Stephen Merrick
各位早上好，欢迎参加CTI Industries第四季度及2014全年业绩电话会议。今天与我一同出席电话会议的是我们的首席财务官Tim Patterson。在我们报告结束后，我们将开放电话会议进行问答。我们的财报已于今天早晨第一时间发布，现已可供查阅。2014年，我们实现了创纪录的净销售额，略低于5800万美元，这是我们39年历史中的最高水平。这得益于我们消费者真空袋和机器产品线以及箔膜和乳胶气球新奇产品线的持续销售增长。此外，我们在新的Candy Blossom和Candy Loon产品线以及容器产品的直接消费者销售中也获得了一些新的收入来源。总体而言，销售额从2013年的5600万美元增长至2014年的5780万美元，增幅为3.2%。在消费者真空袋和机器产品线中，销售额较2013年增长4.5%，达到1310万美元。在我们的箔膜和乳胶气球新奇产品线中，销售额从2013年的3530万美元增长至2014年的3650万美元，增幅为3.5%。我们的国际业务也实现了良好的收入增长。在英国，我们主要以新奇产品为主的销售额增长了22.9%，达到250万美元。在欧洲，我们的销售额增长了59%，达到160万美元。在其他产品类别中，包括一些较新且不断增长的产品线，如Candy Blossoms和Candy Loons、直接消费者销售、容器产品以及其他一些项目，全年销售额增长了7.6%，达到340万美元。第四季度的净销售额为15,180,000美元，这是我们今年最强劲的一个季度。从净收入的角度来看，我们正朝着正确的方向强劲迈进，这反映在我们下半年的业绩中。全年净收入为514,000美元，较2013年的382,000美元增长了37%。每股基本收益为0.16美元，完全摊薄后为0.15美元，而去年（2013年）的基本每股收益为0.12美元，完全摊薄后为0.11美元。但您可能会特别感兴趣的是，在2014年的第三和第四季度，我们实现了592,000美元的收益，约合每股0.18美元，而在上半年，我们亏损了77,000美元。仅第四季度，我们的净收入为382,000美元，即每股0.12美元（摊薄后为0.11美元），而2013年第四季度的净收入为67,000美元。我们认为我们已经解决了影响去年上半年业绩的问题，特别是由于我们在真空密封系统业务发展方面的投资导致的高运营费用。我们相信这预示着2015年的业绩将表现良好。有几个因素帮助我们实现了这些显著改善的业绩，特别是在2014年下半年，包括更高的利润率和更低的利息成本。2014年全年，我们的毛利率从2013年的22.5%提高至24.6%。全年毛利增至1420万美元，而2013年的毛利为1260万美元。毛利率的提高是由于原材料成本的下降以及我们在部分产品销售中实现的毛利率上升。2013年，我们的原材料成本占收入的45.3%。2014年，这些成本仅占收入的41.7%。原材料成本的下降在一定程度上与我们源自石油的薄膜产品成本有关，但最大的因素是生产乳胶气球所需的生乳胶采购成本的下降。我们认为，至少在中短期内，我们的原材料成本将继续占销售额的较低比例。除了原材料成本的下降，我们还能够通过我们的产品线（特别是我们较新的Candy Loons和容器产品线以及直销业务）在某些产品的销售中实现更高的利润率。2013年，我们的净利息支出为1,109,000美元，比2013年的利息支出减少了约330,000美元。目前，由于与我们夹层贷款相关的认股权证价值变动，我们的利息支出可能会有较大波动。然而，我们希望能够在2015年偿还部分或全部夹层债务，以减少利息支出的金额和不确定性。现在让我谈谈我们对各产品线业务的展望。关于我们的真空密封系统产品线，我们正在经历并预计将保持稳定增长。12月，我们与SC Johnson续签了Ziploc品牌的许可协议，为期三年。2015年，该产品线的销售额增长了约5%。我们预计2015年的增长将超过这一水平，因为我们将进一步渗透美国、加拿大和墨西哥的更多市场和连锁店。在我们的新奇产品线（箔膜和乳胶气球）方面，我们继续扩大在美国、墨西哥、英国和欧洲的覆盖范围，触及更多连锁店和销售渠道。正如我所指出的，2014年我们在英国和欧洲经历了强劲增长，并预计2015年这些市场以及美国、墨西哥和拉丁美洲将继续增长。在过去的一年中，我们开始从新的来源产生收入，包括我们的Candy Loon和Candy Blossom产品线以及容器产品的直接销售。我们预计这些产品线的收入将在2015年增长，并且我们计划增加一些相关的消费品项目。我们的财务状况保持强劲，营运资本余额保持在1150万美元以上，我们的银行信贷额度提供了所需的流动性。我们的股东权益从2013年底的1260万美元增加到2014年底的约1290万美元，代表当前每股账面价值超过3.90美元。虽然我们不提供收入或收益的指引，但我们对2015年增长收入和利润的机会持乐观态度。我们的报告到此结束，现在我们将开放电话会议进行问答。接线员，请协助我们。
Stephen Merrick
Good morning, everyone, and welcome to our CTI Industries earnings conference call in which we will report on our results for the fourth quarter of 2014 and for the full year. I'm joined on the call today by Tim Patterson, our Chief Financial Officer. At the conclusion of our report, we will open the call for questions. Our earnings report was released first thing this morning, so that is available now. In 2014, we achieved record net sales of just under $58 million, the highest in our 39-year history. This came about because we continued to have growing sales in our consumer vacuum pouch and machine product line and in our novelty product lines of foil and latex balloons. And we also had some new sources of revenue in our new Candy Blossom and Candy Loon product lines and in direct to consumer sales of container products. Overall, sales increased by 3.2% from $56 million in 2013 to $57.8 million in 2014. In the consumer vacuum pouch and machine product line, sales increased by 4.5% over 2013 to $13.1 million. And in our novelty lines of foil and latex balloons, sales increased by 3.5% from $35.3 million in 2013 to $36.5 million in 2014. We also had some nice revenue increases in our international operations. In the U.K., our sales principally of novelty products increased by 22.9% reaching $2.5 million. And in our Europe, our sales increased by 59% reaching $1.6 million. In our category of other products which consist of some newer and growing product lines including Candy Blossoms and Candy Loons and direct to consumer sales and container products and some other items, sales increased by 7.6% to $3.4 million for the year. Net sales for the fourth quarter were $15,180,000, which was our strongest quarter of the year. From a net income standpoint, we are moving strongly in the right direction as is reflected in our results for the second half of the year, net income for the full year was $514,000 up 37% over 2013 earnings of $382,000. Per share earnings were $0.16 basic and $0.15 fully diluted compared to $0.12 basic and $0.11 fully diluted last year or 2013. But what you may find particularly interesting is that in the third and fourth quarters together of 2014, we had earnings of $592,000, which was about $0.18 per share, following the first half of the year, we had a loss of $77,000. In the fourth quarter alone, we had net income of $382,000 or $0.12 per share, $0.11 diluted compared to net income of $67,000 in the fourth quarter of 2013. We believe we have addressed the performance issues which affected our results in the first half of last year particularly high operating expenses resulting from our investment in the development of our vacuum sealing system business. And we believe that bodes well for our results in 2015. A couple of factors, which helped us achieve these much improved results particularly during the second half of 2014 were higher margins and lower interest costs. For the year in 2014, our gross margin rate increased from 22.5% in 2013 to 24.6% in 2014. Gross profit for the year increased to $14.2 million over gross profit in 2013 of $12.6 million. This increase in gross margin came about as the result of a decline in our raw materials costs and an increase in the gross margin we achieved on the sale of some of our products. In 2013, our raw materials costs represented 45.3% of our revenues. In 2014, these costs were only 41.7% of our revenues. To some degree, the decline in raw materials costs related to our cost of film products derived from petroleum, but the biggest factor was the decline in the cost of raw latex we purchased to produce our latex balloons. We believe it is likely that at least for the medium-term, our raw materials costs will continue to represent a lower percentage of our sales than in the past. In addition to the decline in raw materials costs, we were able to achieve improved margins on sales of some products through our product lines, but including in particular our newer lines of Candy Loons and container products in our direct sales operation. Our net interest expense in 2013 was $1,109,000 about $330,000 less than our interest expense in 2013. Presently, our interest expense can vary widely as the result of changes in the value of the warrants we issued in connection with our mezzanine loan. However, it is our hope that we would be able to retire some or all of the mezzanine debt during 2015 in order to reduce both the amount and the uncertainty of our interest costs. Let me turn now to where we see our business in our various product lines. With respect to our vacuum sealing systems line, we are experiencing and expect steady growth. In December, we renewed our license agreement with SC Johnson on the Ziploc brand for an additional three-year term. During 2015, sales in that line grew by about 5%. And we expect growth in 2015 to exceed that level as we penetrate additional markets and chains in the United States, Canada and Mexico. In our novelty product lines, the foil and latex balloons, we continued to extend our reach to more chains and outlooks in the United States, Mexico, the United Kingdom and Europe. As I indicated, we experienced strong growth in the United Kingdom and Europe during 2014 and expect to have continued growth in those markets in 2015 as well as in the United States, Mexico and Latin America. During the past year, we have begun to generate revenues from new sources including our Candy Loon and Candy Blossom lines and from the direct sales of container products. We expect revenue from these lines to grow in 2015 and we expect to add some related consumer product items. Our financial position remain strong, our working capital balance remains at better than $11.5 million and our bank line provides the liquidity we need. Our stockholders equity has increased from $12.6 million at the end of 2013 to about $12.9 million by the end of 2014, representing a current book value per share of over $3.90. While we do not provide guidance on revenues or earnings, we are optimistic about our opportunities to grow both revenue and profit in 2015. That concludes our report at this point we will open the call for questions. Operator may we have your assistance please.
