8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 19, 2006

CTI INDUSTRIES CORPORATION

(Exact name of registrant as specified in its charter)

Illinois	0-23115	36-2848943
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

22160 North Pepper Road, Barrington, IL	60010
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (847) 382-1000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item No. 2.02 - Results of Operations and Financial Condition

On May 19, 2006, CTI Industries Corporation issued a press release reporting earnings and other financial results for its first quarter ended March 31, 2006. A copy of the Press Release is attached as Exhibit 99.

Item No. 9.01 - Exhibit

(c)	The following exhibit is attached hereto:
Exhibit No.	Exhibit
99	Press Release dated May 19, captioned: “CTI Industries Corporation Reports First Quarter 2006 Financial Results”

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CTI Industries Corporation
Date: May 24, 2006	By:	/s/ Howard W. Schwan
		Howard W. Schwan, President

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EX-99

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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