EX-99.1 2 v069472_ex99-1.htm
Exhibit 99.1

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
2006 Financial Results

FOR IMMEDIATE RELEASE
March 22, 2007

BARRINGTON, IL, March 22, 2007 -- 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 full-year results of operations for 2006, as well as for the three months ended December 31, 2006.

Year End Results

For the year ended December 31, 2006, consolidated net sales totaled $35,428,000 compared to consolidated net sales of $29,190,000 for the year ended December 31, 2005, an increase of 21.4%. For the year, CTI achieved net income of $1,895,000 or $0.91 per share (basic) and $0.85 per share (diluted). During the year ended December 31, 2005, CTI incurred a net loss of $333,000 or $(0.17) per share basic and diluted.

CTI’s net income for 2006 included net income before taxes of $1,122,000 and an income tax benefit of $774,000. Absent the income tax benefit, CTI’s earnings per share were $0.54 (basic) and $0.50 (diluted). The income tax benefit arose because of the determination by management of the Company to reduce the reserve previously taken against the Company’s deferred tax asset. This action was taken, and the tax benefit recorded, because of management’s determination that it is more likely than not that CTI will recover the recorded value of its deferred tax asset.

Fourth Quarter Results

Consolidated net sales for the fourth quarter of 2006 were $9,672,000 compared to consolidated net sales of $6,480,000 for the fourth quarter of 2005, an increase of 49.3%. CTI had net income of $1,154,000 or $0.54 per share (basic) and $0.49 per share (diluted) for the fourth quarter of 2006 compared to net income of $52,000 or $0.03 per share (basic) and $0.02 per share (diluted) for the fourth quarter of 2005. CTI’s income for the fourth quarter of 2006 included a tax benefit of $834,000. Absent the tax benefit, CTI’s earnings before tax for the fourth quarter were $319,000.

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Key Factors and Trends

During 2006, CTI experienced an increase in revenues of more than 21% over 2005 revenues. Most of that increase was derived from sales of metalized and latex balloons, although sales of commercial film products also increase by 10% during the year. CTI also achieved an increase in gross margins from 22.1% in 2005 to 25.1% in 2006.
 
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.

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
      
Consolidated Balance Sheets
      
 
   
December 31, 2006
  
December 31, 2005
  
ASSETS
              
Current assets:
              
Cash
  
$
384,565
  
$
261,982
  
Accounts receivable, (less allowance for doubtful accounts of $210,000 and $80,000 respectively)
    
6,442,765
   
4,343,671
 
Inventories, net
    
7,974,113
   
7,022,569
 
Prepaid expenses and other current assets
    
664,020
   
707,082
 
               
Total current assets
    
15,465,463
   
12,335,304
 
               
Total property, plant and equipment, net
    
8,592,274
   
9,616,744
 
               
Total other assets
    
2,576,212
   
1,584,002
 
               
TOTAL ASSETS
  
$
26,633,949
  
$
23,536,050
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Total current liabilities
    
14,643,374
   
14,761,388
 
Total long-term liabilities, less current maturities
    
6,886,968
   
6,038,729
 
               
Minority interest
    
12,672
   
10,091
 
               
Total stockholders' equity
    
5,090,935
   
2,725,842
 
               
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
  
$
26,633,949
  
$
23,536,050
  
 
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CTI Industries Corporation and Subsidiaries
                
Consolidated Statements of Operations
                
 
   
Year ended December 31,
  
Three months ended December 31,
  
   
2006
  
2005
  
2006
  
2005
  
                            
Net sales
  
$
35,428,156
  
$
29,189,974
  
$
9,672,264
  
$
6,480,189
  
Cost of sales
    
26,531,045
   
22,725,825
   
7,178,443
   
4,715,173
 
Gross profit
    
8,897,111
   
6,464,149
   
2,493,821
   
1,765,016
 
                           
Operating expenses:
                          
General and administrative
    
4,554,324
   
3,846,538
   
1,228,787
   
819,410
 
Selling
    
847,244
   
1,064,944
   
222,912
   
269,155
 
Advertising and marketing
    
1,200,782
   
776,571
   
354,551
   
174,226
 
Loss on sale of assets
    
144,936
         
2,959
       
Other (income)
   
(471,802
)
        
(11,507
)
      
Asset Impairment Loss
    
-
   
124,000
         
124,000
 
                           
Total operating expenses
    
6,275,484
   
5,812,053
   
1,797,702
   
1,386,791
 
                           
Income from operations
    
2,621,627
   
652,096
   
696,119
   
378,225
 
                           
Other income (expense):
                          
Interest expense
    
(1,690,825
)
  
(1,230,964
)
  
(414,311
)
  
(362,811
)
Other
    
191,270
   
45,128
   
36,888
   
(171,724
)
                           
Total other (expense)
   
(1,499,555
)
  
(1,185,836
)
  
(377,423
)
  
(534,535
)
                           
Income (loss) before income taxes and minority interest
    
1,122,072
   
(533,740
)
  
318,696
   
(156,310
)
                           
Income tax (benefit)
   
(774,195
)
  
(200,392
)
  
(833,525
)
  
(208,560
)
                           
Income (loss) before minority interest
    
1,896,267
   
(333,348
)
  
1,152,221
   
52,250
 
                           
Minority interest in income (loss) of subsidiary
    
1,517
   
(139
)
  
(1,597
)
  
64
 
                           
Net income (loss)
 
$
1,894,750
  
$
(333,209
)
$
1,153,818
  
$
52,186
  
                           
Income applicable to common shares
  
$
1,894,750
  
$
(333,209
)
$
1,153,818
  
$
52,186
  
                           
Basic income (loss) per common share
  
$
0.91
  
$
(0.17
)
$
0.54
  
$
0.03
  
                           
Diluted income (loss) per common share
  
$
0.85
  
$
(0.17
)
$
0.49
  
$
0.02
  
                           
Weighted average number of shares and equivalent shares of common stock outstanding:
                          
Basic
    
2,087,145
   
1,977,235
   
2,134,462
   
2,036,473
 
                           
Diluted
    
2,234,901
   
1,977,235
   
2,373,471
   
2,210,767
 
 
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