Executive Summary

Q4 2017 revenue was $14.84M and diluted EPS was $(0.24); reported revenue declined year over year due to a one-time $7.8M Black Friday sale in Q4 2016, but excluding that, Q4 2017 revenues exceeded Q4 2016 by ~$1.2M .
Operating income was $0.60M, but net loss of $(0.86)M was driven by interest expense ($0.48M) and a tax charge ($1.03M), including a one-time deferred tax asset write-off of $0.59M .
The company secured new financing (PNC: $6M term loan; $18M revolver), made management additions (President, CFO, Plant Manager), executed >$2M cost reductions, and raised foil balloon capacity by >45%, positioning for 2018 growth; $4.6M of new sales wins booked in Q1 2018 .
Prior two quarters showed softer results: Q3 revenue $13.23M and net loss $(0.28)M; Q2 revenue $12.81M and net loss $(0.53)M, reflecting lower vacuum sealing and film sales and higher consulting/legal costs tied to re-financing .

What Went Well and What Went Wrong

What Went Well

Foil balloons grew 9.7% in FY17 to $29.10M; latex balloons grew 13.9% to $9.40M—management highlighted continued strength and added capacity plans .
Cost reduction program delivered >$2M savings in H2 2017; additional profit improvement measures (margin reviews, production efficiencies) launched with new leadership in December .
Business development momentum: sales pipeline of 50+ opportunities with $4.6M wins already in Q1 2018; geographic expansion targeted in U.S., Mexico, and Europe .
CEO tone: “We have confronted and resolved our financing requirements... implemented a cost savings and management program... engaged in initiatives to build our business across all of our product lines.” .

What Went Wrong

Reported Q4 revenue down vs prior year due to the $7.8M one-time promotion in Q4 2016; Q4 2017 net loss $(0.86)M as interest expense ($0.48M) and tax charge ($1.03M, including $0.59M DTA write-off) weighed on results .
Mix-driven margin pressure and UK losses cited earlier in 2017; vacuum sealing line revenues declined in H1 2017 due to customer inventory selloff following a Q4 2016 promotion .
Elevated re-financing related consulting/legal costs affected Q2 and Q3; Q3 gross margin rate declined to 24.1% from 25.3% year over year .

Financial Results

Quarterly Performance vs Prior Periods and Year-over-Year

Metric	Q4 2016	Q2 2017	Q3 2017	Q4 2017
Revenue ($USD Millions)	$21.44	$12.81	$13.23	$14.84
Gross Profit ($USD Millions)	$5.95	N/A	$3.19	$3.83
Operating Income (EBIT) ($USD Millions)	$1.92	N/A	$(0.03)	$0.60
Net Income ($USD Millions)	$0.86	$(0.53)	$(0.28)	$(0.86)
Diluted EPS ($USD)	$0.24	$(0.14)	$(0.08)	$(0.24)

Margins

Metric	Q4 2016	Q3 2017	Q4 2017
Gross Margin %	27.7% (Gross Profit $5.95M / Revenue $21.44M)	24.1% (as disclosed)	25.8% (Gross Profit $3.83M / Revenue $14.84M)
EBIT Margin %	8.9% (EBIT $1.92M / Revenue $21.44M)	N/A	4.0% (EBIT $0.60M / Revenue $14.84M)

Segment/Product Line Highlights (FY context)

Product Line	FY 2016 Revenue ($USD Millions)	FY 2017 Revenue ($USD Millions)	YoY Change
Foil Balloons	$26.53	$29.10	+9.7%
Latex Balloons	$8.25	$9.40	+13.9%
Vacuum Sealing Products	Declined in 2017 (qualitative)	Declined in 2017 (qualitative)	N/A
Film Products	Declined in 2017 (qualitative)	Declined in 2017 (qualitative)	N/A

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	2018	None provided	Qualitative: aggressive business development; 50+ pipeline; $4.6M wins in Q1 2018	New qualitative outlook
Foil Balloon Capacity	2018	Prior capacity	Capacity +>45% via new converting equipment	Raised capacity
Cost Reductions	2018	N/A	>$2M reductions achieved H2 2017; further profit improvement measures underway	New initiatives
Financing	2018 onward	Prior bank/mezzanine loans	PNC $6M term (5-year) + $18M revolver; prior loans repaid; warrants repurchased	Refinanced
Ziploc Trademark License	Through 2019	Prior expiration (Nov 2017 status)	Extended for two years to Dec 31, 2019	Maintained/extended

Earnings Call Themes & Trends

Note: No Q4 2017 earnings call transcript was found after searching YHGJ documents for 2017–2018 [ListDocuments returned 0 earnings-call-transcript].

Topic	Previous Mentions (Q2 2017)	Previous Mentions (Q3 2017)	Current Period (Q4 2017)	Trend
Financing/Re-financing	Working to extend financing; bank facility extended to Oct 18, 2017; mezzanine matures Jan 17, 2018	Senior banking facility extended to Nov 30, 2017; subordinated loan matures Jan 18, 2018	Completed PNC financing: $6M term + $18M revolver; repaid prior loans and repurchased warrants	Resolved; improved liquidity
Product Capacity (Foil Balloons)	Two new converters to be installed in September; +~25% capacity	Two new foil production machines expected in service by year-end	Capacity enhanced >45% with new equipment and production improvements	Accelerating capacity expansion
Vacuum Sealing Performance	H1 revenues down 31.4% due to customer inventory selloff; expecting improvement in H2	Normalized sales rate in Q3; expecting strong Q4	Q4 results affected by interest/tax; vacuum sealing commentary not quantified in Q4 but year described as decline	Stabilizing from H1 trough
Cost Control/Profitability	Actions to reduce OpEx; targeting >$1.4M annualized reductions	Additional reductions; Q3 re-financing costs offset some savings	>$2M reductions achieved H2; profit improvement program initiated	Strengthening cost discipline
Geographic/Customer Mix	Growth in U.S., Mexico, Europe, UK for foil balloons	Continued growth; UK losses acknowledged	Aggressive expansion plans across U.S., Mexico, Europe	Broadening footprint

Management Commentary

Stephen Merrick (CEO), Q4 release: “While 2017 presented challenges for our Company, we have confronted and resolved our financing requirements... implemented a cost savings and management program to position the Company for future success and are engaged in initiatives to build our business across all of our product lines.”
Q4 initiatives detail: “We have enhanced our production capacity for foil balloons by in excess of 45%... adopted a new maintenance, improvement and enhanced quality control program... developed a sales ‘pipeline’ of over 50 new specific sales opportunities... and have won $4.6 million of these opportunities already in the first quarter of 2018.”
Leadership additions: Jeffrey Hyland (President), Frank Cesario (CFO), Jeffrey Memenga (Plant Manager) brought in December 2017 to drive profit improvement and operational efficiency .

Q&A Highlights

No Q4 2017 earnings call transcript was available in the document set searched; therefore, no Q&A to summarize [ListDocuments returned 0 earnings-call-transcript].

Estimates Context

Wall Street consensus (S&P Global) for Q4 2017 EPS and Revenue was unavailable due to request limit constraints at the time of retrieval; comparison to estimates cannot be provided. We attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and the number of estimates for Q4 2017 but received an SPGI rate limit error. Values unavailable from S&P Global.

Key Takeaways for Investors

Q4 2017 underlying demand strong when adjusted for prior year’s one-time promotion; operating income positive, but interest and tax items drove a net loss—watch margin recapture as re-financing lowers financing frictions and cost programs mature .
Capacity expansion (>45% in foil balloons) and new leadership should enable share gains across regions and customers; pipeline wins ($4.6M in Q1 2018) support near-term revenue visibility .
Cost reductions (>$2M) and profit improvement measures (pricing/margin reviews, efficiencies) are tangible levers for EBIT expansion in 2018 .
Vacuum sealing headwinds from H1 2017 appear transient (customer inventory overhang); normalization noted in Q3—monitor trajectory into 2018 .
Financing risk alleviated with PNC facilities ($6M term, $18M revolver) and warrant repurchase—improved balance sheet flexibility for growth and working capital .
Without consensus estimates, trading set-ups hinge on execution updates (capacity utilization, margin progression, pipeline conversion) and any incremental disclosures on guidance in subsequent quarters.

Appendix: Detailed Q4 2017 Financial Components

Component	Q4 2017 ($USD)	Notes
Revenue	$14,839,271	Underlying increase vs prior year excluding one-time promo
Gross Profit	$3,833,081	Derived gross margin ~25.8% (for context)
Operating Income (EBIT)	$598,493	Profit before interest/tax
Interest Expense (net)	$476,191	Financing-related costs
Tax Expense	$1,024,684	Includes $587,000 DTA write-off
Net Income (Attributable to CTI)	$(860,745)	EPS $(0.24) diluted

Prior Quarter Reference:

Q3 2017: Revenue $13,226,000; Net loss $(274,700); EPS $(0.08) diluted .
Q2 2017: Revenue $12,812,000; Net loss $(526,000); EPS $(0.14) diluted .

YUNHONG GREEN CTI LTD. (YHGJ)·Q4 2017 Earnings Summary