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

• Press Release
• Source: CTI Industries Corporation
• On 7:00 am EDT, Tuesday March 31, 2009

BARRINGTON, IL--(MARKET WIRE)--Mar 31, 2009 -- CTI Industries Corporation (NasdaqCM:CTIB - News), 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.

Related Quotes Symbol Price Change CTIB 2.05 -0.05 {"s" : "ctib","k" : "c10,l10,p20,t10","o" : "","j" : ""}

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
                        ===========  ===========  ===========  ===========

     FOR FURTHER INFORMATION CONTACT:
      
     Stephen M. Merrick
     Executive Vice President
     (847) 382-1000
      
     Catherine E. Lawler
     Investor Relations
     (847) 671-1177