CTI Industries Corporation: CTI Industries Corporation Reports Record Sales and Substantial Profit Increase for 2009

BARRINGTON, IL--(Marketwire - March 31, 2009) - CTI Industries Corporation (NASDAQ: [ CTIB ]), 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 2008, as well as for the three months ended December 31, 2008.

Year End Results

For the year ended December 31, 2008, consolidated net sales totaled $44,981,000 compared to consolidated net sales of $36,510,000 for the year ended December 31, 2007, an increase of 23.2%. For the year, CTI achieved net income of $1,154,000 or $0.42 per share (basic) and $0.40 per share (diluted). During the year ended December 31, 2007, CTI had a net income of $82,000, representing $0.03 per share (basic and diluted).

Fourth Quarter Results

Consolidated net sales for the fourth quarter of 2008 were $9,832,000 compared to consolidated net sales of $10,299,000 for the fourth quarter of 2007. CTI had net income of $121,000 or $0.04 per share (basic and diluted) for the fourth quarter of 2008 compared to net income of $125,000 or $0.05 per share (basic and diluted) for the fourth quarter of 2007.

Key Factors

During 2008, CTI experienced an increase in revenues of more than 23.2% over 2007 revenues. The largest component of that increase was the increase in sales of pouches for consumer applications. For the year, sales of pouches totaled $10,893,000 compared to $4,938,000 in 2007. Most of this increase resulted from sales of a vacuumable pouch product marketed by S.C. Johnson & Son, Inc. under their brand ZipLoc.

Sales of CTI's other product lines also increased during 2008:

 -- Metalized balloons increased by 10.2% from $15,998,000 in 2007 to $17,629,000 in 2008; -- Latex balloon sales increased by 10.9% from $6,853,000 in 2007 to $7,597,000 in 2008; -- Sales of commercial films increased by 4.7% from $7,846,000 in 2007 to $8,212,000 in 2008.

Gross margin levels declined in 2008 to 22.95% from 23.79% in 2007. This decline came principally as a result of increased costs of raw materials, including plastic sheeting, resin and latex. Toward the end of 2008 and into 2009, the cost of these raw materials has reduced significantly from the highest levels they reached during mid-2008.

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" 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 -

 CTI Industries Corporation and Subsidiaries Consolidated Balance Sheets December 31, December 31, 2008 2007 ------------ ------------ ASSETS Current assets: Cash $ 180,578 $ 483,112 Accounts receivable, (less allowance for doubtful accounts of $39,000 and $312,000 respectively) 5,821,593 5,950,551 Inventories, net 10,504,769 9,700,618 Net deferred income tax asset 674,872 1,014,451 Prepaid expenses and other current assets 506,225 651,969 ------------ ------------ Total current assets 17,688,037 17,800,701 Total property, plant and equipment, net 10,575,982 10,096,155 Total other assets 1,724,172 1,427,279 ------------ ------------ TOTAL ASSETS $ 29,988,191 $ 29,324,135 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities 16,222,180 16,483,109 Total long-term liabilities, less current maturities 6,018,655 6,237,190 Minority interest 12,756 12,534 Total stockholders' equity 7,734,600 6,591,302 ------------ ------------ TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 29,988,191 $ 29,324,135 ============ ============ CTI Industries Corporation and Subsidiaries Consolidated Statements of Operations Year ended Three months ended December 31, December 31, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Net sales $44,980,674 $36,509,710 $ 9,832,048 $10,299,283 Cost of sales 34,658,271 27,825,493 7,496,480 7,879,631 ----------- ----------- ----------- ----------- Gross profit 10,322,403 8,684,217 2,335,568 2,419,652 Operating expenses: General and administrative 5,375,526 5,211,470 1,311,912 1,288,897 Selling 886,391 753,571 176,195 161,277 Advertising and marketing 1,677,900 1,474,289 413,016 461,428 ----------- ----------- ----------- ----------- Total operating expenses 7,939,817 7,439,330 1,901,123 1,911,602 ----------- ----------- ----------- ----------- Income from operations 2,382,586 1,244,887 434,445 508,050 Other income (expense): Interest expense (1,031,457) (1,285,964) (232,146) (309,637) Other 50,003 173,510 (17,118) 8,028 ----------- ----------- ----------- ----------- Total other expense (981,454) (1,112,454) (249,264) (301,609) ----------- ----------- ----------- ----------- Income before income taxes and minority interest 1,401,132 132,433 185,181 206,441 Income tax expense 246,779 50,673 64,454 81,726 ----------- ----------- ----------- ----------- Income before minority interest 1,154,353 81,760 120,727 124,715 Minority interest in loss (income) of subsidiary 222 (138) (18) (35) ----------- ----------- ----------- ----------- Net income $ 1,154,131 $ 81,898 $ 120,745 $ 124,750 =========== =========== =========== =========== Income applicable to common shares $ 1,154,131 $ 81,898 $ 120,745 $ 124,750 =========== =========== =========== =========== Basic income per common share $ 0.42 $ 0.03 $ 0.04 $ 0.05 =========== =========== =========== =========== Diluted income per common share $ 0.40 $ 0.03 $ 0.04 $ 0.05 =========== =========== =========== =========== Weighted average number of shares and equivalent shares of common stock outstanding: Basic 2,763,017 2,346,126 2,808,720 2,555,580 =========== =========== =========== =========== Diluted 2,898,681 2,589,960 2,843,196 2,648,434 =========== =========== =========== ===========

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