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):  March 23, 2016

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 March 23, 2016, CTI Industries Corporation issued a press release reporting earnings and other financial results for its three and twelve month periods ended December 31, 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 March 23, 2016, captioned: “CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2015.”

*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: March 23, 2016	By:	/s/ Stephen M. Merrick
		Stephen M. Merrick, President

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated March 23, 2016, captioned: “CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2015.”

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EX-99.1

EXHIBIT 99.1

NEWS RELEASE

CTI Industries Corporation Reports

Results for Full Year and Fourth Quarter 2015

Record Sales; Profits Double

FOR IMMEDIATE RELEASE

March 23, 2016

BARRINGTON, IL, Wednesday, March 23, 2016 -- CTI Industries Corporation (NASDAQ Capital Market), a manufacturer and marketer of novelty balloons, vacuum and flexible packaging and storage products and printed and laminated films, today announced its full-year results of operations for 2015, as well as for the three months ended December 31, 2015.

Highlights of year-end results include:

· Net Income more than doubled from $514,000 in 2014 to $1,047,000 in 2015. Per share income increased from $0.16 ($0.15 fully diluted) in 2014 to $0.32 ($0.30 fully diluted) in 2015.

· Net sales rose to the highest level in CTI’s 40-year history to almost $60 million. Net sales in 2015 were $59,365,000 compared to net sales in 2014 of $57,828,000.

· EBITDA reached $5 million for the year, the highest ever for CTI. In 2015, EBITDA was $4,957,000 compared to EBITDA of $4,036,000 in 2014.

Fourth Quarter Results

Consolidated net sales for the fourth quarter of 2015 were $15,888,000 compared to consolidated net sales of $15,180,000 for the fourth quarter of 2014. For the fourth quarter of 2015, CTI had net income of $502,000, $0.15 per share (basic and diluted), compared to net income of $382,000 for the fourth quarter of 2014, $0.12 per share (basic) and $0.11 per share (diluted).

Key Factors and Trends

Gross margin levels increased from 24.6% in 2014 to 27.5% in 2015. This increase resulted from (i) an increase in the sale of certain higher margin products, including sales of home container products and (ii) production efficiencies resulting from a reduction in factory overhead expenses.

Cash flow from operations increased substantially during 2015 and reached almost $2,600,000 for the year.

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Revenues from the sale of foil balloons and vacuum sealing products increased modestly in 2015; revenues from the sale of latex balloons declined by about 16%. On a unit basis, sales of both foil and latex balloons increased in 2015 over 2014. However, revenues from the sale of these products were negatively affected by currency exchange rate changes, particularly the decline of the Mexican peso and the Euro. With respect to latex balloons, changes in currency exchange rates negatively affected the Dollar value of latex balloon sales by approximately $2.1 million.

Revenues from the sale of a mix of other products almost doubled from $3,408,000 in 2014 to $6,709,000 in 2015. These other products include sales of home container and organization products through a network of independent distributors and sales of “Candy Blossoms” and “Candy Loons.”

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 is one of the leading manufacturers and marketers of foil and latex balloons, develops, produces and markets vacuum sealing systems for household use and produces laminated and printed films for commercial uses.  CTI markets its products throughout the United States and in a number of other countries.

Statements made in this release that are not historical facts are “forward-looking” statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) 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. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. 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.

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CONTACT:

Investor Relations

Stanley Brown, 847-620-1330

sbrown@ctiindustries.com

– FINANCIAL HIGHLIGHTS FOLLOW –

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CTI Industries Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	December 31, 2015			December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents (VIE $82,000 and $14,000, respectively)	$	346,404		$	150,332
Accounts receivable, (less allowance for doubtful
accounts of $126,000 and $230,000 respectively) (VIE $4,000 and $9,000, respectively)		11,410,999			11,286,797
Inventories, net (VIE $1,264,000 and $699,000, respectively)		17,869,911			17,755,300
Net deferred income tax asset		761,096			718,694
Prepaid expenses and other current assets (VIE $50,000 and $68,000, respectively)		2,048,761			2,562,803
Total current assets		32,437,171			32,473,926
Total property, plant and equipment, net (VIE $462,000 and $557,000, respectively)		6,553,555			7,755,527
Total other assets (VIE $440,000 and $440,000, respectively)		2,814,243			2,817,457
TOTAL ASSETS	$	41,804,969		$	43,046,910
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities  (VIE $1,697,000 and $742,000, respectively)	$	20,200,675		$	20,929,377
Total long-term liabilities, less current maturities (VIE $0 and $322,000, respectively)		9,015,270			9,310,164
Total Liabilities		29,215,945			30,239,541
Total CTI Industries Corporation stockholders' equity		12,787,487			12,880,171
Noncontrolling Interest		(198,463	)		(72,802	)
Total Equity		12,589,024			12,807,369
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	41,804,969		$	43,046,910

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CTI Industries Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

	Year ended December 31,						Three months ended December 31,
	2015			2014			2015			2014
Net sales	$	59,364,701		$	57,828,200		$	15,887,720		$	15,179,684
Cost of sales		43,013,345			43,623,666			11,150,342			11,243,139
Gross profit		16,351,356			14,204,534			4,737,378			3,936,545
Operating expenses:
General and administrative		7,134,385			7,231,243			1,833,967			1,732,408
Selling		3,510,824			3,041,937			1,085,147			708,414
Advertising and marketing		2,889,609			2,322,172			883,966			675,777
Loss on sale of assets		-			-
Other (income)		-			-
Asset Impairment Loss		-			-
Total operating expenses		13,534,818			12,595,352			3,803,080			3,116,599
Income from operations		2,816,538			1,609,182			934,298			819,946
Other (expense) income:
Interest expense, net		(1,541,740	)		(1,109,301	)		(504,574	)		(367,151	)
Other		32,470			39,367			(14,759	)		33,800
Total other expense		(1,509,270	)		(1,069,934	)		(519,333	)		(333,351	)
Income before income taxes and noncontrolling interest		1,307,268			539,248			414,965			486,595
Income tax expense		369,596			189,967			(16,917	)		153,668
Net income		937,672			349,281			431,882			332,927
Less: Net (loss) income attributable to noncontrolling interest		(109,661	)		(165,037	)		(69,907	)		(48,940	)
Net income attributable to CTI Industries Corporation	$	1,047,333		$	514,318		$	501,789		$	381,867
Income applicable to common shares	$	1,047,333		$	514,318		$	501,789		$	381,867
Other Comprehensive (Loss) Income
Foreign currency adjustment		(1,175,106	)		(647,711	)		(165,119	)		(95,697	)
Comprehensive (loss) income attributable to CTI Industries Corporation	$	(127,773	)	$	(133,393	)	$	336,670		$	286,170
Basic income per common share	$	0.32		$	0.16		$	0.15		$	0.12
Diluted income per common share	$	0.30		$	0.15		$	0.15		$	0.11
Weighted average number of shares and
equivalent shares of common stock outstanding:
Basic		3,297,448			3,288,332			3,297,969			3,301,116
Diluted		3,437,140			3,439,427			3,437,691			3,448,406

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CTI Industries Corporation and Subsidiaries

EBITDA

	Three Months Ended					Year Ended
	December 31,					December 31,
	2015			2014		2015		2014
Reconciliation from Net Income to EBITDA
Net Income (Loss)	$	501,790		$	381,868	$	1,047,333	$	514,318
Depreciation and amortization		439,254			513,463		1,925,965		2,200,160
Interest expense		546,679			370,839		1,614,574		1,131,441
Income taxes (benefit)		(16,918	)		153,668		369,596		189,967
Total net adjustments		969,015			1,037,970		3,910,135		3,521,568
EBITDA	$	1,470,805		$	1,419,838	$	4,957,468	$	4,035,886

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