Yunhong Green CTI Reports 1% Revenue Growth, Faces Liquidity Concerns

Yunhong Green CTI Ltd. reported a modest increase in consolidated net sales for the fiscal year ending December 31, 2024, reaching $17.95 million, up from $17.80 million in 2023, marking a 1% growth. The company's revenue from foil balloons, which accounted for 64% of total sales, decreased by 3% to $11.51 million, while sales of film products fell by 9% to $847,000. Conversely, the category of other products, which includes balloon-inspired gifts, saw a 12% increase, rising to $5.60 million, attributed to larger holiday orders and the introduction of an everyday offering.

In terms of profitability, the cost of sales slightly decreased to $14.35 million from $14.55 million, resulting in a negligible impact on the overall profit margin. However, general and administrative expenses rose significantly by 13% to $3.40 million, primarily due to increased audit fees related to the company's former auditor's suspension. The net interest expense also increased to $862,000 from $628,000 in the previous year. The company reported a cumulative net loss of approximately $26 million as of December 31, 2024, and had only $0.2 million in cash, raising concerns about its liquidity and ability to continue as a going concern.

Strategically, Yunhong Green CTI has undergone significant management changes, with Jana Schwan appointed as the new CEO in 2024, following a series of leadership transitions. The company has also focused on expanding its product lines, including the introduction of compostable materials to replace single-use plastics, which aligns with its rebranding efforts. In June 2024, the company acquired production assets through its subsidiary in China, further diversifying its operational capabilities.

Operationally, the company maintained a workforce of 52 full-time employees as of December 31, 2024, with no collective bargaining agreements in place. The company has faced challenges in securing seasonal workers, leading to increased labor costs. Additionally, the company has been actively managing its supply chain amid ongoing inflationary pressures and market fluctuations, which have impacted its ability to fulfill customer demands.

Looking ahead, Yunhong Green CTI aims to enhance its financial position by focusing on its core product lines and exploring new distribution channels. However, the company acknowledges the risks associated with supply chain disruptions, fluctuating raw material costs, and the potential impact of public health crises on its operations. The management's outlook remains cautious, emphasizing the need for additional financing to support future operations and mitigate the substantial doubt regarding its ability to continue as a going concern.