Yunhong CTI Ltd. Reports Second Quarter 2022 Results

About this update from Yunhong Green Cti Ltd.

Second Quarter and Six-Month 2022 Financial Highlights Net sales of $4.4 million , as compared to $5.7 million in the prior year period Despite a strong start in April, the elevated price of helium impacted foil balloon customer demand significantly during May and June Net loss of $0.10 per share, as compared to a gain of $0.27 per share in the prior year period, which included a one-time gain on the sale of a building of approximately $3.4 million , or $0.57 per share Adjusted EBITDA improved significantly to positive $6,000 from a loss of ( $502,000 ) during Q2 2021 Adjusted EBITDA for the first six-months of 2022 was $346,000 compared to a loss of $(410,000) for the comparable period in 2021 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 continues to expect full year 2022 Adjusted EBITDA of more than $1.2 million LAKE BARRINGTON, IL . ACCESSWIRE / August 15, 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 second quarter ended June 30, 2022 . Management will host a conference call to discuss these results and other matters on Thursday, August 16, 2022 , at 9:00 a.m. Central Time / 10:00 a.m. Eastern Time . Management Commentary "Our second-quarter performance closes out a solid first half of the fiscal year despite the surge in the market price for helium. Our financial results reflect the resiliency created by reconstructing our group and demonstrate our team's ability to execute operationally and financially ," said Frank Cesario , Chief Executive Officer, Yunhong CTI . "Our strongest business is foil balloons, and most are filled with helium rather than air. As with so many things this year, the cost of helium has increased substantially, which negatively impacted our customers. We felt this market dynamic during the May-June timeframe when customers replaced helium balloon orders with elevated orders for more air-filled balloons. This is not a direct replacement from our perspective, and our results show it. " Commenting further on Q2 2022 financial results, Cesario stated, "April started well, ahead of last year, but the helium issue caught up to our order book in May and June. Our current expectations indicate that the elevated price of helium will run its course during the third quarter and begin to normalize in the fourth quarter." "As we have discussed, optimizing our operations has led to improved profitability. One can see from the ‘Discontinued Operations' line of 2021 that we posted a loss last year of $0.8 million that has not been repeated this year, thanks to divestiture of our unprofitable subsidiary. As we turn our attention to investing for future growth, we are confident in the underlying fundamentals of our business are well positioned." Second Quarter 2022 Results Yunhong CTI's net sales were $4.4 million and $10.2 million during the three- and six-month periods ended June 30, 2022 , compared with $5.7 million and $12.3 million during the same periods of 2021. Three Months Ended June 30, 2022 June 30, 2021 % of $ % of $ Product Category (000) Omitted Net Sales (000) Omitted Net Sales Variance % change Foil Balloons 2,674 61 % 4,563 80 % (1,889 ) (41 %) Latex Balloons 18 - % 2 - % 16 - % Film Products 535 12 % 505 9 % 30 6 % Other 1,191 27 % 642 11 % 549 86 % Total 4,418 100 % 5,712 100 % (1,294 ) (23 %) For the six-month period ended June 30, 2022 and 2021, net sales by product category were as follows: June 30, 2022 June 30, 2021 % of $ % of $ Product Category (000) Omitted Net Sales (000) Omitted Net Sales Variance % change Foil Balloons 6,506 64 % 9,498 77 % (2,992 ) (32 %) Latex Balloons 43 - % 4 - % 39 - % Film Products 1,363 13 % 811 7 % 552 68 % Other 2,303 23 % 1,998 16 % 305 15 % Total 10,215 100 % 12,311 100 % (2,096 ) (17 %) 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. Second Quarter and Year to Date 2022 and 2021 Summary Results (Non-GAAP; unaudited) 2022 Q2 2021 Q2 2022 YTD 2021 YTD Net Income (400,000 ) 2,484,000 (421,000 ) 2,103,000 Addback: Interest 109,000 117,000 205,000 348,000 Addback: Taxes Addback Lender fees 138,000 130,000 274,000 244,000 Addback: Equity comp 61,000 - 92,000 - Addback: Depr/Amort 98,000 124,000 196,000 252,000 Addback: Gain on sale - (3,357,000 ) - (3,357,000 ) Adj EBITDA 6,000 (502,000 ) 346,000 (410,000 ) Second Quarter 2022 Results Conference Call / Webcast Information Yunhong CTI will host its conference call on Thursday, August 16th 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: [email protected] + 1 - 847-382-1000 Investor Relations Contact: TraDigital IR Kevin McGrath +1-646-418-7002 [email protected] Yunhong CTI LTD Consolidated Condensed Balance Sheets (unaudited) June 30, 2022 December 31, 2021 Cash and equivalents 54,000 66,000 Accounts receivable 2,736,000 3,443,000 Inventories 8,281,000 7,876,000 Other current assets 701,000 1,089,000 Total current assets 11,772,000 12,474,000 Property, Plant and Equipment 21,187,000 21,093,000 Less: accumulated depreciation (20,146,000 ) (19,951,000 ) Property, Plant and Equipment, net 1,041,000 1,142,000 Noncurrent assets 4,319,000 3,666,000 Total assets 17,132,000 17,282,000 Trade payables 2,020,000 2,132,000 Line of credit 4,782,000 5,003,000 Notes payable - current 239,000 1,919,000 Other current liabilities 1,031,000 1,317,000 Current liabilities 8,072,000 10,371,000 Notes payable - noncurrent 480,000 - Notes payable - officer; subordinated 1,229,000 - Operating lease liabilities 3,628,000 2,860,000 Noncurrent liabilities 5,337,000 2,860,000 Total liabilities 13,409,000 13,231,000 Shareholders equity 3,723,000 4,051,000 Total liabilities and equity 17,132,000 17,282,000 Yunhong CTI LTD Summarized Condensed Consolidated Statement of Operations (unaudited) Three months ended June 30 , Six months ended June 30 , 2022 2021 2022 2021 Net sales 4,418,000 5,712,000 10,215,000 12,311,000 Cost of sales 3,615,000 4,718,000 8,373,000 10,031,000 Gross profit 803,000 994,000 1,842,000 2,280,000 Gain on Building Sale - (3,357,000 ) - (3,357,000 ) Operating expenses 1,109,000 1,155,000 2,167,000 2,143,000 Loss/(income) from operations (306,000 ) 3,196,000 (325,000 ) 3,494,000 Interest expense 109,000 148,000 205,000 348,000 Other (income)/expense (16,000 ) 221,000 (110,000 ) 227,000 Net (loss) / income before tax (399,000 ) 2,827,000 (420,000 ) 2,919,000 Income tax Net (loss)/income (continuing ops) (399,000 ) 2,827,000 (420,000 ) 2,919,000 Loss from discontinued operations - (343,000 ) (816,000 ) Minority interest - 702,000 743,000 Foreign currency adjustment - 45,000 61,000 Comprehensive Loss (399,000 ) 2,439,000 (420,000 ) 2,042,000 Preferred stock deemed dividends (202,000 ) (168,000 ) (404,000 ) (1,877,000 ) Net (loss)/inc attributable to Yunhong CTI Shareholders (601,000 ) 1,614,000 (824,000 ) (517,000 ) Fully diluted earnings per share $ (0.10 ) $ 0.27 $ (0.14 ) $ (0.09 ) SOURCE: Yunhong CTI Ltd. 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