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): November 11, 2015

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, 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 November 11, 2015, CTI Industries Corporation issued a press release reporting earnings and other financial results for its three and nine month period ended September 30, 2015. 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 November 11, 2015, captioned: “CTI Industries Corporation Reports Year to Date Profit Up Four Times over 2014.”

*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: November 11, 2015	By:	/s/ Stephen M. Merrick
		Stephen M. Merrick, President

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated November 11, 2015, captioned: “CTI Industries Corporation Reports Year to Date Profit Up Four Times over 2014.”

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EX-99.1

EXHIBIT 99.1

NEWS RELEASE

CTI Industries Corporation Reports

Year to Date Profit Up Four Times over 2014

FOR IMMEDIATE RELEASE

Wednesday, November 11, 2015

LAKE BARRINGTON, IL, November 11, 2015 -- 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 third quarter 2015 and for the nine months ended September 30, 2015. Highlights include:

· Net Income for the nine month period ended September 30, 2015 reached $546,000, or $0.17 per share, more than four times the net profit for the same period last year of $132,000 or $0.04 per share.

· EBITDA for the nine month period ended September 30, 2015 was $3,487,000, an increase of 33% over EBITDA for the same period of 2014 of $2,616,000.

· Gross margin continued to expand reaching 26.7% for the nine months ended September 30, 2015 compared to 24.1% for the same period last year.

For the quarter, the Company had net sales of $14,881,000 and net income of $209,000 or Six Cents per share. Sales increased for the quarter by 2.1% over the third quarter 2014 net sales of $14,569,000.

For the nine months ended September 30, 2015, the Company had net sales of $43,477,000, an increase of just under 2% over net sales for the same period of 2014 of $42,649,000. Net profit for the nine months reached $546,000, or $0.17 per share, compared to $132,000, or $0.04 per share, for the same period last year.

Key Factors and Trends

A significant factor in the improved performance for the third quarter this year is the increase in the gross margin rate achieved. For the third quarter this year, the gross margin rate reached 27.6% compared to a gross margin rate of 25.7% for the same period last year. For the nine months ended September 30, 2014, the gross margin rate was 26.7% compared to 24.1% for that period last year.

Revenues from the sale of vacuum sealing systems have continued to improve at a strong pace so far this year. In the nine months ended September 30, 2015, revenues of this product line have increased by almost 10% to $9,446,000 from $8,599,000 for the same period last year.

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While revenues from the sale of latex balloons and foil balloons have declined moderately so far this year, much of that decline is attributable to the fact that a significant portion of our sales of these products are denominated in Mexican pesos and the Euro which have declined in value during 2015, resulting in a decline in the Dollar value of these sales.

Revenues from the sale of a mix of other products have increased this year. These other products include (i) sales of home container products by a variable interest entity which the Company now consolidates with its financial results, (ii) sales of a line of “Candy Blossoms” and “Candy Loons” consisting of candy and small inflated balloons sold to retail outlets in small containers and (iii) the sale of accessories and supply items related to balloon products. For the nine months ended September 30, 2015, revenues from the sale of these other products were $4,914,000 compared to $2,655,000 for the same period last year.

Non-GAAP Measures

To provide additional information regarding the Company’s results, we have disclosed in this press release EBITDA (Earnings Before Interest Taxes Depreciation and Amortization). The Company defines EBITDA as earnings (loss) before net interest, other expense, taxes, depreciation and amortization expense. The Company has included EBITDA as a supplemental financial measure in this press release because it is a key measure used by management and the board of directors to understand and evaluate the core operating performance of the Company, to prepare budgets and operating plans, and because management believes such measure provides useful information in understanding and evaluating the Company’s operating results. However, use of EBITDA as an analytic tool has its limitations and you should not consider this measure in isolation or as a substitute for analysis of the Company’s financial results as reported under GAAP. A reconciliation to the closest GAAP statement of this non-GAAP measure is contained in the accompanying tables.

About CTI

CTI Industries Corporation, headquartered in Lake Barrington, Illinois, designs, develops, produces, markets and sells lines of foil balloons, vacuum sealing machines, pouches and related items for the storage of food and other household items, latex balloons and commercial film products. CTI markets its products throughout the United States, Canada, Mexico, the United Kingdom and Europe and in Latin America.

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. The Company’s actual results and future developments could differ materially from the results or developments expressed in, or implied by these forward-looking statements. Factors that could cause results to differ from those contemplated by such forward looking statements, include, but are not limited to, product demand and market acceptance, competition, cost and availability of raw materials, new technology or product developments and other risks 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, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

CONTACT:

Investor Relations

Stanley M. Brown

847-620-1399

sbrown@ctiindustries.com

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CTI Industries Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	September 30, 2015		*December 31, 2014
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents (VIE $104,000 and $14,000, respectively)	$	272,543	$	150,332
Accounts receivable, net (VIE $334,000 and $9,000 respectively)		10,121,243		11,286,797
Inventories, net (VIE $805,000 and $699,000, respectively)		17,702,378		17,755,300
Other current assets (VIE $211,000 and $68,000, respectively)		2,759,153		3,281,497
Total current assets		30,855,317		32,473,926
Property, plant and equipment, net (VIE $468,000 and $557,000, respectively)		6,713,375		7,755,527
Other assets (VIE $665,000 and $487,000, respectively)		2,987,766		2,817,457
Total Assets	$	40,556,458	$	43,046,910
Liabilities & Equity
Total current liabilities (VIE $1,833,000 and $742,000, respectively)	$	19,371,007	$	20,929,377
Long term debt, less current maturities (VIE $8,000 and $322,000, respectively)		8,866,818		9,310,164
CTI Industries Corporation stockholders’ equity		12,260,151		12,880,171
Noncontrolling interest		58,482		(72,802	)
Total Liabilities & Equity	$	40,556,458	$	43,046,910

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Condensed Consolidated Statements of Operations

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net sales	$	14,880,820		$	14,569,309		$	43,476,981		$	42,648,515
Cost of sales		10,775,500			10,824,765			31,863,004			32,380,526
Gross profit		4,105,320			3,744,544			11,613,977			10,267,989
Operating expenses		3,392,474			3,225,560			9,731,738			9,478,754
Income (loss) from operations		712,846			518,984			1,882,239			789,235
Other (expense) income:
Net Interest expense		(345,008	)		(235,682	)		(1,037,166	)		(742,150	)
Other		43,932			8,049			47,230			5,568
Net (loss) income before taxes		411,770			291,351			892,303			52,653
Income tax expense (benefit)		161,280			122,202			386,514			36,299
Net (loss) income		250,490			169,149			505,789			16,354
Less: Net (loss) income attributable to noncontrolling interest		41,237			(40,366	)		(39,754	)		(116,096	)
Net income (loss) attributable to CTI Industries Corporation	$	209,253		$	209,515		$	545,543		$	132,450
Net income (loss) applicable to common shares	$	209,253		$	209,515		$	545,543		$	132,450
Other Comprehensive (Loss) Income
Foreign currency adjustment		(547,475	)		(363,410	)		(1,009,986	)		(552,014	)
Comprehensive (loss) income	$	(338,222	)	$	(153,895	)	$	(464,443	)	$	(419,564	)
Basic income (loss) per common share	$	0.06		$	0.06		$	0.17		$	0.04
Diluted income (loss) per common share	$	0.06		$	0.06		$	0.16		$	0.04
Weighted average number of shares and equivalent shares
of common stock outstanding:
Basic		3,301,116			3,301,116			3,301,116			3,284,023
Diluted		3,446,808			3,450,344			3,447,938			3,436,124

*The condensed consolidated financial statements do not include all required disclosures, refer to the Form 10K for omitted disclosures.      

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	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Reconciliation from Net Income to EBITDA
Net Income (Loss)	$	209,253	$	209,515	$	545,543	$	132,450
Depreciation and amortization		474,321		552,964		1,486,712		1,686,697
Interest expense		350,960		241,218		1,067,895		760,602
Income taxes (benefit)		161,280		122,202		386,514		36,299
Total net adjustments		986,561		916,384		2,941,121		2,483,598
EBITDA	$	1,195,814	$	1,125,899	$	3,486,664	$	2,616,048

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