First Quarter 2022 Financial Highlights
- Net sales of $5.8 million, as compared to $6.6 million in the prior year period
- Net sales affected by timing of a portion of Mother's Day product shipments which shipped in early April this year instead of late March last year
- Net loss of $0.04 per share, as compared to a loss of $0.36 per share in the prior year period, which includes the loss attributable to the Company's Flexo Universal ("Flexo") subsidiary. The Company disposed of its Flexo subsidiary during October 2021.
- Adjusted EBITDA was approximately $340,000 compared to $92,000 in the prior year period, again, including the loss posted by the former subsidiary
Business Highlights
- Continuing strong underlying demand
- Robotic arms on first balloon converting line operating as expected; roll out to additional lines expected throughout 2022 and 2023
- Financial and operational benefit from the disposition of Flexo in October 2021
2022 Financial Guidance
- The Company expects full year 2022 Adjusted EBITDA of more than $1.2 million
LAKE BARRINGTON, IL / ACCESSWIRE / May 18, 2022 / Yunhong CTI Ltd. (Nasdaq:CTIB) ("Yunhong CTI" or the "Company"), a leading manufacturer of custom film products, foil and latex novelty balloons, and flexible packaging products, today announced its financial results for the first quarter ended March 31, 2022. Management will host a conference call to discuss these results and other matters on Thursday, May 19, 2022, at 9:00 a.m. Central Time / 10:00 a.m. Eastern Time.
Management Commentary
"Overall, we are pleased with our first quarter results driven by solid demand across product lines. Later than expected Mother's Day shipments pushed some first quarter business into the second quarter, with an increase in inventory from the end of 2021 that is now gone. Despite these timing issues, the Company generated cash and expects to continue to do so. Managing material and labor availability remains a daily priority across our business and during the quarter we made steady progress on addressing these challenges, most notably with our robotic arms initiative," said Frank Cesario, Chief Executive Officer, Yunhong CTI.
Commenting further on Q1 2022 financial results, Cesario stated, "Without Flexo in the fold, during the first quarter of 2022, we generated Adjusted EBITDA of $340,000. Our Adjusted EBITDA in Q1 2021 of $92,000 was negatively impacted by Flexo (see discussion of non-GAAP measures below). We believe our financial results going forward should be easier to understand and most importantly, we expect to be more profitable now that our organizational changes have been completed with the sale of Flexo."
First Quarter 2022 Results
Yunhong CTI's net sales were $5.8 million during the three months ended March 31, 2022, a decrease of 12% compared with $6.6 million during the same period of 2021.
This decrease was primarily attributable to the timing of Mother's Day shipments, a larger portion of which occurred in early April 2022 instead of late March, as occurred during 2021.
| Three Months Ended | ||||||||||||||||
| March 31, 2022 | March 31, 2021 | |||||||||||||||
| % of $ | % of $ | |||||||||||||||
Product Category | (000) Omitted | Net Sales | (000) Omitted | Net Sales | ||||||||||||
Foil Balloons | 3,832 | 67 | % | 4,935 | 75 | % | ||||||||||
Latex Balloons | 25 | 0 | % | 2 | 0 | % | ||||||||||
Film Products | 828 | 14 | % | 306 | 5 | % | ||||||||||
Other | 1,112 | 19 | % | 1,356 | 20 | % | ||||||||||
Total | 5,797 | 100 | % | 6,599 | 100 | % | ||||||||||
Gross profit decreased to $1.039 million in the first three months of 2022, or 12% as compared to $1.286 million in the prior year period. This corresponds to the timing of shipments above, which also resulted in a temporary increase in inventory of $0.6 million as of March 31, 2022, from the end of December 2021.
Net loss was $21,000 during the three months ended March 31, 2022, compared with net loss of $381,000 in the prior year period.
First quarter 2022 Adjusted EBITDA was $340,000 as compared to $92,000 in the prior year period (including Flexo). See the "Use of Non-GAAP Measures" section below for additional information regarding adjusted EBITDA.
Non-GAAP Results
To provide additional information regarding the Company's results, we have disclosed in this press release a Non-GAAP measure that combines EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) as well as results excluding deconsolidation charges and certain non-recurring charges and benefits. The Company defines EBITDA as earnings (loss) before net interest, other expense, taxes, depreciation and amortization expense. The Company has included EBITDA as a supplemental financial measure in this press release because it is a key measure used by management and the board of directors to understand and evaluate the core operating performance of the Company, to prepare budgets and operating plans, and because management believes such measure provides useful information in understanding and evaluating the Company's operating results. However, use of EBITDA as an analytic tool has its limitations and you should not consider this measure in isolation or as a substitute for analysis of the Company's financial results as reported under GAAP. A reconciliation to the closest GAAP statement of this non-GAAP measure is contained in the accompanying table. Similarly, management and the board of directors look at the results of the entity going forward, without the impact of deconsolidation costs related to the disposal of subsidiaries and related non-cash charges, which can be significant. Again, this pro forma result is not a replacement for the Company's financial results as reported under GAAP. It simply provides another viewpoint that may otherwise be obscured by a comprehensive presentation. A reconciliation between this pro forma result and our financial results as reported under GAAP is also presented.
First Quarter 2022 and 2021 Summary Results (Non-GAAP; unaudited)
Adjusted EBITDA - Non GAAP Measure | ||||||||
| March 31, 2022 | March 31, 2021 | |||||||
Net (loss)/income | (21,000 | ) | (381,000 | ) | ||||
Depreciation/amortization | 98,000 | 128,000 | ||||||
Interest expense | 96,000 | 231,000 | ||||||
Other lender related fees | 136,000 | 114,000 | ||||||
Taxes | - | - | ||||||
Equity charges | 31,000 | - | ||||||
Adjusted EBITDA - Non GAAP Measure | 340,000 | 92,000 | ||||||
First Quarter 2022 Results Conference Call / Webcast Information
Yunhong CTI will host its conference call on Thursday, May 19th at 9:00 a.m. Central Time / 10:00 a.m. Eastern Time.
The live webcast will be available at https://www.webcaster4.com/Webcast/Page/2863/45486. For those planning to participate on the call, please dial +1-888-506-0062 for domestic calls, or +1-973-528-0011 for international calls. The Conference ID # is 182927.
A replay of the conference call will be available for two weeks following the call at +1- 877-481-4010 (for domestic calls) or +1-919-882-2331 (for international calls), replay conference ID #45486.
About Yunhong CTI Ltd.
Yunhong CTI Ltd. is one of the leading manufacturers and marketers of foil balloons and produces laminated and printed films for commercial uses. Yunhong CTI also distributes Candy Blossoms and other gift items and markets its products throughout the United States and in several other countries. For more information about our business, visit our corporate website at www.ctiindustries.com.
Forward-Looking Statements
Statements made in this release that are not historical facts are "forward-looking" statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) 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. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. We cannot anticipate the duration of increased tariffs between the United States and other countries, particularly China. We do not know whether we will be successful in passing such additional costs through to customers. The COVID-19 pandemic has had a negative impact on our operations, and we do not yet know the depth or duration of that disruption. The ultimate impact of inflation and supply chain pressures, as well as potential material limitations related to responses to Russia's invasion of Ukraine, including helium availability and cost, are unknown at this time and might have a material impact on our business and financial performance. 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.
Investor Relations Contact:
Company Contact:
info@ctiindustries.com
+ 1-847-382-1000
Investor Relations Contact:
TraDigital IR
Kevin McGrath
+1-646-418-7002
kevin@tradigitalir.com
Yunhong CTI LTD
Consolidated Statement of Operations
(unaudited)
| March 31, 2022 | March 31, 2021 | |||||||
Net sales | 5,797,000 | 6,599,000 | ||||||
Cost of sales | 4,758,000 | 5,313,000 | ||||||
Gross profit | 1,039,000 | 1,286,000 | ||||||
Operating expenses | 1,058,000 | 988,000 | ||||||
Loss/(income) from operations | (19,000 | ) | 298,000 | |||||
Interest expense | 96,000 | 200,000 | ||||||
Other (income)/expense | (94,000 | ) | 6,000 | |||||
Net (loss) / income before tax | (21,000 | ) | 92,000 | |||||
Income tax | - | - | ||||||
Net (loss)/income | (21,000 | ) | 92,000 | |||||
Loss from discontinued operations | - | (473,000 | ) | |||||
Net (loss)/inc attrib. to Yunhong CTI Shareholders | (21,000 | ) | (381,000 | ) | ||||
Loss attributable to noncontrolling interest | - | 41,000 | ||||||
Foreign currency adjustment | - | 16,000 | ||||||
Comprehensive Loss | ||||||||
| (21,000 | ) | (397,000 | ) | |||||
Preferred stock deemed dividends | (202,000 | ) | (1,709,000 | ) | ||||
Net (loss)/inc attrib. to Yunhong CTI Shareholders | (223,000 | ) | (2,131,000 | ) | ||||
Fully diluted earnings per share | $ | (0.04 | ) | $ | (0.36 | ) | ||
Yunhong CTI LTD
Consolidated Balance Sheets
(unaudited)
| March 31, 2022 | December 21, 2021 | |||||||
Cash and equivalents | 208,000 | 66,000 | ||||||
Accounts receivable | 3,318,000 | 3,443,000 | ||||||
Inventories | 8,496,000 | 7,876,000 | ||||||
Other current assets | 886,000 | 1,089,000 | ||||||
Total current assets | 12,908,000 | 12,474,000 | ||||||
Property, Plant and Equipment | 21,125,000 | 21,093,000 | ||||||
Less: accumulated depreciation | (20,049,000 | ) | (19,951,000 | ) | ||||
Property, Plant and Equipment, net | 1,076,000 | 1,142,000 | ||||||
Noncurrent assets | 4,277,000 | 3,666,000 | ||||||
Total assets | 18,261,000 | 17,282,000 | ||||||
Trade payables | 2,347,000 | 2,132,000 | ||||||
Line of credit | 5,158,000 | 5,003,000 | ||||||
Notes payable - current | 229,000 | 1,919,000 | ||||||
Other current liabilities | 985,000 | 1,317,000 | ||||||
Current liabilities | 8,719,000 | 10,371,000 | ||||||
Notes payable - noncurrent | 493,000 | - | ||||||
Notes payable - officer; subordinated | 1,211,000 | - | ||||||
Operating lease liabilities | 3,777,000 | |||||||
Noncurrent liabilities | 5,481,000 | 2,860,000 | ||||||
Total liabilities | 14,200,000 | 13,231,000 | ||||||
Shareholders equity | 4,061,000 | 4,051,000 | ||||||
Total liabilities and equity | 18,261,000 | 17,282,000 | ||||||
SOURCE: Yunhong CTI Ltd.
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