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CTI Industries Corp. Reports Operating Results (10-Q)

August 13, 2010 | About:
10qk

10qk

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CTI Industries Corp. (CTIB) filed Quarterly Report for the period ended 2010-06-30.

Cti Industries Corp. has a market cap of $17 million; its shares were traded at around $6.13 with a P/E ratio of 10.4 and P/S ratio of 0.4. The dividend yield of Cti Industries Corp. stocks is 1.6%.

Highlight of Business Operations:

During the three months ended June 30, 2010, there were three customers whose purchases represented more than 10% of the Company s consolidated net sales. The sales to each of these customers for the three months ended June 30, 2010 were $4,169,000 or 32.2%, $1,740,000 or 13.4%, and $1,498,000 or 11.6% of consolidated net sales, respectively. Sales of these customers in the same period of 2009 were $3,907,000 or 36.3%, $1,538,000 or 14.3%, and $1,003,000 or 9.3% of consolidated net sales, respectively. During the six months ended June 30, 2010, there were three customers whose purchases represented more than 10% of the Company s consolidated net sales. The sales to each of these customers for the six months ended June 30, 2010 were $7,323,000 or 28.9%, $3,854,000 or 15.2%, and $2,958,000 or 11.7% of consolidated net sales, respectively. Sales of these customers in the same period of 2009 were $6,407,000 or 31.4%, $1,441,000 or 7.1%, and $3,250,000 or 15.9% of consolidated net sales, respectively. As of June 30, 2010, the total amount owed to the Company by these customers was $2,408,000 or 30.0%, $839,000 or 10.4%, and $1,167,000 or 14.5% of the Company s consolidated accounts receivables. The amounts owed at June 30, 2009 were $1,969,000, or 29.8%, $515,000, or 7.8%, and $902,000 or 13.6% of the Company s consolidated net accounts receivables, respectively.

General and Administrative. During the three months ended June 30, 2010, general and administrative expenses were $1,308,000 or 10.1% of net sales, compared to $1,301,000 or 12.1% of net sales for the same period in 2009. During the six months ended June 30, 2010, general and administrative expenses were $2,568,000 or 10.1% of net sales, compared to $2,341,000 or 11.5% of net sales for the same period in 2009. The increase in general and administrative expenses compared to the corresponding period of 2009, is attributable to (i) an increase in legal expense of $145,000, and (ii) an increase in administrative expenses of $75,000 in Mexico by Flexo Universal, our subsidiary there.

Selling. During the three months ended June 30, 2010, selling expenses were $218,000 or 1.7% of net sales, compared to $204,000 or 1.9% of net sales for the same period in 2009. During the six months ended June 30, 2010, selling expenses were $559,000 or 2.2% of net sales, compared to $381,000 or 1.9% of net sales for the same period in 2009. The increase in selling expenses compared to the corresponding period of 2009, is attributable to (i) an increase in royalties expense of $41,000, and (ii) selling expenses of $95,000 incurred in our Europe subsidiary.

Advertising and Marketing. During the three months ended June 30, 2010, advertising and marketing expenses were $457,000 or 3.5% of net sales for the period, compared to $421,000 or 3.9% of net sales for the same period of 2009. During the six months ended June 30, 2010, advertising and marketing expenses were $941,000 or 3.7% of net sales for the period, compared to $809,000 or 4.0% of net sales for the same period of 2009. The increase in advertising and marketing expense is attributable to (i) increased compensation expense of $25,000 and (ii) servicing fees for in-store servicing of balloon inventories in two retail accounts.

Net Income. For the three months ended June 30, 2010, the Company had net income of $607,000 or $0.21 per share (basic) and $0.20 per share (diluted), compared to net income of $409,000 for the same period of 2009 or $0.15 per share (basic and diluted). For the six months ended June 30, 2010, the Company had net income of $1,206,000 or $0.43 per share (basic) and $0.42 per share (diluted), compared to net income of $502,000 for the same period of 2009 or $0.18 per share (basic and diluted).

Significant changes in working capital items during the six months ended June 30, 2010 consisted of (i) an increase in accounts receivable of $711,000, (ii) a decrease in inventories of $239,000, (iii) depreciation and amortization in the amount of $1,053,000, (iv) an increase in trade payables of $370,000, (v) an increase in accrued liabilities of $151,000, and (vi) an decrease of $98,000 in prepaid expenses and other assets.

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