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

November 15, 2010 | About:
10qk

10qk

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CTI Industries Corp. (CTIB) filed Quarterly Report for the period ended 2010-09-30.

Cti Industries Corp. has a market cap of $20.18 million; its shares were traded at around $6.47 with a P/E ratio of 10.78 and P/S ratio of 0.49. The dividend yield of Cti Industries Corp. stocks is 1.55%.

Highlight of Business Operations:

During the three months ended September 30, 2010, there were two 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 September 30, 2010 were $2,347,000 or 21.4% and $2,250,000 or 20.5% of consolidated net sales, respectively. Sales to the top three customers in the same period of 2009 were $1,792,000 or 17.6%, $1,533,000 or 15.1% and $1,676,000 or 16.5% of consolidated net sales, respectively. During the nine months ended September 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 nine months ended September 30, 2010 were $9,573,000 or 26.3%, $5,305,000 or 14.6%, and $4,575,000 or 12.6% of consolidated net sales, respectively. Sales to these customers in the same period of 2009 were $7,941,000 or 26.0%, $5,042,000 or 16.5%, and $3,117,000 or 10.2% of consolidated net sales, respectively. As of September 30, 2010, the total amount owed to the Company by these customers was $1,750,000 or 23.1%, $1,256,000 or 16.6%, and $288,000 or 3.8% of the Company s consolidated accounts receivables. The amounts owed at September 30, 2009 were $935,000, or 14.8%, $1,046,000, or 16.5%, and $906,000 or 14.3% of the Company s consolidated net accounts receivables, respectively.

General and Administrative. During the three months ended September 30, 2010, general and administrative expenses were $1,239,000 or 11.3% of net sales, compared to $1,047,000 or 10.3% of net sales for the same period in 2009. During the nine months ended September 30, 2010, general and administrative expenses were $3,808,000 or 10.5% of net sales, compared to $3,387,000 or 11.1% 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 administrative salaries of $214,000 (ii) an increase in corporate legal expense of $132,000 and (iii) administrative expenses of $112,000 incurred at our Europe subsidiary.

Selling. During the three months ended September 30, 2010, selling expenses were $113,000 or 1.0% of net sales, compared to $221,000 or 2.2% of net sales for the same period in 2009. During the nine months ended September 30, 2010, selling expenses were $671,000 or 1.8% of net sales, compared to $602,000 or 2.0% 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 $38,000, and (ii) selling expenses of $30,000 incurred in our Europe subsidiary.

Advertising and Marketing. During the three months ended September 30, 2010, advertising and marketing expenses were $389,000 or 3.5% of net sales for the period, compared to $404,000 or 4.0% of net sales for the same period of 2009. During the nine months ended September 30, 2010, advertising and marketing expenses were $1,330,000 or 3.7% of net sales for the period, compared to $1,213,000 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 $57,000 and (ii) servicing fees for in-store servicing of balloon inventories in two retail accounts.

Net Income. For the three months ended September 30, 2010, the Company had net income of $243,000 or $0.08 per share (basic and diluted), compared to net income of $205,000 for the same period of 2009 or $0.07 per share (basic and diluted). For the nine months ended September 30, 2010, the Company had net income of $1,449,000 or $0.49 per share (basic and diluted), compared to net income of $707,000 for the same period of 2009 or $0.25 per share (basic and diluted).

Significant changes in working capital items during the nine months ended September 30, 2010 consisted of (i) an increase in accounts receivable of $137,000, (ii) an increase in inventories of $791,000, (iii) depreciation and amortization in the amount of $1,561,000, (iv) an increase in trade payables of $256,000, (v) an increase in accrued liabilities of $298,000, and (vi) an increase of $79,000 in prepaid expenses and other assets.

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