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 13, 2012
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, Lake 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:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ 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 13, 2012, CTI Industries Corporation issued a press release reporting earnings and other financial results for its three and six month periods ended June 30, 2012. A copy of the Press Release is attached as Exhibit 99.1.
The information disclosed under this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for the purposes of Section 18, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Item No. 9.01 – Financial Statements and Exhibits
(c) Exhibits:
| Exhibit No. | Exhibit | ||
| 99.1* | Press Release dated August 13, 2012, captioned: “CTI Industries Corporation Reports Second Quarter 2012 Financial Results.” |
*Filed herewith
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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 13, 2012 | By: | /s/ Howard W. Schwan | |
| Howard W. Schwan, President |
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Exhibit 99.1
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
| Stephen M. Merrick | ||
| Executive Vice President | Investor Relations | |
| (847) 382-1000 | (847) 620-1330 |
CTI Industries Corporation Reports
Second Quarter 2012 Financial Results
FOR IMMEDIATE RELEASE
Monday, August 13, 2012
LAKE BARRINGTON, IL, August 13, 2012 — CTI Industries Corporation (CTIB - NASDAQ Capital Market), a manufacturer and marketer of flexible packaging and storage products, laminated films and novelty balloons, today announced its results of operations for the second quarter of 2012 and for the six month period ended June 30, 2012.
Consolidated net sales for the second quarter of 2012 were $11,816,000 compared to consolidated net sales of $11,965,000 for the second quarter of 2011, a decrease of 1.2%. The Company had a net loss of $78,000 or $0.02 per share (basic and diluted) for the second quarter of 2012 compared to net income of $13,000 or $0.00 per share (basic and diluted) for the second quarter of 2011.
For the six month period ended June 30, 2012, consolidated net sales were $25,624,000 compared to $24,662,000 for the same period in 2011, an increase of 3.9%. For this six month period in 2012, net income was $311,000 or $0.10 per share (basic and diluted) compared to net income of $310,000, or $0.10 per share (basic and diluted) for the same period of 2011.
Key Factors and Trends
Gross margin rates in the second quarter and six months of 2012 were 19.9% and 21.3%, respectively. In the second quarter and six months of 2011, the gross margin rates were 17.3% and 18.4% respectively.
Net sales of foil balloons decreased by 1.2% in the second quarter compared to the same period of 2011, from $5,578,000 to $5,513,000. For the six month period, sales of foil balloons increased by 4.1% compared to the same period of 2011, from $11,977,000 to $12,465,000.
For the second quarter 2012, net sales of pouch products were down 1.5% from the second quarter 2011, from $1,707,000 in the second quarter 2011 to $1,682,000 in the second quarter 2012. For the six months ended June 30, 2012, pouch sales were $3,612,000 compared to $3,861,000 for the same period of 2011, a decrease of 6.4%. Pouch sales for the second quarter and the six months did not include significant sales of the new branded line of vacuum sealing machines or pouches which were first introduced in the first quarter 2012.
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During the second quarter 2012, sales of latex balloon products increased by 4.1% from $2,725,000 in the second quarter 2011 to $2,837,000. For the six month period, sales of latex balloons increased by 16% compared to the same period in 2011, from $4,821,000 to $5,591,000.
Operating expenses increased in both the second quarter 2012 and six months ended June 30, 2012 over the same periods in the prior year. As a percentage of revenues, operating expenses increased from 15.4% of sales in the six months ended June 30, 2011 to 17.9% of sales for the same period in 2012. This increase principally reflects our investment in infrastructure and personnel related to our new branded vacuum sealer and pouch line of products.
Statements made in this release that are not historical facts are “forward-looking” statements (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 Sheets | ||||||||
| June 30, 2012 | *December 31, 2011 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents (VIE $17,000 and $11,000, respectively) | $ | 261,148 | $ | 338,523 | ||||
| Accounts receivable, net | 5,673,609 | 7,091,194 | ||||||
| Inventories, net | 13,794,047 | 13,338,317 | ||||||
| Other current assets (VIE $98,000 and $93,000, respectively) | 2,501,269 | 2,532,935 | ||||||
| Total current assets | 22,230,073 | 23,300,969 | ||||||
| Property, plant and equipment, net | 8,579,742 | 8,843,909 | ||||||
| Other assets | 1,349,908 | 1,470,644 | ||||||
| Total Assets | $ | 32,159,723 | $ | 33,615,522 | ||||
| Liabilities & Equity | ||||||||
| Total current liabilities (VIE $94,000 and $91,000, respectively) | $ | 16,484,107 | $ | 17,688,994 | ||||
| Long term debt, less current maturities (VIE $638,000 and $687,000, respectively) | 3,860,523 | 4,171,033 | ||||||
| CTI Industries Corporation stockholders' equity | 11,918,301 | 11,860,768 | ||||||
| Noncontrolling interest | (103,208 | ) | (105,273 | ) | ||||
| Total Liabilities & Equity | $ | 32,159,723 | $ | 33,615,522 | ||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Net sales | $ | 11,816,448 | $ | 11,964,764 | $ | 25,623,592 | $ | 24,662,419 | ||||||||
| Cost of sales | 9,463,198 | 9,894,922 | 20,175,271 | 20,121,805 | ||||||||||||
| Gross profit | 2,353,250 | 2,069,842 | 5,448,321 | 4,540,614 | ||||||||||||
| Operating expenses | 2,340,507 | 1,920,130 | 4,592,815 | 3,792,472 | ||||||||||||
| Income from operations. | 12,743 | 149,712 | 855,506 | 748,142 | ||||||||||||
| Other (expense) income: | ||||||||||||||||
| Net Interest expense | (167,002 | ) | (144,035 | ) | (347,990 | ) | (283,241 | ) | ||||||||
| Other | 5,680 | 15,150 | 7,906 | 26,268 | ||||||||||||
| Net (loss) income before taxes | (148,579 | ) | 20,827 | 515,422 | 491,169 | |||||||||||
| Income tax (benefit) expense | (52,656 | ) | 35,472 | 202,275 | 240,901 | |||||||||||
| Net (loss) income | (95,923 | ) | (14,645 | ) | 313,147 | 250,268 | ||||||||||
| Less: Net (loss) gain attributable to noncontrolling interest | (18,375 | ) | (28,000 | ) | 2,066 | (60,195 | ) | |||||||||
| Net (loss) income attributable to CTI Industries Corporation | $ | (77,548 | ) | $ | 13,355 | $ | 311,081 | $ | 310,463 | |||||||
| Net (loss) income applicable to common shares | $ | (77,548 | ) | $ | 13,355 | $ | 311,081 | $ | 310,463 | |||||||
| Other Comprehensive (Loss) Income | ||||||||||||||||
| Foreign currency adjustment | (457,369 | ) | $ | (57,923 | ) | (299,193 | ) | $ | 394,708 | |||||||
| Comprehensive (loss) income | $ | (534,917 | ) | $ | (44,568 | ) | $ | 11,888 | $ | 705,171 | ||||||
| Basic (loss) income per common share | $ | (0.02 | ) | $ | 0.00 | $ | 0.10 | $ | 0.10 | |||||||
| Diluted (loss) income per common share | $ | (0.02 | ) | $ | 0.00 | $ | 0.10 | $ | 0.10 | |||||||
| Weighted average number of shares and equivalent shares of common stock outstanding: | ||||||||||||||||
| Basic | 3,207,244 | 3,137,848 | 3,205,875 | 3,137,842 | ||||||||||||
| Diluted | 3,240,559 | 3,187,779 | 3,238,795 | 3,193,213 | ||||||||||||
*The condensed consolidated financial statements do not include all required disclosures, refer to the Form 10K for omitted disclosures.
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