EX-99 2 v044230_ex99.htm
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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