x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Illinois | 36-2848943 |
(State or other jurisdiction of | (I.R.S. Employer Identification Number) |
incorporation or organization) | |
22160 N. Pepper Road | |
Lake Barrington, Illinois | 60010 |
(Address of principal executive offices) | (Zip Code) |
Part I Financial Information | | |
| | |
Item No. 1. | Financial Statements | |
| Condensed Consolidated Interim Balance Sheet at September 30, 2013 (unaudited) and December 31, 2012 | 1 |
| Condensed Consolidated Interim Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2013 and September 30, 2012 | 2 |
| Condensed Consolidated Interim Statements of Cash Flows (unaudited) for the nine months ended September 30, 2013 and September 30, 2012 | 3 |
| Condensed Consolidated Interim Earnings per Share (unaudited) for the three and nine months ended September 30, 2013 and September 30, 2012 | 4 |
| Notes to Condensed Consolidated Financial Statements (unaudited) | 5 |
Item No. 2 | Management's Discussion and Analysis of Financial Condition and Results of Operations | 14 |
Item No. 3 | Quantitative and Qualitative Disclosures Regarding Market Risk | 22 |
Item No. 4 | Controls and Procedures | 22 |
Item No. 1 | Legal Proceedings | 22 |
Item No. 1A | Risk Factors | 22 |
Item No. 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 22 |
Item No. 3 | Defaults Upon Senior Securities | 22 |
| | |
Part II Other Information | | |
| | |
Item No. 4 | Submission of Matters to a Vote of Security Holders | 22 |
Item No. 5 | Other Information | 22 |
Item No. 6 | Exhibits | 23 |
| Signatures | |
| Exhibit 31.1 | |
| Exhibit 31.2 | |
| Exhibit 32 | |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (unaudited) | | | | | |
ASSETS | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents (VIE $29,000 and $22,000, respectively) | | $ | 332,490 | | $ | 351,064 | |
Accounts receivable, (less allowance for doubtful accounts of $173,000 and $99,000, respectively) | | | 9,424,104 | | | 7,773,332 | |
Inventories, net | | | 15,269,890 | | | 15,813,276 | |
Net deferred income tax asset | | | 882,612 | | | 846,371 | |
Prepaid expenses | | | 1,395,555 | | | 1,525,092 | |
Other current assets (VIE $76,000 and $108,000) | | | 590,097 | | | 820,619 | |
| | | | | | | |
Total current assets | | | 27,894,748 | | | 27,129,754 | |
| | | | | | | |
Property, plant and equipment: | | | | | | | |
Machinery and equipment (VIE $719,000 and $701,000, respectively) | | | 26,329,524 | | | 25,530,893 | |
Building | | | 3,498,517 | | | 3,360,017 | |
Office furniture and equipment | | | 3,272,812 | | | 3,137,123 | |
Intellectual property | | | 471,037 | | | 432,070 | |
Land | | | 250,000 | | | 250,000 | |
Leasehold improvements | | | 429,527 | | | 431,644 | |
Fixtures and equipment at customer locations | | | 2,784,419 | | | 2,784,419 | |
Projects under construction | | | 785,376 | | | 644,948 | |
| | | 37,821,212 | | | 36,571,114 | |
Less : accumulated depreciation and amortization | | | (29,239,528) | | | (27,872,044) | |
| | | | | | | |
Total property, plant and equipment, net | | | 8,581,684 | | | 8,699,070 | |
| | | | | | | |
Other assets: | | | | | | | |
Deferred financing costs, net | | | 212,783 | | | 216,292 | |
Goodwill | | | 1,033,077 | | | 1,033,077 | |
Net deferred income tax asset | | | 541,099 | | | 535,954 | |
Other assets (due from related party $25,000 and $19,000, respectively) | | | 156,794 | | | 132,996 | |
| | | | | | | |
Total other assets | | | 1,943,753 | | | 1,918,319 | |
| | | | | | | |
TOTAL ASSETS | | $ | 38,420,185 | | $ | 37,747,143 | |
| | | | | | | |
LIABILITIES AND EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Checks written in excess of bank balance | | $ | 158,017 | | $ | 517,089 | |
Trade payables (VIE $4,000 and $66,000, respectively) | | | 5,002,744 | | | 5,708,271 | |
Line of credit | | | 7,929,098 | | | 6,254,648 | |
Notes payable - current portion (net discount of $121,000 and $107,000, respectively) | | | | | | | |
(VIE $104,000 and $101,000, respectively) | | | 344,346 | | | 354,342 | |
Notes payable - officers, current portion | | | - | | | 1,123,742 | |
Notes payable affiliates - current portion | | | 8,770 | | | 8,113 | |
Capital lease - current portion | | | 29,973 | | | - | |
Accrued liabilities (VIE $12,000 and $31,000, respectively) | | | 2,705,237 | | | 2,997,242 | |
| | | | | | | |
Total current liabilities | | | 16,178,185 | | | 16,963,447 | |
| | | | | | | |
Long-term liabilities: | | | | | | | |
Notes payable - affiliates | | | 129,324 | | | 141,052 | |
Notes payable, net of current portion (net discount of $463,000 and $555,000, respectively) | | | | | | | |
(VIE $455,000 and $533,000, respectively) | | | 7,582,607 | | | 7,839,351 | |
Capital lease | | | 117,487 | | | - | |
Notes payable - officers, subordinated | | | 1,136,383 | | | - | |
Total long-term debt, net of current portion | | | 8,965,801 | | | 7,980,403 | |
Warrants Payable | | | 675,031 | | | 721,247 | |
Total long-term liabilities | | | 9,640,832 | | | 8,701,650 | |
| | | | | | | |
Equity: | | | | | | | |
CTI Industries Corporation stockholders' equity: | | | | | | | |
Preferred Stock -- no par value 2,000,000 shares authorized 0 shares issued and outstanding | | | - | | | - | |
Common stock - no par value, 5,000,000 shares authorized, 3,320,773 and 3,320,773 shares issued and 3,248,646 and 3,248,646 outstanding, respectively | | | 13,775,994 | | | 13,775,994 | |
Paid-in-capital | | | 1,139,619 | | | 1,045,987 | |
Accumulated earnings (deficit) | | | 42,306 | | | (266,372) | |
Accumulated other comprehensive loss | | | (2,051,688) | | | (2,171,582) | |
Less: Treasury stock, 72,127 shares | | | (141,289) | | | (141,289) | |
Total CTI Industries Corporation stockholders' equity | | | 12,764,942 | | | 12,242,738 | |
Noncontrolling interest | | | (163,774) | | | (160,692) | |
Total Equity | | | 12,601,168 | | | 12,082,046 | |
TOTAL LIABILITIES AND EQUITY | | $ | 38,420,185 | | $ | 37,747,143 | |
1 | ||
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | | ||||||||
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Net Sales | | $ | 14,479,934 | | $ | 11,786,226 | | $ | 40,859,007 | | $ | 37,409,817 | |
| | | | | | | | | | | | | |
Cost of Sales | | | 11,182,419 | | | 9,114,918 | | | 32,105,384 | | | 29,290,188 | |
| | | | | | | | | | | | | |
Gross profit | | | 3,297,515 | | | 2,671,308 | | | 8,753,623 | | | 8,119,629 | |
| | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | |
General and administrative | | | 1,616,263 | | | 1,570,380 | | | 4,562,322 | | | 4,441,458 | |
Selling | | | 553,482 | | | 482,544 | | | 1,448,897 | | | 1,304,783 | |
Advertising and marketing | | | 461,991 | | | 349,581 | | | 1,255,339 | | | 1,249,078 | |
Total operating expenses | | | 2,631,736 | | | 2,402,505 | | | 7,266,558 | | | 6,995,319 | |
| | | | | | | | | | | | | |
Income from operations | | | 665,779 | | | 268,803 | | | 1,487,065 | | | 1,124,310 | |
| | | | | | | | | | | | | |
Other (expense) income: | | | | | | | | | | | | | |
Interest expense | | | (309,372) | | | (270,793) | | | (988,657) | | | (629,854) | |
Interest income | | | 5,536 | | | 5,536 | | | 16,607 | | | 16,607 | |
Foreign currency gain | | | 40,641 | | | 5,301 | | | 14,343 | | | 13,206 | |
| | | | | | | | | | | | | |
Total other expense, net | | | (263,195) | | | (259,956) | | | (957,707) | | | (600,041) | |
| | | | | | | | | | | | | |
Net income before taxes | | | 402,584 | | | 8,847 | | | 529,358 | | | 524,269 | |
| | | | | | | | | | | | | |
Income tax expense | | | 162,362 | | | 1,451 | | | 223,762 | | | 203,726 | |
| | | | | | | | | | | | | |
Net income | | | 240,222 | | | 7,396 | | | 305,596 | | | 320,543 | |
| | | | | | | | | | | | | |
Less: Net income (loss) attributable to noncontrolling interest | | | 5,898 | | | 1,359 | | | (3,082) | | | 3,425 | |
| | | | | | | | | | | | | |
Net income attributable to CTI Industries Corporation | | $ | 234,324 | | $ | 6,037 | | $ | 308,678 | | $ | 317,118 | |
| | | | | | | | | | | | | |
Other Comprehensive Income | | | | | | | | | | | | | |
Foreign currency adjustment | | | (50,338) | | | 387,275 | | | 119,894 | | $ | 88,082 | |
Comprehensive income | | $ | 183,986 | | $ | 393,312 | | $ | 428,572 | | $ | 405,200 | |
| | | | | | | | | | | | | |
Basic income per common share | | $ | 0.07 | | $ | 0.00 | | $ | 0.10 | | $ | 0.10 | |
| | | | | | | | | | | | | |
Diluted income per common share | | $ | 0.07 | | $ | 0.00 | | $ | 0.09 | | $ | 0.10 | |
| | | | | | | | | | | | | |
Weighted average number of shares and equivalent shares of common stock outstanding: | | | | | | | | | | | | | |
Basic | | | 3,248,646 | | | 3,214,771 | | | 3,248,646 | | | 3,208,862 | |
| | | | | | | | | | | | | |
Diluted | | | 3,401,294 | | | 3,353,267 | | | 3,404,109 | | | 3,269,941 | |
2 | ||
| | For the Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
Cash flows from operating activities: | | | | | | | |
Net income | | $ | 305,596 | | $ | 320,543 | |
Adjustment to reconcile net income to cash provided by (used in) operating activities: | | | | | | | |
Depreciation and amortization | | | 1,423,086 | | | 1,261,064 | |
Amortization of debt discount | | | 54,989 | | | - | |
Change in value of swap agreement | | | (30,942) | | | 158,090 | |
Stock based compensation | | | 93,632 | | | 65,826 | |
Provision for losses on accounts receivable | | | 94,862 | | | 9,930 | |
Provision for losses on inventories | | | 71,875 | | | 223,877 | |
Deferred income taxes | | | (41,385) | | | 17,276 | |
Change in assets and liabilities: | | | | | | | |
Accounts receivable | | | (1,788,386) | | | (51,976) | |
Inventories | | | 451,467 | | | (1,676,156) | |
Prepaid expenses and other assets | | | 335,209 | | | (190,274) | |
Trade payables | | | (505,150) | | | (1,952,903) | |
Accrued liabilities | | | (89,353) | | | (336,174) | |
| | | | | | | |
Net cash provided by (used in) operating activities | | | 375,500 | | | (2,150,877) | |
| | | | | | | |
Cash used in investing activities - purchases of property, plant and equipment | | | (1,476,910) | | | (760,084) | |
| | | | | | | |
Cash flows from financing activities: | | | | | | | |
Change in checks written in excess of bank balance | | | (360,069) | | | 664,787 | |
Net change in revolving line of credit | | | 1,676,487 | | | (1,900,868) | |
Proceeds from issuance of long-term debt | | | 174,959 | | | 5,000,000 | |
Repayment of long-term debt (related parties $32,000 and $297,000) | | | (374,111) | | | (696,274) | |
Proceeds from exercise of stock options and warrants | | | - | | | 34,160 | |
Cash paid for deferred financing fees | | | (30,704) | | | (184,795) | |
| | | | | | | |
Net cash provided by in financing activities | | | 1,086,562 | | | 2,917,010 | |
| | | | | | | |
Effect of exchange rate changes on cash | | | (3,726) | | | 18,939 | |
| | | | | | | |
Net (decrease) increase in cash and cash equivalents | | | (18,574) | | | 24,988 | |
| | | | | | | |
Cash and cash equivalents at beginning of period | | | 351,064 | | | 338,523 | |
| | | | | | | |
Cash and cash equivalents at end of period | | $ | 332,490 | | $ | 363,511 | |
| | | | | | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash payments for interest | | $ | 863,263 | | $ | 637,181 | |
| | | | | | | |
Cash payments for taxes | | $ | 25,000 | | $ | 5,000 | |
| | | | | | | |
Supplemental Disclosure of non-cash investing and financing activity | | | | | | | |
Property, Plant & Equipment acquisitions funded by liabilities | | $ | 86,299 | | $ | 79,647 | |
| | | | | | | |
Exercise warrants and payments of subordinated debt | | $ | - | | $ | 3,872 | |
3 | ||
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Basic | | | | | | | | | | | | | |
Average shares outstanding: | | | | | | | | | | | | | |
Weighted average number of common shares outstanding | | | 3,248,646 | | | 3,214,771 | | | 3,248,646 | | | 3,208,862 | |
| | | | | | | | | | | | | |
Net income: | | | | | | | | | | | | | |
Net income attributable to CTI Industries Corporation | | $ | 234,324 | | $ | 6,037 | | $ | 308,678 | | $ | 317,118 | |
| | | | | | | | | | | | | |
Per share amount | | $ | 0.07 | | $ | 0.00 | | $ | 0.10 | | $ | 0.10 | |
| | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | | |
Average shares outstanding: | | | | | | | | | | | | | |
Weighted average number of common shares outstanding | | | 3,248,646 | | | 3,214,771 | | | 3,248,646 | | | 3,208,862 | |
| | | | | | | | | | | | | |
Effect of dilutive shares | | | 152,648 | | | 138,496 | | | 155,463 | | | 61,079 | |
| | | | | | | | | | | | | |
Weighted average number of shares and equivalent shares of common stock outstanding | | | 3,401,294 | | | 3,353,267 | | | 3,404,109 | | | 3,269,941 | |
| | | | | | | | | | | | | |
Net income: | | | | | | | | | | | | | |
Net income attributable to CTI Industries Corporation | | $ | 234,324 | | $ | 6,037 | | $ | 308,678 | | $ | 317,118 | |
| | | | | | | | | | | | | |
Per share amount | | $ | 0.07 | | $ | 0.00 | | $ | 0.09 | | $ | 0.10 | |
4 | ||
5 | ||
6 | ||
7 | ||
| | Shares under Option | | | Weighted Average Exercise Price | | Weighted Average Contractual Life | | | Aggregate Intrinsic Value | |
Balance at December 31, 2012 | | 218,500 | | $ | 5.21 | | 4.0 | | $ | 67,260 | |
Granted | | - | | | - | | | | | | |
Cancelled | | - | | | - | | | | | | |
Exercised | | - | | | - | | | | | | |
Outstanding at September 30, 2013 | | 218,500 | | $ | 5.21 | | 3.2 | | $ | 57,525 | |
| | | | | | | | | | | |
Exercisable at September 30, 2013 | | 71,468 | | $ | 4.45 | | 2.8 | | $ | 57,525 | |
| | Shares under Warrant | | Weighted Average Exercise Price | | Weighted Average Contractual Life | | Aggregate Intrinsic Value | | ||
Balance at December 31, 2012 | | 140,048 | | $ | 0.01 | | 9.5 | | $ | 721,247 | |
Granted | | | | | | | | | | | |
Cancelled | | - | | | - | | | | | | |
Exercised | | - | | | - | | | | | | |
Outstanding at September 30, 2013 | | 140,048 | | $ | 0.01 | | 8.8 | | $ | 675,031 | |
| | | | | | | | | | | |
Exercisable at September 30, 2013 | | - | | | - | | - | | | - | |
| | Options Outstanding | | Options Vested | | ||||||||||||||||
Options by Grant Date | | Shares | | Weighted Avg. | | Remain. Life | | Intrinsic Val | | Shares | | Weighted Avg. | | Remain. Life | | Intrinsic Val | | ||||
Dec 2005 | | 29,500 | | $ | 2.88 | | 2.3 | | $ | 57,525 | | 29,500 | | $ | 2.88 | | 2.3 | | $ | 57,525 | |
Dec 2010 | | 72,000 | | | 6.14 | | 2.3 | | | - | | 17,500 | | | 5.97 | | 2.3 | | | - | |
Jan 2011 | | 8,000 | | | 5.96 | | 2.3 | | | - | | 2,668 | | | 5.96 | | 2.3 | | | - | |
Nov 2012 | | 109,000 | | | 5.17 | | 4.2 | | | - | | 21,800 | | | 5.17 | | 4.2 | | | - | |
TOTAL | | 218,500 | | $ | 5.21 | | 3.2 | | $ | 57,525 | | 71,468 | | $ | 4.45 | | 2.8 | | $ | 57,525 | |
8 | ||
| | Foreign Currency Items | | Accumulated Other Comprehensive (Loss) | | ||
Beginning balance as of January 1, 2013 | | $ | (2,172,000) | | $ | (2,172,000) | |
| | | | | | | |
Current period change, net of tax | | | 120,000 | | | 120,000 | |
| | | | | | | |
Ending Balance as of September 30, 2013 | | $ | (2,052,000) | | $ | (2,052,000) | |
| | September 30, 2013 | | December 31, 2012 | | ||
Raw materials | | $ | 4,103,000 | | $ | 3,486,000 | |
Work in process | | | 1,279,000 | | | 1,388,000 | |
Finished goods | | | 10,596,000 | | | 11,576,000 | |
Allowance for excess quantities | | | (708,000) | | | (636,000) | |
Total inventories | | $ | 15,270,000 | | $ | 15,814,000 | |
| | Net Sales to Outside Customers | | Net Sales to Outside Customers | | ||||||||
| | For the Three Months Ended | | For the Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
United States | | $ | 10,836,000 | | $ | 8,419,000 | | $ | 30,496,000 | | $ | 26,965,000 | |
Europe | | | 282,000 | | | 316,000 | | | 709,000 | | | 631,000 | |
Mexico | | | 2,844,000 | | | 2,546,000 | | | 8,052,000 | | | 8,193,000 | |
United Kingdom | | | 517,000 | | | 505,000 | | | 1,602,000 | | | 1,621,000 | |
| | | | | | | | | | | | | |
| | $ | 14,479,000 | | $ | 11,786,000 | | $ | 40,859,000 | | $ | 37,410,000 | |
9 | ||
| | Total Assets at | | ||||
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | | | | | | |
United States | | $ | 28,505,000 | | $ | 27,708,000 | |
Europe | | | 899,000 | | | 1,057,000 | |
Mexico | | | 1,067,000 | | | 7,849,000 | |
United Kingdom | | | 7,949,000 | | | 1,133,000 | |
| | | | | | | |
| | $ | 38,420,000 | | $ | 37,747,000 | |
| | | Three Months Ended | | | | Three Months Ended | | | ||||
| | | September 30, 2013 | | | | September 30, 2012 | | | ||||
Customer | | | Net Sales | | % of Net Sales | | | | Net Sales | | % of Net Sales | | |
Customer A | | $ | 3,002,000 | | 20.7 | % | | $ | 2,251,000 | | 19.1 | % | |
Customer B | | $ | 1,977,000 | | 13.7 | % | | | N/A | | N/A | | |
Customer C | | $ | 1,884,000 | | 13.0 | % | | | N/A | | N/A | | |
Customer D | | | N/A | | N/A | | | $ | 1,478,000 | | 12.5 | % | |
| | Nine Months Ended | | | Nine Months Ended | | | ||||||
| | September 30, 2013 | | | September 30, 2012 | | | ||||||
Customer | | | Net Sales | | % of Net Sales | | | Net Sales | | % of Net Sales | | | |
Customer A | | $ | 11,412,000 | | 27.9 | % | | $ | 9,586,000 | | 25.6 | % | |
Customer B | | $ | 4,658,000 | | 11.4 | % | | | N/A | | N/A | | |
10 | ||
11 | ||
| | | Amount as of | | | | | | | | | | |
Description | | | 9/30/2013 | | Level 1 | | Level 2 | | Level 3 | | |||
Interest Rate Swap | | $ | 78,000 | | $ | - | | $ | 78,000 | | $ | - | |
Warrant Liability | | | 675,000 | | | - | | | 675,000 | | | | |
| | | | | | | | | | | | | |
| | $ | 753,000 | | $ | - | | $ | 753,000 | | $ | - | |
| | | | Amount as of | | | | | | | | | | |
Description | | | | 12/31/2012 | | | Level 1 | | | Level 2 | | | Level 3 | |
Interest Rate Swap | | | $ | 128,000 | | $ | - | | $ | 128,000 | | $ | - | |
Warrant Liability | | | | 721,000 | | | - | | | 721,000 | | | - | |
| | | $ | 849,000 | | | | | $ | 849,000 | | | | |
| | Liability Derivatives as of | | ||||||||
| | September 30, 2013 | | December 30, 2012 | | ||||||
Derivatives not designated as hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | | ||
Interest Rate Contracts | | Accrued Liabilities | | $ | 78,000 | | Accrued Liabilities | | $ | 128,000 | |
12 | ||
| | For the three months ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | ||||||
Derivatives not Designated as Hedging Instruments under Statement 133 | | Location of Gain (Loss) Recognized in Income on Derivative | | Amount of Gain (Loss) Recognized in Income on Derivative | | Location of Gain (Loss) Recognized in Income on Derivative | | Amount of Gain (Loss) Recognized in Income on Derivative | | ||
Interest Rate Contracts | | Interest Expense | | $ | (3,000) | | Interest Expense | | $ | (10,000) | |
Interest on fixed/variable rate variances | | | | $ | 21,000 | | | | $ | 20,000 | |
| | For the nine months ended | |||||||||
| | September 30, 2013 | | September 30, 2012 | | ||||||
Derivatives not Designated as Hedging Instruments under Statement 133 | | Location of Gain (Loss) Recognized in Income on Derivative | | | Amount of Gain (Loss) Recognized in Income on Derivative | | Location of Gain (Loss) Recognized in Income on Derivative | | | Amount of Gain (Loss) Recognized in Income on Derivative | |
Interest Rate Contracts | | Interest Expense | | $ | (12,000) | | Interest Expense | | $ | (61,000) | |
Interest on fixed/variable rate variances | | | | $ | 61,000 | | | | $ | 59,000 | |
13 | ||
| | Three Months Ended | | ||||||||
| | September 30, 2013 | | | September 30, 2012 | | |||||
| | $ | | % of | | | $ | | % of | | |
Product Category | | (000) Omitted | | Net Sales | | | (000) Omitted | | Net Sales | | |
| | | | | | | | | | | |
Metalized Balloons | | 4,679 | | 32% | | | 4,092 | | 35% | | |
| | | | | | | | | | | |
Latex Balloons | | 3,178 | | 22% | | | 2,641 | | 22% | | |
| | | | | | | | | | | |
Vacuum Sealing Products | | 3,585 | | 25% | | | 3,625 | | 31% | | |
| | | | | | | | | | | |
Film Products | | 1,919 | | 13% | | | 1,033 | | 9% | | |
| | | | | | | | | | | |
Other | | 1,119 | | 8% | | | 395 | | 3% | | |
| | | | | | | | | | | |
Total | | 14,480 | | 100% | | | 11,786 | | 100% | |
14 | ||
| | Nine Months Ended | | ||||||||
| | September 30, 2013 | | | September 30, 2012 | | |||||
| | $ | | % of | | | $ | | % of | | |
Product Category | | (000) Omitted | | Net Sales | | | (000) Omitted | | Net Sales | | |
| | | | | | | | | | | |
Metalized Balloons | | 17,021 | | 42% | | | 16,557 | | 44% | | |
| | | | | | | | | | | |
Latex Balloons | | 9,174 | | 22% | | | 8,232 | | 22% | | |
| | | | | | | | | | | |
Vacuum Sealing Products | | 8,606 | | 21% | | | 7,237 | | 19% | | |
| | | | | | | | | | | |
Film Products | | 4,103 | | 10% | | | 3,876 | | 11% | | |
| | | | | | | | | | | |
Other | | 1,955 | | 5% | | | 1,508 | | 4% | | |
| | | | | | | | | | | |
Total | | 40,859 | | 100% | | | 37,410 | | 100% | |
15 | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
Pouches | | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | | | | | | | | | | | | |
Zippered | | $ | 628,000 | | $ | 1,611,000 | | $ | 2,152,000 | | $ | 3,452,000 | |
| | | | | | | | | | | | | |
Open-Top or Rolls | | | 2,957,000 | | | 2,014,000 | | | 6,454,000 | | | 3,785,000 | |
| | | | | | | | | | | | | |
Total | | $ | 3,585,000 | | $ | 3,625,000 | | $ | 8,606,000 | | $ | 7,237,000 | |
16 | ||
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||
| | % of Sales | | | % of Sales | | ||||||
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | | | | | | | | | | |
Top 3 Customers | | 47.4% | | | 39.2% | | | 49.2% | | | 43.1% | |
| | | | | | | | | | | | |
Top 10 Customers | | 72.4% | | | 67.1% | | | 69.9% | | | 63.8% | |
17 | ||
18 | ||
i. | | A revolving credit up to a maximum amount of $9,000,000 based upon a borrowing base of 85% of eligible receivables and 60% of eligible inventory (up to a maximum of $5,000,000); |
ii. | | A mortgage loan in the principal amount of $2,333,350, amortized over 25 years, the principal balance due on April 29, 2013; |
iii. | | A term loan in the principal amount of $583,333 maturing in monthly principal installments of $58,333; and |
19 | ||
iv. | | An equipment loan commitment in the amount of up to $2,500,000 providing for loan advances from time to time until April 29, 2012 based upon 100% of the purchase price of equipment purchased, the loans to be amortized on a five year basis commencing April 29, 2012, the balance due on April 29, 2013. |
20 | ||
21 | ||
22 | ||
Exhibit Number | | Description |
3.1 | | Third Restated Certificate of Incorporation of CTI Industries Corporation (incorporated by reference to Exhibit A contained in Registrant’s Schedule 14A Definitive Proxy Statement for solicitation of written consent of shareholders, as filed with Commission on October 25, 1999). |
3.2 | | By-laws of CTI Industries Corporation (incorporated by reference to Exhibit 3.1 contained in Registrant’s Form SB-2 Registration Statement (File No. 333-31969) effective November 5, 1997). |
31.1 | | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith). |
31.2 | | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith). |
32 | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
101 | | Interactive Data Files, including the following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to Consolidated Financial Statements. |
23 | ||
Dated: November 14, 2013 | CTI INDUSTRIES CORPORATION | |
| | |