Financial Data and Key Metrics Changes - Year-to-date sales for 2023 were $11 million, down from $12.4 million in 2022, indicating a decline in revenue [9] - Gross margin decreased by 1.6% from 16.7% last year to 15.1% this year, attributed to reduced revenue volume [13] - The company reported a loss of $0.04 per share this year, an improvement from a loss of $0.28 per share last year [13] Business Line Data and Key Metrics Changes - Film products saw a significant drop in orders during Q3, lagging behind 2022 levels, while balloon-inspired gift items showed strong order growth [11][12] - The timing of shipments for Valentine's Day affected the comparison of year-to-date results, leading to a drop in the category despite increased overall order flow [12] Market Data and Key Metrics Changes - The helium supply issue that impacted the company in 2022 has been resolved, and helium pricing is slowly improving [10][19] - The company noted that two of its largest competitors filed for Chapter 11 bankruptcy in 2023, indicating a challenging competitive landscape [11] Company Strategy and Development Direction - The company has rebranded to Yunhong Green CTI Ltd. to emphasize its focus on biodegradable and compostable products [7] - Plans to enter the U.S. marketplace are underway, with product samples being shared and performance testing conducted [8] - The company is exploring automation in manufacturing to improve efficiency and reduce operating costs in the long term [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for Q4, traditionally the strongest quarter due to Valentine's Day shipments, despite challenges faced in Q3 [6][11] - The company is focused on maintaining spending discipline and finding ways to address cost challenges that have arisen in recent years [13][14] - Management highlighted the importance of celebrating special occasions and the role of their products in enhancing customer experiences [19] Other Important Information - The company has extended its credit line for two years until September 30, 2025, under similar terms [17] - Participation in the China International Import Expo 2023 is planned, showcasing both traditional products and new sustainable materials [18] Q&A Session Summary Question: Will anyone from the company attend the Yunhong conference in China? - Management confirmed that only Yunhong personnel would attend, with the company providing support materials for the conference [21] Question: Who was the second company mentioned in bankruptcy? - The second company is Pioneer, based in Wichita, Kansas, known for brands like Qualatex [22][23] Question: Is the company now the third largest producer in the U.S.? - Management confirmed that they are likely the third largest producer of foil balloons in the U.S. [24] Question: How will the company capitalize on competitors' weaknesses? - Management noted that while competitors are reorganizing, they see opportunities to enhance their product offerings and maintain continuous operations [26][27] Question: Are there plans for acquisitions using the newly authorized shares? - Management indicated that while more shares have been authorized, they have not been issued yet, and they are looking for strategic opportunities to leverage these shares for business development [28][30]

Financial Performance - Net sales for Q2 2023 were $4.059 million, a decrease of 8.1% compared to $4.418 million in Q2 2022[7] - Gross profit for the first half of 2023 was $1.641 million, down 10.9% from $1.842 million in the same period of 2022[7] - The company reported a net loss of $149,000 for Q2 2023, an improvement from a net loss of $399,000 in Q2 2022[7] - The company had a basic loss per common share of $0.01 for Q2 2023, compared to a loss of $0.10 in Q2 2022[7] - The company had a net income of $247,000 for the six months ended June 30, 2023[11] - For the three months ended June 30, 2023, net sales decreased by 8% to $4,059,000 compared to $4,418,000 for the same period in 2022[71] Assets and Liabilities - Total current assets increased to $11.134 million as of June 30, 2023, compared to $10.478 million at the end of 2022, reflecting a growth of 6.2%[5] - Total liabilities decreased to $11.738 million from $12.536 million at the end of 2022, a reduction of 6.4%[5] - The total stockholders' equity increased to $3.889 million as of June 30, 2023, from $2.746 million at the end of 2022, an increase of 41.5%[5] - Cash and cash equivalents at the end of Q2 2023 were $100,000, down from $146,000 at the end of 2022, representing a decrease of 31.5%[9] - The Company reported total inventories of $7,639,000 as of June 30, 2023, down from $8,325,000 as of December 31, 2022[56] Operating Expenses - Operating expenses for the first half of 2023 totaled $1.919 million, a decrease of 11.5% compared to $2.167 million in the same period of 2022[7] - General and administrative expenses decreased to $656,000 for Q2 2023 from $998,000 in Q2 2022, attributed to higher audit fees in early 2023[79] - Interest expense increased to $155,000 for Q2 2023 from $109,000 in Q2 2022 due to market rate increases[81] Cash Flow - The company reported a net cash used in operating activities of $1.361 million for the first half of 2023, compared to net cash provided of $303,000 in the same period of 2022[9] - Net cash used in operations for the six months ended June 30, 2023, was $1,361,000, compared to net cash provided by operations of $303,000 in the same period of 2022[82] - The Company had cash balances of $100,000 as of June 30, 2023, compared to $54,000 for the same period in 2022[85] Debt and Financing - As of June 30, 2023, the term loan balance was $0.5 million, with the Revolving Line of Credit balance at $4.288 million, an increase from $2.878 million as of December 31, 2022[34] - The Company entered into a loan agreement providing for a revolving credit facility of up to $6 million and a term loan facility of $0.7 million, secured by substantially all assets[29] - The Company is currently working on securing a replacement credit facility before the current facility expires on September 30, 2023[27] - The Company faces substantial doubt about its ability to continue as a going concern due to potential capital access issues and ongoing operational impacts from inflation and supply chain constraints[87] Revenue Recognition - The company recognizes revenue at the point when products are transferred to customers, with shipping and handling charges included in net sales[22] Stock and Equity - The total shares of common stock outstanding as of June 30, 2023, were 16,102,749[11] - The Company issued 884,000 shares of common stock for notes payable and investor deposits during the reporting period[11] - The Company issued 400,000 shares of common stock to LF International, generating approximately $1 million in proceeds to reduce bank debt[38] - The Series A Preferred Stock generated a beneficial conversion feature valued at approximately $2.5 million, recognized as a discount on the Series A Preferred[39] - The Series B Preferred Stock was converted into approximately 1.9 million shares of common stock on February 1, 2023, with a carrying value of $1.851 million as of December 31, 2022[40] - The Company converted approximately $0.9 million of liabilities into approximately 1.8 million shares of common stock in February 2023[44] Customer Concentration - Customer A accounted for 56% of net sales for the three months ended June 30, 2023, compared to 41% for the same period in 2022[57] - Sales to the top three customers represented 85% of total sales in Q2 2023, up from 83% in Q2 2022[76] Compliance and Governance - The Company has faced compliance failures with covenants until September 2021 but believes it has been in compliance with the new credit facility since then[27] - The Company is facing substantial doubt about its ability to continue as a going concern for one year from the issuance of the consolidated financial statements due to operating losses and challenges in obtaining adequate capital[26]

Yunhong CTI Ltd. (CTIB) Q2 2023 Earnings Conference Call August 3, 2023 10:00 AM ET Company Participants Frank Cesario - Chief Executive Officer & Chief Financial Officer Jana Schwan - Chief Operating Officer Conference Call Participants Operator Good day and welcome to the Yunhong CTI Second Quarter and Year-to-Date 2023 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, August 3, 2023. The earnings press release accompanying this conference call was issued last nigh ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________ Commission File Number 000-23115 YUNHONG CTI LTD. (Exact name of registrant as specified in its charter) Illinois 36-2848943 (State o ...

Yunhong CTI Ltd. (CTIB) Q1 2023 Earnings Conference Call April 27, 2023 10:00 AM ET Company Participants Frank Cesario - CEO, CFO & Independent Director Jana Schwan - COO Conference Call Participants Glenn Hamilton - Operator Good day, and welcome to the Yunhong CTI First Quarter 2023 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened to questions. This conference is being recorded today, April 27, 2023 ...

Revenue and Sales Performance - In 2022, revenue breakdown was as follows: Novelty Products accounted for 60% of total revenues, Flexible Film Products for 11%, and Candy Blossoms and Other Products for 29%[20]. - The company's total revenues from continuing operations for the year ended December 31, 2022, were $18.048 million, a decrease of 25.1% from $24.086 million in 2021[100]. - Foil balloons accounted for 60% of total net sales in 2022, down from 76% in 2021, while the "Other" category increased to 29% from 14%[100]. - Sales to the top 10 customers represented 90% of net revenues in 2022, compared to 85% in 2021, indicating a high customer concentration risk[104]. - Sales of foil balloons decreased by 40% to $10,858,000 in 2022 from $18,235,000 in 2021, primarily due to increased helium prices[108]. - Sales of film products decreased by 15% to $2,036,000 in 2022 from $2,386,000 in 2021, as the second largest customer had excess inventory[109]. - Sales of other products increased by 49% to $5,154,000 in 2022 from $3,464,000 in 2021, driven by larger holiday orders and new product offerings[110]. - Consolidated net sales for the fiscal year ended December 31, 2022, were $18,048,000, a decrease of 25% compared to $24,086,000 in 2021[107]. Operational Changes and Strategy - The company plans to focus on growth and profitability within its core product lines, specifically foil balloons and related products, while liquidating non-core subsidiaries[22]. - The company has successfully transitioned to a new credit facility since September 2021, remaining in compliance since inception[22]. - The company relocated its warehousing and light assembly facility to Elgin, IL in March 2021, instead of Laredo, TX due to various factors including the Covid-19 pandemic[22]. - The company has developed new distribution channels and sales relationships in the United States, Europe, Mexico, Latin America, and Australia[22]. - The company has introduced additional automation features in production lines during 2022 and plans to continue implementing automation tools in 2023 and beyond to manage labor costs[59]. - The company has exited foreign operations since 2019, focusing on North American operations, particularly foil balloons and related products[86]. Financial Performance and Challenges - The company experienced significant fluctuations in the cost of raw materials, which represent a substantial portion of total product costs, impacting profitability[46]. - The price of helium, crucial for the company's foil balloons, increased dramatically beginning in February 2022, negatively affecting revenue by several million dollars from May 2022 through the end of 2022[69]. - Cash generated by operating activities amounted to $2,368,000 in 2022, compared to cash used of ($3,710,000) in 2021[118]. - The company incurred net interest expense of $450,000 in 2022, down from $564,000 in 2021, due to a lower average outstanding balance of debt[115]. - The company has a cumulative net loss of approximately $24 million from inception to December 31, 2022, raising concerns about its ability to continue as a going concern[122]. - The company has received approximately $160,000 in Employee Retention Tax Credits (ERTC) and sold remaining claims for $1.2 million to a third party for $0.9 million[134]. Research and Development - The company engages in research and development to create innovative and proprietary products within its core product categories[22]. - Research and development expenditures were approximately $200,000 for the fiscal year ended December 31, 2022, compared to $206,000 in 2021, indicating a slight decrease in investment[56]. Leadership and Governance - The company has experienced significant leadership changes, with Frank Cesario rejoining as Chief Executive Officer in January 2022 after previously serving in various roles since 2017[171]. - The Board of Directors consists of five members, with three identified as independent according to NASDAQ standards[181]. - The Audit Committee met three times during 2022 to oversee financial risks and ensure compliance with accounting standards[190]. - The Compensation Committee, which met twice in 2022, is responsible for reviewing executive compensation and employee benefit plans[191]. - The Company aims to improve board diversity, having transitioned from a 100% Caucasian, 100% male board to three Asian directors, two of whom are female[197]. - The Company has established a goal for broad representation on its Board of Directors, reflecting its commitment to diversity[197]. Compliance and Internal Controls - The company is subject to various federal, state, and local regulations regarding waste management and environmental compliance, which it believes it is in material compliance with[60]. - Management identified material weaknesses in internal control over financial reporting, concluding that there is a reasonable possibility of material misstatements in the consolidated financial statements[162]. - The Company maintains disclosure controls and procedures to ensure compliance with the Securities Exchange Act of 1934[156]. - The Company has adopted a complaint monitoring procedure for confidential reporting of accounting or auditing concerns[189]. Employee Compensation - In 2022, Frank Cesario, the Chief Executive Officer, received total compensation of $338,077, which included a salary of $235,577 and stock awards of $102,500[203]. - Jana M. Schwan, the Chief Operating Officer, earned total compensation of $254,410 in 2022, with a salary of $201,910 and stock awards of $43,000[203]. - Jennifer M. Connerty, the Chief Financial Officer, had total compensation of $32,013 in 2022, reflecting her salary[203]. - The compensation expense for stock awards in 2022 was recognized under ASC Topic 718 as reported in the Company's audited financial statements[205]. - The Company had no employment agreements with Named Executive Officers until January 2022, when Mr. Cesario entered into his agreement[208].

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of less than $100,000 for 2022, which is considered unsatisfactory and needs to be improved [7] - Overall gross margin improved from 15% to 17% despite a $7 million decline in foil balloon sales [6] Business Line Data and Key Metrics Changes - Sales of foil balloons, the top-selling product line, were significantly impacted by elevated helium prices, leading to a $7 million decrease in revenue [5][6] - Sales of unrelated products increased by approximately $1.4 million, indicating diversification efforts [6] Market Data and Key Metrics Changes - The price of helium roughly doubled in the first half of 2022 but began to decline in the second half, leading to a recovery in demand [5] - Improved availability and pricing of helium are expected to positively impact the foil balloon market in 2023 [12] Company Strategy and Development Direction - The company is focusing on reducing its debt load, successfully decreasing it from about $20 million to approximately $5 million [9] - Investments in robotic technology are ongoing, with expected payback in less than nine months, enhancing operational efficiency [11] - The company is exploring compostable materials as part of its sustainability initiatives, although commercial readiness is still in progress [17][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2022, including inflation and supply chain issues, but expressed optimism for recovery in 2023 [14][24] - The company believes that a potential recession could be beneficial for its countercyclical business model [24] Other Important Information - The company ended 2022 with a modest debt position, a significant improvement from previous years [6] - Management highlighted the importance of adapting to changing consumer behavior and market conditions post-pandemic [8] Q&A Session Summary Question: What technology or revenues are expected from the Yunhong Group in 2023? - Management discussed new technology related to compostability, emphasizing the need for sustainable solutions, but indicated that commercial readiness is still uncertain [17][19] Question: Concerns about insider purchases of stock - Management acknowledged the concern regarding insider stock purchases and noted that insiders are often unable to transact stock throughout the year [20][21]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) For the transition period from _________to_________ Commission File Number 000-23115 YUNHONG CTI LTD. (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Illinois 36-2848943 (State ...

Yunhong CTI Ltd. (CTIB) Q3 2022 Earnings Conference Call November 16, 2022 10:00 AM ET Company Participants Frank Cesario - CEO Jana Schwan - COO Conference Call Participants Operator Good day and welcome to the Yunhong CTI Third Quarter 2022 Earnings Conference Call. During today's presentation all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, November 16, 2022. The earnings press release accompanying t ...

Yunhong CTI Ltd. (CTIB) Q2 2022 Earnings Conference Call August 16, 2022 10:00 AM ET Company Participants Frank Cesario - CEO Jana Schwan - COO Conference Call Participants Michael Khorassani - Orion Capital Operator Good day and welcome to the Yunhong CTI's Second Quarter 2022 Earnings Conference Call. During today's presentation all parties will be in listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, August 16, 2022. The earn ...