CTI Industries Corporation Releases Financial Results for The Third Quarter and Nine Months Ended September 30, 2005.

BARRINGTON, Ill. -- CTI Industries Corporation (NASDAQ:CTIB), a manufacturer and marketer of metalized balloons, latex balloons, novelty items and printed and laminated films, today released financial results for its third quarter and for the nine months ending September 30, 2005. For the quarter, net sales were $6,033,831 compared to net sales for the third quarter of 2004 of $8,125,521, a decrease of 26%. The Company incurred a net loss for the quarter of ($416,267), compared to a net loss of $(150,370) for the third quarter of 2004.

Net loss per share basic and diluted was ($0.21) for the three months ending September 30, 2005, compared to a net loss per share basic and diluted of ($0.08) for the third quarter of 2004.

For the nine month period ending September 30, 2005, net sales were $22,709,784 compared to net sales for the same period in 2004 of $28,611,290, a decrease of 21%. For the nine month period, the Company had a net loss of ($385,395) compared to net income of $85,850 for the same period in 2004. For the nine month period, the Company had a net loss per share (basic and diluted) of ($0.20), compared to income per share of ($0.04) (basic and diluted) for the same period last year.

"The decline in revenues we have experienced this year, in the third quarter and year to date, are a reflection significantly of the termination of our relationship with, and sales of foil balloons to, Hallmark Cards," said Howard Schwan, President. "During this year to date, we have also experienced modest declines in sales of other products, including latex balloons, helium and sales of consumer pouches to one customer," he said.

"Despite these declines in revenues," he said, "we have slightly improved product margins over the first nine months of this year, and we have begun to replace the lost revenues with expanded sales of foil and latex balloons to other customers, the introduction of a new line of

consumer food storage bags and the addition of a new customer for our commercial films."

CTI Industries is one of the leading manufacturers and marketers of metalized and latex balloons, produces laminated and printed films for commercial uses and produces flexible containers including consumer storage pouches. CTI markets its products throughout the United States and in a number of other countries.

This press release may contain forward-looking statements within the meaning of Section 17A of the Securities Act and Section 21E of the Securities Exchange Act. Actual results could differ materially from those projected in the forward-looking statements, which involve a number of risks and uncertainties, including (i) the risks of generating and maintaining sales in a highly competitive market, (ii) the ability of the Company to enter into or maintain contracts or relationships with customers, distributors, licensors and suppliers, (iii) manufacturing risks, as well as other risks and uncertainties reported by the Company in its SEC filings, and such statements should also be considered in conjunction with cautionary statements contained in the Company's most recent filing with the Securities and Exchange Commission on Form 10-K.

- FINANCIAL HIGHLIGHTS FOLLOW --


CTI Industries Corporation and Subsidiaries
Summary Financial Information
Quarter ended September, 2005 and 2004
(Unaudited)

Consolidated      September 30, December 31,
 condensed           2005         2004
 Balance Sheet   --------------------------

     Assets
Current Assets:
  Cash and cash
   equivalents       $202,603     $526,470
  Accounts
   receivable,
   net              4,016,112    6,123,137
  Inventories       7,016,758    8,348,494
  Other current
   assets             509,572      646,805
                 --------------------------
Total current
 assets            11,745,045   15,644,906

Property and
 equipment, net     9,857,108   10,588,511
Other assets        1,370,495    1,654,147
                 --------------------------

Total Assets      $22,972,648  $27,887,564
                 ==========================

 Liabilities &
  Stockholders' Equity
Total current
 liabilities      $13,615,068  $18,435,055
Long term debt,
 less current
 maturities         5,019,355    5,119,745
Other liabilities   1,608,898    1,371,364
Minority interest      11,368       10,230
Stockholders'
 equity             2,717,959    2,951,170
                 --------------------------

Total Liabilities
 & Stockholders'
 Equity           $22,972,648  $27,887,564
                 ==========================


Consolidated
 Statements of
 Operations
                      Three Months Ended         Nine Months Ended
                         September 30               September 30
                      2005         2004          2005         2004
                 -------------------------- --------------------------
Net sales          $6,033,831   $8,125,521   $22,709,784  $28,611,290
Cost of sales       4,791,645    6,455,743    18,010,651   22,762,114
                 -------------------------- --------------------------

Gross profit on
 sales              1,242,186    1,669,778     4,699,133    5,849,176

Operating
 expenses           1,399,430    1,700,292     4,425,260    5,286,858
                 -------------------------- --------------------------

Income from
 operations          (157,244)     (30,514)      273,871      562,318

Other income
 (expense):
  Interest
   expense           (281,047)    (339,953)     (868,154)  (1,009,917)
  Other                (3,798)     129,124       216,853      618,792
                 -------------------------- --------------------------

Income (loss)
 before income
 taxes and
 minority
 interest            (442,089)    (241,343)     (377,430)     171,193

Income tax
 expense              (25,544)     (90,850)        8,168       84,279
                 -------------------------- --------------------------

Income (loss)
 before minority
 interest            (416,545)    (150,493)     (385,598)      86,914

Minority interest
 in (loss) of
 subsidiary              (278)        (123)         (203)       1,064
                 -------------------------- --------------------------

Net income (loss)   $(416,267)   $(150,370)    $(385,395)     $85,850
                 ========================== ==========================

Basic income
 (loss) per
 common and
 common
 equivalent
 shares                $(0.21)      $(0.08)       $(0.20)       $0.04
                 ========================== ==========================

Diluted income
 (loss) per
 common and
 common
 equivalent
 shares                $(0.21)      $(0.08)       $(0.20)       $0.04
                 ========================== ==========================

Weighted average
 number of shares
 and equivalent
 shares of common
 stock outstanding:
    Basic           1,963,615    1,932,692     1,957,283    1,923,212
                 ========================== ==========================

    Diluted         1,963,615    1,932,692     1,957,283    1,991,766
                 ========================== ==========================