Yunhong CTI Ltd. Reports Second Quarter 2023 Revenue of $4.1 Million and Net Loss of $0.1 Million; Year to Date Revenue of $9.1 Million and Net Income of $0.2 Million

About this update from Yunhong Green Cti Ltd.

Select Financial Highlights (unaudited) - Second Quarter 2023 and 2022 Net sales were $4.1 million in the second quarter 2023, compared with $4.4 million in the second quarter 2022 While helium pricing continued to moderate after the significant spike in 2022, it negatively impacted foil-balloon sales in Q2 2023 Foil balloon sales improved by $0.3 million sequentially Net loss for the second quarter 2023 improved to $0.1 million , compared to net loss of less than $0.4 million in the second quarter 2022 Adjusted EBITDA (a non-GAAP measure) was $0.2 million , compared to $0.0 million in the second quarter of 2022. Please refer to the table accompanying this press release for a reconciliation of the Company's GAAP and non-GAAP results. Select Financial Highlights (unaudited) - Six Months ended June 30, 2023 and 2022 Net sales were $9.1 million in the first six months of 2023, compared with $10.2 million in the same period for 2022 The spike in helium pricing happened during the first half of 2022, impacting a portion of the first half 2022 and all of the first half 2023 Film product revenues, which can vary greatly from quarter to quarter, were $0.7 million higher during the first half of 2022 vs. the same period of 2023 Gross margins were 18% in the first half of each year, as lower revenues for the first half of 2023 were partially offset by improved efficiencies including automation in the manufacturing process Net income was $0.2 million in the first half of 2023, compared to net loss of $0.4 million in the first half of 2022 Adjusted EBITDA (a non-GAAP measure) was $0.9 million in the first half of 2023, compared to $0.3 million in the first half of 2022. Please refer to the table accompanying this press release for a reconciliation of the Company's GAAP and non-GAAP results. Business Highlights First Six-Months 2023 Sales of balloons rebounded slightly during the second quarter, offsetting some of the first quarter weakness in commercial films Sales from commercial films improved during the second quarter Orders for balloon-inspired gift items have been growing, a trend we expect to continue The reduction in helium pricing is expected to generate increased balloon sales during remainder of 2023 vs. 2022 Continued investment in robotic technology to enhance operational efficiencies - second manufacturing line install expected to be completed imminently with a third line installation expected by end of Q1 2024 Ongoing prototype development of Yunhong Biotech's compostable material solutions LAKE BARRINGTON, IL / ACCESSWIRE / August 2, 2023 / Yunhong CTI Ltd. (Nasdaq:CTIB) ("Yunhong CTI" or the "Company"), a leading manufacturer of custom film packaging products, novelty balloons, and candy and balloon gift solutions, today announced its financial results for the second quarter and six months ended June 30, 2023 . Management will host a conference call to discuss these results and other matters on Thursday, August 3, 2023 , at 9:00 a.m. Central Time / 10:00 a.m. Eastern Time . Management Commentary "Upcoming holiday order indications have been robust, and balloon sales rebounded in the second quarter to beat the comparable quarter of 2022, but continued to be negatively impacted by elevated helium prices," said Frank Cesario , Chief Executive Officer, Yunhong CTI . "While our commercial films sales disappointed in the first quarter as this product category has historically experienced significant fluctuation, we benefited from much improved results in the second quarter which were slightly higher than the second quarter of 2022. Overall traction for balloon-inspired gift items has been growing, though notably Valentine's Day shipments for this year were completed in December 2022 , while last year the shipments went into January 2022 . This makes comparability a little more difficult, but overall order volumes have been growing and we seek to continue that trend." Commenting further, Cesario stated, "Our corporate rebranding continues, as we continue down the development path of adding degradable and compostable solutions to our future offerings into the retail channel. Additionally, we asked our shareholders to approve changing our company name from Yunhong CTI Ltd. to Yunhong Green CTI Ltd , and have reserved the ticker symbol ‘YHGJ' to reflect this new identity." 2023 Second Quarter Results (unaudited) For the three-month periods ended June 30, 2023 and 2022, net sales by product category were as follows: Three Months Ended June 30, 2023 June 30, 2022 $ $ (000) % of (000) % of Product Category Net Sales Net Sales Variance % change Foil Balloons $ 2,938 72 % $ 2,674 61 % $ 264 10 % Film Products 589 15 % 535 12 % 54 10 % Other $ 532 13 % $ 1,209 27 % $ (677 ) (56 %) Total $ 4,059 100 % $ 4,418 100 % $ (359 ) (8 %) Six Months Ended June 30, 2023 June 30, 2022 $ $ (000) % of (000) % of Product Category Net Sales Net Sales Variance % change Foil Balloons $ 6,412 70 % $ 6,506 64 % $ (94 ) (1 %) Film Products 678 7 % 1,363 13 % (685 ) (50 %) Other $ 2,020 23 % $ 2,346 23 % $ (326 ) (14 %) Total $ 9,110 100 % $ 10,215 100 % $ (1,105 ) (11 %) 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, the 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. 2023 Q2 Summary Results (Non-GAAP; unaudited) Six Months ended June 30 , 2023 Q2 2022 Q2 2023 2022 Net Income (149,000 ) (399,000 ) 247,000 (420,000 ) Addback: Interest 155,000 109,000 297,000 205,000 Addback: Taxes Addback Lender fees 78,000 137,000 159,000 274,000 Addback: Equity comp 4,000 61,000 11,000 92,000 Addback: Depr/Amort 92,000 98,000 194,000 196,000 Adj EBITDA 180,000 6,000 908,000 347,000 2023 Second Quarter Results Conference Call / Webcast Information Yunhong CTI will host its conference call on Thursday, August 3 , 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/2863/46944 . For those planning to participate in the call, please dial +1-888-506-0062 for domestic calls, or +1-973-528-0011 for international calls. The Conference ID # is 184864. 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 #46944. 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 balloon-inspired 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 June 30, 2023 December 31, 2022 Cash and equivalents 100,000 146,000 Accounts receivable 2,959,000 1,618,000 Inventories 7,639,000 8,325,000 Other current assets 436,000 389,000 Total current assets 11,134,000 10,478,000 Property, Plant and Equipment 21,350,000 21,256,000 Less: accumulated depreciation (20,485,000 ) (20,334,000 ) Property, Plant and Equipment, net 865,000 922,000 Noncurrent assets 3,628,000 3,882,000 Total assets 15,627,000 15,282,000 Trade payables 982,000 1,313,000 Line of credit 4,288,000 2,878,000 Notes payable - current 521,000 289,000 Notes payable subordinated - current 1,305,000 - Other current liabilities 1,533,000 2,998,000 Current liabilities 8,629,000 7,478,000 Notes payable - noncurrent - 427,000 Notes payable - officer; subordinated - 1,267,000 Operating lease liabilities 3,109,000 3,364,000 Noncurrent liabilities 3,109,000 5,058,000 Total liabilities 11,738,000 12,536,000 Shareholders equity 3,889,000 2,746,000 Total liabilities and equity 15,627,000 15,282,000 Yunhong CTI LTD Summarized Condensed Consolidated Statement of Operations (unaudited) Three months ended June 30 , Six months ended June 30 , 2023 2022 2023 2022 Net sales 4,059,000 4,418,000 9,110,000 10,215,000 Cost of sales 3,545,000 3,615,000 7,469,000 8,373,000 Gross profit 514,000 803,000 1,641,000 1,842,000 Operating expenses 804,000 1,109,000 1,919,000 2,167,000 Gain/(Loss) from operations (290,000 ) (306,000 ) (278,000 ) (325,000 ) Interest expense 155,000 109,000 297,000 205,000 Other (income)/expense (296,000 ) (16,000 ) (822,000 ) (110,000 ) Net income / (loss) before tax (149,000 ) (399,000 ) 247,000 (420,000 ) Income tax Net income / (loss) - continuing ops (149,000 ) (399,000 ) 247,000 (420,000 ) Preferred stock deemed dividends - (202,000 ) (11,000 ) (404,000 ) Net income/(loss) attributable to Yunhong CTI Shareholders (149,000 ) (601,000 ) 236,000 (824,000 ) Fully diluted earnings per share $ (0.01 ) $ (0.10 ) $ 0.01 $ (0.14 ) SOURCE: Yunhong CTI Ltd. 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