designs product other and increase Also, adding of open the to the with in and existing new we’re customers. process and with customers party up that process manufacturer our of of trends. that

our We intended concentration, that are market performance areas continue of to to address with comfortable line we’ll customer acquisitions as such extension demand. and becoming initiatives, and product increasingly the consider are

to Steve. acquisitions now strategic and over turn and we’ll things acquisitions. to-date, I'll on be and have passed We the continue analyzed opportunistic on other two

Stephen Merrick

you, Thank and Jeff. Frank

coalesces indicated, are as performance. our Jeff and comfortable As increasingly team drives new we our becoming

quarter. the We to achieve forward may in assistance early to That results please. have August we on in you are second expect our eagerly we your to Operator, our report. looking concludes reporting

Operator

Gargano]. we And from have Instructions] question a [Operator [Vincent

Your open. now is line

Unidentified Analyst

are new cost over million from So in the these XXXX? $X.X cuts, cuts Are continue cuts. these or

Stephen Merrick

have The for XXXX and that those new going on million, XXXX. implemented. profit been A reduction cuts cost program $X.X improvement were

Unidentified Analyst

that? beyond So am I these are the above cuts. and That’s way understanding additional

Stephen Merrick

them, correct. already of We’ve end XXXX of all I anticipate and some cuts QX. by of implemented the implement our That’s having

Unidentified Analyst

improvement have as cost plan million the minus you obviously process coming, that's noted? additional that's $X And

Stephen Merrick

the XXXX you initiative. are right, go we will benefit So the from have year. cumulative the complementary, as initiatives through see we separate that’s two so XXXX And you're

Unidentified Analyst

have level have purchases market question as of open restrictions. with confidence I you making But and you Next own team? your are know requirements guys I know periods. certain blackout open a there make is is a you money. comfortable to market purchases

Stephen Merrick

that’s that had been I can’t has certainly think already management we’ve for Well, taken the some some but and place individuals, team have considered. that something that speak I of

Frank Cesario

This think personally answer me look, will own going the But this finance a and do, I forward. spot is let directly -- is this I good company Frank, element, just it I more answer.

I blackout that you periods you. because with the and so just made. And good really would hard inclined feel as But you where to year end I is And agree linger. that, we’re with we to of am tend about yes, at statement for agree the know that

Unidentified Analyst

you I good But and sometimes team. have with I it shares you a like the bought -- of some you confidence, Merrick sense with know if I confidence, has renewed over up that's know, to see a know of I years. a just Stephen will. really you sign and followed Yes, excitement the ton

Stephen Merrick

Good point.

Unidentified Analyst

thank you. Great,

Operator

would this like turn for At I Instructions] over the remarks. back questions. I showing now am [Operator no further call to time, closing

Stephen Merrick

soon. and very I all as feel we’re report We in results Thank call about the day. forward have good able to our a for anticipated the you where to for you headed. said, quarter positive we today. very second very you and eagerly being And are we to where look participating Thank

Operator

Ladies and may participation program, your you conference. great the gentlemen, that in And now a thank you day. for disconnect. conclude today's have Everyone,

Yunhong Green CTI (YHGJ) 14 May 182018 Q1 Earnings call transcript