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):     August 21, 2006

CTI INDUSTRIES CORPORATION 

(Exact name of registrant as specified in its charter)

Illinois	0-23115	36-2848943
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 August 21, 2006, CTI Industries Corporation issued a press release reporting earnings and other financial results for its second quarter ended June 30, 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 August 21, 2006, captioned: “CTI Industries Corporation Reports Increased Revenues and Profits for the Second Quarter of 2006”

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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
	(Registrant)
Date:  August 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	Catherine E. Lawler
Executive Vice President	Investor Relations
(847) 382-1000	(847) 671-1177

CTI Industries Corporation

Reports Increased Revenues and Profits

For the Second Quarter of 2006

FOR IMMEDIATE RELEASE

Monday, August 21, 2006

BARRINGTON, IL, August 21, 2006 -- CTI Industries Corporation (NASDAQ Small Cap - CTIB), a manufacturer and marketer of metalized balloons, latex balloons, novelty items, packaging and storage bags and pouches and printed and laminated films, today released financial results for its second quarter and for the six months ending June 30, 2006. For the quarter, net sales were $8,997,000, compared to net sales for the second quarter of 2005 of $7,573,000, an increase of 18.8%. The Company achieved a net profit for the quarter of $206,000 compared to a net loss for the same period in 2005 of $(54,000).

Net income per share for the three months ending June 30, 2006 was $0.10 (basic) and $0.09 (diluted), compared to a net loss per share for the three months ending June 30, 2005 of $(0.03) (basic and diluted).

For the six month period ending June 30, 2006, net revenues were $17,153,000, compared to net revenues for the same period in 2005 of $16,676,000, an increase of 2.9%. For the six month period, the Company had net income of $425,000, representing earnings per share of $0.21 (basic) and $0.19 (diluted), compared to net income of $31,000 for the same period of 2005 which represented earnings per share of $0.02 (basic and diluted).

“Our results so far this year have been quite strong both in terms of revenues and profits,” reported Howard Schwan, President. “We have experienced substantial increases in our revenues from the sale of novelty products and we have solidified our relationship with two of our major customers for film and pouch products through long-term contracts with both of them.”

“Over the past several quarters, we have been able to achieve both growth in revenue and improvement in margins, with the result that we have now had three consecutive profitable quarters,” said Stephen Merrick, Executive Vice President and Chief Financial Officer.

CTI Industries is one of the leading manufacturers and marketers of metalized and latex balloons. CTI also develops, produces and markets bags and pouches for storage and packaging applications and produces laminated and printed films for commercial uses. CTI markets its products throughout the United States and in a number of other countries.

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
Condensed Consolidated Balance Sheet
	June 30, 2006		December 31, 2005
Assets	(Unaudited)
Current Assets:
Cash and cash equivalents	$	627,866	$	261,982
Accounts receivable, net		5,609,233		4,343,671
Inventories, net		7,808,240		7,022,569
Other current assets		603,041		707,082
Total current assets		14,648,380		12,335,304
Property, plant and equipment, net		9,062,340		9,616,744
Other assets		1,712,535		1,584,002
Total Assets	$	25,423,255	$	23,536,050
Liabilities & Stockholders' Equity
Total current liabilities	$	14,063,466	$	14,761,388
Long term debt, less current maturities		6,000,310		4,394,390
Other liabilities		1,658,305		1,644,339
Minority interest		11,027		10,091
Stockholders' equity		3,690,147		2,725,842
Total Liabilities & Stockholders' Equity	$	25,423,255	$	23,536,050

Consolidated Statements of Operations

	Quarter Ended June 30,						Six Months Ended June 30
	2006			2005			2006			2005
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net sales	$	8,996,935		$	7,572,626		$	17,153,158		$	16,675,953
Cost of sales		6,799,824			5,989,672			13,002,732			13,219,006
Gross profit		2,197,111			1,582,954			4,150,426			3,456,947
Operating expenses		1,593,620			1,478,552			3,005,981			3,025,832
Income from operations		603,491			104,402			1,144,445			431,115
Other income (expense):
Net Interest expense		(431,426	)		(281,727	)		(762,049	)		(587,107	)
Other		43,009			162,072			90,554			220,651
Income before income taxes and minority interest		215,074			(15,253	)		472,950			64,659
Income tax expense		9,423			38,191			47,611			33,712
Income (loss) before minority interest		205,651			(53,444	)		425,339			30,947
Minority interest in (loss) of subsidiary		(48	)		171			(128	)		75
Net income	$	205,699		$	(53,615	)	$	425,467		$	30,872
Basic income (loss) per common and common equivalent shares	$	0.10		$	(0.03	)	$	0.21		$	0.02
Diluted income (loss) per common and common equivalent shares	$	0.09		$	(0.03	)	$	0.19		$	0.02
Weighted average number of shares and equivalent shares
of common stock outstanding:
Basic		2,053,311			1,954,100			2,044,939			1,954,100
Diluted		2,171,524			1,954,100			2,198,436			1,974,222