Revenue of $1.9 million and net loss of $1.0 million (similar to prior year and seasonal low point)
Revenue for the nine months ending September 30 of $11.0 million and net income improved to ($0.7) million as Company enters its strongest quarter with Valentine's Day shipments
EPS improved to ($0.04) from ($0.28) for the nine months ended September 30
LAKE BARRINGTON, IL / ACCESSWIRE / November 1, 2023 / 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 newly created material solutions offering, today announced its financial results for the third quarter and nine months ended September 30, 2023. Management will host a conference call to discuss these results and other matters on Thursday, November 2, 2023, at 9:00 a.m. Central Time / 10:00 a.m. Eastern Time.
Select Financial Highlights (unaudited) - Third Quarter 2023 and 2022
- Net sales were $1.9 million in the third quarter 2023, compared with $2.3 million in the third quarter 2022
- Third quarter traditionally the weakest of the year, following by the strongest in the fourth quarter as the Company ships its Valentine's Day products
- Elevated helium pricing remains a challenge for everyday order flow but holiday order interest has been stronger
- Net loss for the third quarter of 2023 and 2022 was $1.0 million, respectively
- Adjusted EBITDA (a non-GAAP measure) was ($0.7) million, compared to ($0.6) million in the third 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) - Nine Months ended September 30, 2023 and 2022
- Net sales were $11.0 million in the first nine months of 2023, compared with $12.5 million in the same period of 2022
- The spike in helium pricing occurred during the first half of 2022, impacting a portion of 2022 and all of 2023, albeit less so over time
- Film product revenues, which can vary greatly from period to period, were $1.1 million higher during the first nine months of 2022 vs. the same period of 2023
- Gross margins were 17% and 15% during the first nine months of 2022 and 2023, respectively, as lower volumes offset improved efficiencies including automation in the manufacturing process
- Net income improved ($0.7) million in the first nine months of 2023, compared to net income of ($1.4) million in the first nine months of 2022.
- Earnings Per Share (EPS) improved to a loss of ($0.04) per share during the first nine months of 2023 from a loss of ($0.28) per share in 2022.
- Adjusted EBITDA (a non-GAAP measure) was $0.2 million in the first nine months of 2023, compared to ($0.2) million in the first nine months 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 Nine Months 2023
- Sales of balloons rebounded, as helium pricing continues to moderate
- Sales from our volatile commercial films were below the prior year
- Orders for balloon-inspired gift items have been growing, a trend we expect to continue
- 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, updated certifications, and sampling of Yunhong Biotech's compostable material solutions
Management Commentary
"As we bridge from our natural low point in the third quarter to our strongest shipment flow in the fourth quarter, we have seen the helium pricing issue continue to moderate, to the point where balloon sales have finally caught up to last year," said Frank Cesario, Chief Executive Officer, Yunhong Green CTI. "While our commercial films sales have lagged in our most volatile product area, we are benefiting from strong sales growth for our balloon-inspired gift items."
Commenting further, Cesario stated, "Our corporate rebranding continues, as we recently changed our company name. to Yunhong Green CTI Ltd, and have begun trading under the ticker symbol ‘YHGJ' to reflect our new identity. We are in the process of updating our testing and certifications domestically of our compostable material solutions and providing product samples, with much more to come."
Cesario concluded, "Both our traditional business and new offerings will be presented at the China International Import Expo (CIIE) 2023, November 5-10. We, together with Yunhong Biotechnology, Inc., another member of the Yunhong Group family of companies, will be displaying our group's patented compostable, biodegradable, and recyclable materials to enhance environmental sustainability alongside our foil balloons and balloon-inspired gifts."
2023 Third Quarter Results (unaudited)
For the three-month periods ended September 30, 2023 and 2022, net sales by product category were as follows:
| Three Months Ended | ||||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | |||||||||||||||||||||
| $ | $ | |||||||||||||||||||||
| (000) | % of | (000) | % of | |||||||||||||||||||
| Product Category | Net Sales | Net Sales | Variance | % change | ||||||||||||||||||
| Foil Balloons | $ | 1,701 | 88 | % | $ | 1,612 | 71 | % | $ | 89 | 6 | % | ||||||||||
| Film Products | 68 | 4 | % | 537 | 24 | % | (469 | ) | (87 | %) | ||||||||||||
| Other | $ | 154 | 8 | % | $ | 114 | 5 | % | $ | 40 | 35 | % | ||||||||||
| Total | $ | 1,923 | 100 | % | $ | 2,263 | 100 | % | $ | (340 | ) | (15 | %) | |||||||||
| Nine Months Ended | |||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | ||||||||||||||||||||
| $ | $ | ||||||||||||||||||||
| (000) | % of | (000) | % of | ||||||||||||||||||
| Product Category | Net Sales | Net Sales | Variance | % change | |||||||||||||||||
| Foil Balloons | $ | 8,113 | 74 | % | $ | 8,118 | 65 | % | $ | (5 | ) | (0 | %) | ||||||||
| Film Products | 746 | 7 | % | 1,900 | 15 | % | (1,154 | ) | (61 | %) | |||||||||||
| Other | $ | 2,174 | 19 | % | $ | 2,460 | 20 | % | $ | (286 | ) | (12 | %) | ||||||||
| Total | $ | 11,033 | 100 | % | $ | 12,478 | 100 | % | $ | (1,445 | ) | (12 | %) | ||||||||
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 Q3 Summary Results (Non-GAAP; unaudited)Yunhong Green CTI EBITDA calculation2023 Q3
| Nine Months ended September 30, | ||||||||||||||||
| 2023 Q3 | 2022 Q3 | 2023 | 2022 | |||||||||||||
| Net Income | (967,000 | ) | (969,000 | ) | (720,000 | ) | (1,389,000 | ) | ||||||||
| Addback: Interest | 124,000 | 121,000 | 421,000 | 325,000 | ||||||||||||
| Addback: Taxes | ||||||||||||||||
| Addback Lender fees | 74,000 | 116,000 | 233,000 | 390,000 | ||||||||||||
| Addback: Equity comp | 4,000 | 61,000 | 16,000 | 155,000 | ||||||||||||
| Addback: Depr/Amort | 83,000 | 118,000 | 277,000 | 314,000 | ||||||||||||
| Adj EBITDA | (682,000 | ) | (553,000 | ) | 227,000 | (205,000 | ) | |||||||||
2023 Third Quarter Results Conference Call / Webcast Information
Yunhong Green CTI will host its conference call on Thursday, November 2, 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/2863/49305.
For those planning to participate in the call, please dial +1-877-545-0523 (domestic) or 973-528-0011 (international). The Conference ID is 674922.
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 49305.
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 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:[email protected]+ 1-847-382-1000
Investor Relations Contact:
TraDigital IRKevin McGrath+1-646-418-7002[email protected]
Yunhong Green CTI LTDConsolidated Condensed Balance Sheets
| September 30, 2023 | December 31, 2022 | |||||||
| Cash and equivalents | 64,000 | 146,000 | ||||||
| Accounts receivable | 933,000 | 1,618,000 | ||||||
| Inventories | 8,528,000 | 8,325,000 | ||||||
| Other current assets | 411,000 | 389,000 | ||||||
| Total current assets | 9,936,000 | 10,478,000 | ||||||
| Property, Plant and Equipment | 21,392,000 | 21,256,000 | ||||||
| Less: accumulated depreciation | (20,545,000 | ) | (20,334,000 | ) | ||||
| Property, Plant and Equipment, net | 847,000 | 922,000 | ||||||
| Noncurrent assets | 3,488,000 | 3,882,000 | ||||||
| Total assets | 14,271,000 | 15,282,000 | ||||||
| Trade payables | 1,400,000 | 1,313,000 | ||||||
| Line of credit | 3,371,000 | 2,878,000 | ||||||
| Notes payable - current | 528,000 | 289,000 | ||||||
| Notes payable subordinated - current | 1,324,000 | - | ||||||
| Other current liabilities | 1,746,000 | 2,998,000 | ||||||
| Current liabilities | 8,369,000 | 7,478,000 | ||||||
| Notes payable - noncurrent | - | 427,000 | ||||||
| Notes payable - officer; subordinated | - | 1,267,000 | ||||||
| Operating lease liabilities | 2,976,000 | 3,364,000 | ||||||
| Noncurrent liabilities | 2,976,000 | 5,058,000 | ||||||
| Total liabilities | 11,345,000 | 12,536,000 | ||||||
| Shareholders equity | 2,926,000 | 2,746,000 | ||||||
| Total liabilities and equity | 14,271,000 | 15,282,000 | ||||||
Yunhong Green CTI LTDSummarized Condensed Consolidated Statement of Operations(unaudited)
| Nine months ended September 30, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net sales | 1,923,000 | 2,263,000 | 11,033,000 | 12,478,000 | ||||||||||||
| Cost of sales | 1,903,000 | 2,021,000 | 9,372,000 | 10,394,000 | ||||||||||||
| Gross profit | 20,000 | 242,000 | 1,661,000 | 2,084,000 | ||||||||||||
| Operating expenses | 849,000 | 999,000 | 2,768,000 | 3,166,000 | ||||||||||||
| Gain/(Loss) from operations | (829,000 | ) | (757,000 | ) | (1,107,000 | ) | (1,082,000 | ) | ||||||||
| Interest expense | 124,000 | 120,000 | 421,000 | 325,000 | ||||||||||||
| Other (income)/expense | 14,000 | 92,000 | (808,000 | ) | (18,000 | ) | ||||||||||
| Net income / (loss) before tax | (967,000 | ) | (969,000 | ) | (720,000 | ) | (1,389,000 | ) | ||||||||
| Income tax | ||||||||||||||||
| Net income / (loss) - continuing ops | (967,000 | ) | (969,000 | ) | (720,000 | ) | (1,389,000 | ) | ||||||||
| Preferred stock deemed dividends | - | (146,000 | ) | (11,000 | ) | (550,000 | ) | |||||||||
| Net income/(loss) attributable to | ||||||||||||||||
| Yunhong CTI Shareholders | (967,000 | ) | (1,115,000 | ) | (731,000 | ) | (1,939,000 | ) | ||||||||
| Fully diluted earnings per share | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.28 | ) | ||||
SOURCE: Yunhong Green CTI Ltd.
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