Double digit fourth quarter revenue growth on broad-based strength across the company's product lines
- Revenue of $6.8 million for the fourth quarter, up 21.4% from the prior year period
- Net income of $0.5 million for the fourth quarter, compared to a net loss of $0.1 million for the prior year period
- Revenue for the full year ended December 31 of $17.8 million compared to $18 million in 2022
- Net loss improved to $0.2 million for 2023 as compared to a net loss of $1.5 million in 2022
- Diluted earnings per share improved to ($0.01) from ($0.22) for the same periods
LAKE BARRINGTON, IL / ACCESSWIRE / February 21, 2024 / Yunhong Green CTI Ltd. (Nasdaq:YHGJ) ("Yunhong CTI" or the "Company"), a leading manufacturer of custom film packaging products, novelty balloons, candy and balloon-inspired gift solutions, and continued development of compostable material solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2023. Management will host a conference call to discuss these results and other matters on Thursday, February 22, 2024, at 9:00 a.m. Central Time / 10:00 a.m. Eastern Time.
Select Financial Highlights (unaudited) - Fourth Quarter 2023 and 2022
- Net sales were $6.8 million in the fourth quarter 2023, compared with $5.6 million in the fourth quarter 2022
- All product areas exceeded prior year sales
- Gross margin 24% compared to 19% in the prior year quarter
- Net income for the fourth quarter of 2023 was $0.5 million, as compared to a loss in 2022 of $0.1 million, respectively
- Diluted Earnings Per Share (EPS) improved to $0.02 from a loss of ($0.01) in 2022
- Adjusted EBITDA (a non-GAAP measure) was $0.8 million, compared to $0.3 million in the fourth 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) - full year ended December 31, 2023 and 2022
- Net sales were $17.8 million in 2023, compared with $18.0 million in the same period of 2022
- Increase in balloon sales offset by reduction of film products revenue
- Gross margin 18% compared to 17% in the prior year period.
- Net loss improved to ($0.2) million in 2023, compared to net loss of ($1.5) million in 2022
- Diluted Earnings Per Share (EPS) improved to a loss of ($0.01) from a loss of ($0.22) in 2022
- Adjusted EBITDA (a non-GAAP measure) was $1.1 million in 2023, compared to $0.1 million in 2022. Please refer to the table accompanying this press release for a reconciliation of the Company's GAAP and non-GAAP results.
Business Highlights 2023
- Sales of balloons rebounded, as helium pricing continues to moderate
- Sales from our commercial films, which typically can fluctuate year-over-year, were below the prior year
- Orders for balloon-inspired gift items have been growing, a trend we expect to continue
- Impact of seasonality increasing, with challenges in everyday sales vs. strengthening order flow for holidays and events
- Ongoing investment in robotic technology to enhance operational efficiencies with two manufacturing lines installed and a third line installation expected to be completed during the first half of 2024
- Ongoing prototype development of Yunhong Biotech's compostable material solutions
Management Commentary
"We had a strong finish to our year, with our fourth quarter top- and bottom-line results significantly exceeding our fourth quarter 2022 financial results," said Frank Cesario, Chief Executive Officer, Yunhong Green CTI. "Our accelerating revenue growth was broad-based, driven by increased sales in all three product areas - foil balloons, commercial films, and balloon-inspired gifts, were up from the prior year, yet we shipped that 20% increase in product flow more quickly. Our balance sheet is in better shape, our operations continue to improve, and we believe we are poised to deliver another solid performance in 2024."
Commenting further, Cesario stated, "We continue to be encouraged by the progress our team is making as we move through the development phases required to advance our compostable material solutions toward a commercially viable solution. Last year our stockholders authorized more shares of stock to be available for opportunistic acquisitions, and I'm pleased that we have identified the first of what I hope to be many good options for our company. As you have seen, we are in the process of acquiring a facility in Hubei, China, from which we plan to manufacture compostable products in the future. This facility, serving as our headquarters in China, also allows us greater connectivity to the broader Yunhong organization, something that I believe will pay dividends in many areas moving forward."
Cesario concluded, "We are committed to finding effective marketing strategies for our foil balloons and balloon-inspired gifts while at the same time developing potential new, complementary revenue sources."
2023 Results (unaudited)
For the three-month periods ended December 31, 2023 and 2022, net sales by product category were as follows:
| Three Months Ended | |||||||||||||||||||||||||
| December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||||
| (000) | % of | (000) | % of | ||||||||||||||||||||||
Product Category |
Net Sales |
|
Net Sales |
|
Variance | % change | |||||||||||||||||||
Foil Balloons |
$ | 3,656 | 54 | % | $ | 2,740 | 49 | % | $ | 916 | 33 | % | |||||||||||||
Film Products |
182 | 3 | % | 136 | 3 | % | 46 | 34 | % | ||||||||||||||||
Other |
$ | 2,933 | 43 | % | $ | 2,694 | 48 | % | $ | 239 | 9 | % | |||||||||||||
Total |
$ | 6,771 | 100 | % | $ | 5,570 | 100 | % | $ | 1,201 | 22 | % | |||||||||||||
| Twelve Months Ended | ||||||||||||||||||||||||||
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
| (000) | % of | (000) | % of | |||||||||||||||||||||||
Product Category |
Net Sales | Net Sales | Variance | % change | ||||||||||||||||||||||
Foil Balloons |
$ | 11,769 | 66 | % | $ | 10,858 | 60 | % | $ | 911 | 8 | % | ||||||||||||||
Film Products |
928 | 5 | % | 2,036 | 11 | % | (1,108 | ) | (54 | %) | ||||||||||||||||
Other |
$ | 5,107 | 29 | % | $ | 5,154 | 29 | % | $ | (47 | ) | (1 | %) | |||||||||||||
Total |
$ | 17,804 | 100 | % | $ | 18,048 | 100 | % | $ | (244 | ) | (1 | %) | |||||||||||||
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 Summary Results (Non-GAAP; unaudited)
| Twelve Months ended December 31, | ||||||||||||||||
| 2023 Q4 | 2022 Q4 | 2023 | 2022 | |||||||||||||
Net Income |
485,000 | (78,000 | ) | (235,000 | ) | (1,467,000 | ) | |||||||||
Addback: Interest |
207,000 | 125,000 | 628,000 | 450,000 | ||||||||||||
Addback: Taxes |
||||||||||||||||
Addback Lender fees |
63,000 | 81,000 | 296,000 | 471,000 | ||||||||||||
Addback: Equity comp |
5,000 | 9,000 | 21,000 | 164,000 | ||||||||||||
Addback: Depr/Amort |
74,000 | 114,000 | 351,000 | 448,000 | ||||||||||||
Adj EBITDA |
834,000 | 251,000 | 1,061,000 | 66,000 | ||||||||||||
2023 Results Conference Call / Webcast Information
Yunhong CTI will host its conference call on Thursday, February 22, 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/2863/49790.
For those planning to participate in the call, please dial +1-877-545-0523 (domestic) or 973-528-0011 (international). The Conference ID is 227768.
A replay of the conference call will be available for two weeks following the call at +1-877-481-4010 (domestic) or +1-919-882-2331 (international), using replay conference ID 49790.
About Yunhong Green CTI Ltd.
Yunhong Green CTI Ltd. is one of the leading manufacturers and marketers of foil balloons and produces laminated and printed films for commercial uses. Yunhong Green CTI also distributes balloon-inspired and other gift items, and continued development of compostable material solutions , 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 the Company'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 Green CTI LTD
Consolidated Condensed Balance Sheets
| unaudited | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
Cash and equivalents |
921,000 | 146,000 | ||||||
Accounts receivable |
3,975,000 | 1,618,000 | ||||||
Inventories |
7,791,000 | 8,325,000 | ||||||
Other current assets |
332,000 | 389,000 | ||||||
Total current assets |
13,019,000 | 10,478,000 | ||||||
Property, Plant and Equipment |
21,477,000 | 21,256,000 | ||||||
Less: accumulated depreciation |
(20,613,000 | ) | (20,334,000 | ) | ||||
Property, Plant and Equipment, net |
864,000 | 922,000 | ||||||
Noncurrent assets |
3,364,000 | 3,882,000 | ||||||
Total assets |
17,247,000 | 15,282,000 | ||||||
Trade payables |
917,000 | 1,313,000 | ||||||
Line of credit |
4,991,000 | 2,878,000 | ||||||
Notes payable - current |
140,000 | 289,000 | ||||||
Notes payable subordinated - current |
1,344,000 | - | ||||||
Other current liabilities |
2,748,000 | 2,998,000 | ||||||
Current liabilities |
10,140,000 | 7,478,000 | ||||||
Notes payable - noncurrent |
533,000 | 427,000 | ||||||
Notes payable - officer; subordinated |
- | 1,267,000 | ||||||
Operating lease liabilities |
2,842,000 | 3,364,000 | ||||||
Noncurrent liabilities |
3,375,000 | 5,058,000 | ||||||
Total liabilities |
13,515,000 | 12,536,000 | ||||||
Shareholders equity |
3,732,000 | 2,746,000 | ||||||
Total liabilities and equity |
17,247,000 | 15,282,000 | ||||||
Yunhong Green CTI LTD
Summarized Condensed Consolidated Statement of Operations
(unaudited)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales |
6,771,000 | 5,570,000 | 17,804,000 | 18,048,000 | ||||||||||||
Cost of sales |
5,174,000 | 4,516,000 | 14,546,000 | 14,910,000 | ||||||||||||
Gross profit |
1,597,000 | 1,054,000 | 3,258,000 | 3,138,000 | ||||||||||||
Operating expenses |
889,000 | 1,092,000 | 3,657,000 | 4,258,000 | ||||||||||||
Gain/(Loss) from operations |
708,000 | (38,000 | ) | (399,000 | ) | (1,120,000 | ) | |||||||||
Interest expense |
207,000 | 125,000 | 628,000 | 450,000 | ||||||||||||
Other (income)/expense |
16,000 | (85,000 | ) | (792,000 | ) | (103,000 | ) | |||||||||
Net income / (loss) before tax |
485,000 | (78,000 | ) | (235,000 | ) | (1,467,000 | ) | |||||||||
Income tax |
||||||||||||||||
Net income / (loss) - continuing ops |
485,000 | (78,000 | ) | (235,000 | ) | (1,467,000 | ) | |||||||||
Preferred stock deemed dividends |
- | (34,000 | ) | (11,000 | ) | (584,000 | ) | |||||||||
Net income/(loss) attributable to |
||||||||||||||||
Yunhong CTI Shareholders |
485,000 | (112,000 | ) | (246,000 | ) | (2,051,000 | ) | |||||||||
Fully diluted earnings per share |
$ | 0.02 | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.22 | ) | |||||
SOURCE: Yunhong Green CTI Ltd.
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