08-26-2015, 05:24 PM
CTI Industries (CTIB) Q1 results-2015 Profit Call Transcript
Wait, please. Good morning ladies and gentlemen. Welcome to CTI IndustriesCorporation declares first quarter 2015 financial results conference call. Thisconversation is being recorded.
This Conference may contain forward-looking statements including statements about, among other things, the business strategy and growth strategy-growth strategy.Expressions that identify forward-looking statements speak only as of the date the statement is made.
These forward-looking statements are based largely on the expectations of the company and depends on a number of risks and uncertainties, some of which cannotbe predicted or quantified and are outside their control.
Future events and actual results could differ materially from those set forth in theprescribed or underlying forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking information will prove to be accurate.
I now turn to the challenge by Steven Merrick, President. Please proceed, Sir.
Good morning, everyone, and thank you for participating in the call. My name isSteven Merrick. I CTI President and I will be presenting our report with Tim Patterson,our Chief Financial Officer; and Stan Brown, Director of our company and Director of investor relations. In concluding our report, there will be the opportunity for you toask any questions you may have.
We're off to a good start this year, and we are pleased to announce a strongBottomLine results for the first quarter. During the quarter, we had net income of $ 285,000, which represents the profit of $ 0.09 per share, $ 0.08 diluted. It is more than six times the revenue we generated in the first quarter of last year, which is $ 45,000, $ 0.01 per share.
These are much higher in our financial results are reflected in a number of differentways, perhaps, the most significant is the improvement in our gross margin rate andour gross margin.
In the first quarter of last year, our gross margin rate was 23.4%. In the first quarter of this year, crude jumped to 26.6% margin. This increase is directly reflected in our gross profit on income levels, which were almost equal to the first quarter of last year, we received nearly 4 million $ in gross margins this year, compared with about $ 3.5 million in gross profit in the first quarter of last year.
This increase in profitability came about for several reasons. Firstly, in our LaTeXballoon business margins have increased over the past year due to lower cost of rawLaTeX. Secondly, in General, our raw material costs declined as a whole as we saw a slight improvement in the cost of the film, as well as raw LaTeX. Thirdly, we are generating more revenue from products that have a high margin, including some of our vacuum sealing product lines, our new line of candy loons products and ourhousehold containers.
The overall improvement in the financial result was also reflected in some of the otherimportant measures. Income from operations in the first quarter of this year was $ 919000, compared to $ 324,000 for the first quarter of last year.
Also in this quarter, we reported EBITDA, earnings before interest, taxes, depreciation and amortization, in our profit release. I want to point out that this non-GAAPaccounting measure, but we use it internally to measure our core operating results, which is why we have included it in the profit issue with reconciliation with our GAAPnumbers.
For the first quarter of this year, EBITDA amounted to $ 1372000, compared to $ 920,000 last year, showing a significant improvement in operating results we have achieved in this year.
I also want to mention that one of the factors in our superior results is that we actually have reduced operating expenses compared to the first quarter of last year, more than $ 100,000, reduced operating costs as a percentage of sales from 21.2 percent in the first quarter of last year to 20.5% in the first quarter of this year.