Northern Technologies International Corporation Reports Financial Results for Third Quarter Fiscal 2025
MINNEAPOLIS, July 10, 2025 (GLOBE NEWSWIRE) -- Northern Technologies International Corporation (NASDAQ:NTIC), a leading developer of corrosion inhibiting products and services, as well as bio-based and biodegradable polymer resin compounds, today reported its financial results for the third quarter of fiscal 2025.
Third-quarter fiscal 2025 financial and operating highlights include (with growth rates on a fiscal quarter year-over-year basis):
Consolidated net sales increased 4.0% to $21,509,000
ZERUST® industrial net sales increased 7.1% to $14,441,000
ZERUST® oil and gas net sales decreased 5.3% to $1,288,000
Natur-Tec® product net sales decreased 1.2% to $5,780,000
NTIC China net sales increased 27.4% to $4,510,000
Gross profit, as a percent of net sales, increased 20 basis points to 38.4%
Joint venture operating income decreased 12.9% to $2,273,000
Operating expenses increased 7.6% to $9,665,000
Net income attributable to NTIC was $122,000, compared to $977,000
Net income per diluted share attributable to NTIC was $0.01, compared to $0.10
Cash provided by operating activities was $3,808,000 for the nine months ended May 31, 2025
"In third quarter, we delivered sequential and year-over-year growth in consolidated net sales supported by top-line improvements across many parts of our business, despite mercurial global trade and geopolitical tensions. This performance reflects the dedication of our team and our focus on supporting existing customers, expanding global customer relationships, and scaling opportunities in higher-growth markets," said G. Patrick Lynch, President and CEO of NTIC.
"We continue to invest in our ZERUST® oil and gas business, including the addition of new salespeople and other resources to support foreseeable future growth. While ZERUST® oil and gas sales have varied from quarter-to-quarter, sales have produced consistently higher gross margins than our core industrial business and remained over $1.2 million for 13 consecutive quarters, generating cumulative sales of $24 million over this period. Similar to last fiscal year, a number of customers shifted certain larger orders to our fourth quarter. As a result, we expect to see ZERUST® oil and gas sales and profitability improve sequentially in the fourth quarter and into our fiscal 2026," continued Mr. Lynch.
"We are also closely monitoring Europe as governments begin to implement targeted economic stimulus packages. We expect that any economic recovery these stimulus packages may lead to, especially in Germany, will have a positive impact on our joint venture operating income. While we have faced several macro related challenges in fiscal 2025 to date, we believe we are well positioned for growth and profitability across many of our markets in fiscal 2026 and beyond," concluded Mr. Lynch.
NTIC's consolidated net sales increased 4.0% to $21,509,000 during the three months ended May 31, 2025, compared to $20,686,000 for the three months ended May 31, 2024. The year-over-year increase in consolidated net sales for the third quarter was primarily a result of increased demand for ZERUST® industrial products, partially offset by lower sales in ZERUST® oil and gas and Natur-Tec® product categories. For the nine months ended May 31, 2025, consolidated net sales increased 0.3% to $61,919,000, compared to $61,710,000 for the same period last year.
The following tables set forth NTIC's net sales by product category for the three and nine months ended May 31, 2025, and May 31, 2024, by segment:
Three Months Ended
May 31,2025
% of Net Sales
May 31,2024
% of Net Sales
% Change
ZERUST® industrial net sales
$
14,440,591
67.1
%
$
13,477,181
65.1
%
7.1
%
ZERUST® oil & gas net sales
1,288,046
6.0
%
1,360,054
6.6
%
(5.3
%)
Total ZERUST® net sales
$
15,728,637
73.1
%
$
14,837,235
71.7
%
6.0
%
Total Natur-Tec® net sales
5,779,926
26.9
%
5,848,962
28.3
%
(1.2
%)
Total net sales
$
21,508,563
100.0
%
$
20,686,197
100.0
%
4.0
%
Nine Months Ended
May 31,2025
% of Net Sales
May 31,2024
% of Net Sales
% Change
ZERUST® industrial net sales
$
40,965,696
66.2
%
$
40,431,379
65.5
%
1.3
%
ZERUST® oil & gas net sales
4,350,761
7.0
%
5,029,696
8.2
%
(13.5
%)
Total ZERUST® net sales
$
45,316,457
73.2
%
$
45,461,075
73.7
%
(0.3
%)
Total Natur-Tec® net sales
16,602,565
26.8
%
16,249,335
26.3
%
2.2
%
Total net sales
$
61,919,022
100.0
%
$
61,710,410
100.0
%
0.3
%
NTIC's joint venture operating income decreased 12.9% to $2,273,000 during the three months ended May 31, 2025, compared to joint venture operating income of $2,609,000 during the three months ended May 31, 2024. The $336,000 decrease in joint venture operating income was primarily due to lower sales and a reduction in equity in income from NTIC's joint ventures. Net sales of NTIC's joint ventures, which are not consolidated with NTIC's financial results, decreased 9.3% to $23,212,000 during the three months ended May 31, 2025, compared to $25,602,000 for the three months ended May 31, 2024. Year-to-date, NTIC's joint venture operating income was $6,378,000, compared to joint venture operating income of $7,441,000 during the nine months ended May 31, 2024. Net sales of NTIC's joint ventures were $66,848,000 for the nine months ended May 31, 2025, compared to $72,643,000 for the nine months ended May 31, 2024.
Operating expenses, as a percent of net sales, for the third quarter of fiscal 2025 were 44.9%, compared to 43.4% for the same period last fiscal year. Year-to-date, operating expenses, as a percent of net sales, were 45.1%, compared to 42.0% for the same period last fiscal year. Higher operating expenses for the three and nine months ended May 31, 2025, were primarily due to strategic investments in ZERUST® oil and gas sales infrastructure and increased personnel expenses, including new hires, benefits, and higher travel and professional fees.
NTIC recognized $1,140,000 in other income during the nine months ended May 31, 2025, due to the receipt of a cash ERC payment. No other income was recognized during the prior year period.
Net income attributable to NTIC for the third quarter of fiscal 2025 was $122,000, or $0.01 per diluted share, compared to net income of $977,000, or $0.10 per diluted share, for the same period last fiscal year. Year-to-date, net income attributable to NTIC was $1,117,000, or $0.12 per diluted share, compared to net income of $3,573,000, or $0.36 per diluted share, for the same period last fiscal year.
NTIC's non-GAAP adjusted net income, as set forth in the GAAP reconciliation at the end of this release, was $228,000, or $0.02 per diluted share, for the third quarter of fiscal 2025, compared to $1,082,000, or $0.11 per diluted share, for the same quarter last fiscal year. Year-to-date, non-GAAP adjusted net income was $595,000, or $0.06 per diluted share, compared to net income of $3,891,000, or $0.39 per diluted share, for the same period last fiscal year.
NTIC had working capital of $21,662,000 as of May 31, 2025, including $6,773,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $10,148,000, compared to $23,682,000 of working capital as of August 31, 2024, including $4,952,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $7,112,000.
At May 31, 2025, the Company had $27,139,000 of investments in joint ventures, of which $13,500,000, or 49.7%, is cash, with the remaining balance mostly made up of other working capital.
Conference Call and Webcast
NTIC will host a conference call today at 8:00 a.m. Central Time to review its results of operations for the third quarter of fiscal year 2025 and its outlook, followed by a question-and-answer session. The conference call will be available to interested parties through a webcast. To join the live call and ask a question, a participant must register using the URL below.
https://register-conf.media-server.com/register/BIc10eaa899bef4424bf19b3c6f8af6df1
Once registered, the participant will receive a dial-in number and unique PIN number to access the call.
The audio-only webcast can be accessed at the following link: https://edge.media-server.com/mmc/p/biccbv46
A link to the webcast is also available on the Investor Relations section of NTIC's webpage. Participants are advised to go to the website at least 15 minutes early to register, download and install any necessary audio software. For those unable to participate in the live webcast, a replay of the webcast will be archived and accessible for approximately one year on the Investor Relations section of NTIC's webpage.
About Northern Technologies International Corporation
Northern Technologies International Corporation develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors and agents. NTIC's primary business is corrosion prevention marketed mainly under the ZERUST® brand. NTIC has been selling its proprietary ZERUST® rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over 50 years and more recently has also targeted and expanded into the oil and gas industry. NTIC offers worldwide on-site technical consulting for rust and corrosion prevention issues. NTIC's technical service consultants work directly with the end users of NTIC's products to analyze their specific needs and develop systems to meet their technical requirements. NTIC also markets and sells a portfolio of bio-based and biodegradable polymer resin compounds and finished products marketed under the Natur-Tec® brand.
Forward-Looking Statements
Statements contained in this release that are not historical information are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include NTIC's beliefs that ZERUST® oil and gas sales and profitability will improve sequentially in the fourth quarter and into NTIC's fiscal 2026, European economic stimulus packages will have a positive impact on NTIC's joint venture operating income, NTIC is well positioned for growth and profitability across many of its markets in fiscal 2026 and beyond, and other statements that can be identified by words such as "believes," "continues," "expects," "anticipates," "intends," "potential," "outlook," "will," "may," "would," "should," "guidance" or words of similar meaning, and the use of future dates. Such forward-looking statements are based upon the current beliefs and expectations of NTIC's management and are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties include, but are not limited to, in no particular order: the health of the U.S. and worldwide economies, including in particular the U.S. automotive industry and its evolution towards electric vehicles; the effect of economic uncertainty, recessionary indicators, inflation, increased interest rates and turmoil in the global credit, financial and banking markets or perception thereof; effect of supply chain disruptions; dependence on joint ventures, relationships with joint venture partners and their success, including fees and dividend distributions; risks associated with international operations, including NTIC China, exposure to exchange rate fluctuations, tariffs, trade disputes and changes to trade regulation; effect of economic slowdown and political unrest, including the wars between Russia and Ukraine and Israel and Hamas; the level of growth in NTIC's markets; NTIC's investments in research and development efforts; acceptance of existing and new products; timing of purchase orders under supply contracts; variability in sales to oil and gas customers and effect on quarterly financial results; increased competition; costs and effects of complying with changes in tax, fiscal, government and other regulatory policies, and rules relating to environmental, health and safety matters; and NTIC's reliance on its intellectual property rights and the absence of infringement of the intellectual property rights of others. More detailed information on these and additional factors which could affect NTIC's operating and financial results is described in NTIC's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the fiscal year ended August 31, 2024 and subsequent quarterly reports on Form 10-Q. NTIC urges all interested parties to read these reports to gain a better understanding of the many business and other risks that it faces. Additionally, NTIC undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this release contains non-GAAP financial measures, including adjusted net income attributable to NTIC and adjusted net income attributable to NTIC per diluted share. NTIC's reasons for use of these measures, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures and other information are included at the end of this release. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for NTIC's financial results prepared in accordance with GAAP.
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MAY 31, 2025 (UNAUDITED) AND AUGUST 31, 2024 (AUDITED)
May 31, 2025
August 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
6,773,401
$
4,952,184
Receivables:
Trade, less allowance for credit losses of $310,000 as of May 31, 2025 and August 31, 2024
16,611,517
19,187,079
Fees for services provided to joint ventures
1,113,346
1,235,016
Income taxes
993,317
392,293
