CTI Industries Corporation (CTIB) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $0.18 million, or $ 0.05 a share in the quarter, against a net profit of $0.21 million, or $0.06 a share in the last year period.
Revenue during the quarter dropped 9.44 percent to $13.48 million from $14.88 million in the previous year period. Gross margin for the quarter contracted 227 basis points over the previous year period to 25.32 percent. Total expenses were 99.46 percent of quarterly revenues, up from 95.21 percent for the same period last year. That has resulted in a contraction of 425 basis points in operating margin to 0.54 percent.
Operating income for the quarter was $0.07 million, compared with $0.71 million in the previous year period.
John Schwan, chief executive officer, reported: "The difference between results in the third quarter 2016 and 2015 was attributable to a shortfall in the sales of vacuum sealing products and latex balloons in the third quarter. We fully expect to more than make up for that shortfall in the fourth quarter. We are experiencing very strong sales in our vacuum sealing product line, novelty balloon products and home container line in the fourth quarter. In fact, with the revenues we are now generating and anticipate for the balance of the fourth quarter, we expect that we will have record sales in the fourth quarter and for the year and will report strong profits both for the fourth quarter and for the full year."
Working capital decreases marginally
CTI Industries Corporation has witnessed a decline in the working capital over the last year. It stood at $11.33 million as at Sep. 30, 2016, down 1.34 percent or $0.15 million from $11.48 million on Sep. 30, 2015. Current ratio was at 1.45 as on Sep. 30, 2016, down from 1.59 on Sep. 30, 2015.
Days sales outstanding went up to 35 days for the quarter compared with 31 days for the same period last year.
Days inventory outstanding has increased to 105 days for the quarter compared with 76 days for the previous year period.
Debt comes down significantly
CTI Industries Corporation has recorded a decline in total debt over the last one year. It stood at $8.23 million as on Sep. 30, 2016, down 59.14 percent or $11.91 million from $20.13 million on Sep. 30, 2015. Total debt was 18.28 percent of total assets as on Sep. 30, 2016, compared with 49.64 percent on Sep. 30, 2015. Debt to equity ratio was at 0.70 as on Sep. 30, 2016, down from 1.63 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 0.23 for the quarter from 2.07 for the same period last year.
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