Earnings Performance - Northern Technologies reported quarterly earnings of $0 07 per share, missing the Zacks Consensus Estimate of $0 12 per share and representing a -41 67% earnings surprise [1] - The company's earnings were $0 10 per share a year ago, indicating a decline in earnings performance [1] - In the previous quarter, the company posted earnings of $0 20 per share, surpassing the expected $0 19 per share with a 5 26% surprise [1] Revenue Performance - Northern Technologies reported revenues of $21 34 million for the quarter ended November 2024, surpassing the Zacks Consensus Estimate by 1 61% [2] - This compares to year-ago revenues of $20 18 million, showing a year-over-year increase [2] - The company has topped consensus revenue estimates two times over the last four quarters [2] Stock Performance and Market Comparison - Northern Technologies shares have lost about 4% since the beginning of the year, while the S&P 500 has gained 0 5% [3] - The company's stock is expected to underperform the market in the near future, with a Zacks Rank 4 (Sell) [6] Earnings Outlook and Estimate Revisions - The current consensus EPS estimate is $0 16 on $22 3 million in revenues for the coming quarter and $0 70 on $92 6 million in revenues for the current fiscal year [7] - The estimate revisions trend for Northern Technologies is unfavorable ahead of the earnings release [6] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5] Industry Context - Northern Technologies belongs to the Zacks Chemical - Diversified industry, which is currently in the bottom 9% of the 250 plus Zacks industries [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] - Methanex (MEOH), another company in the same industry, is expected to post quarterly earnings of $0 84 per share, representing a year-over-year change of +61 5% [9] - Methanex's revenues are expected to be $1 02 billion, up 11 1% from the year-ago quarter [9]

Net Sales Performance - Consolidated net sales increased 5.7% to a first quarter record of $21,338,000[6] - ZERUST® industrial net sales increased 0.4% to $13,962,000[6] - ZERUST® oil and gas net sales increased 0.7% to $1,514,000[6] - Natur-Tec® product net sales increased 22.8% to a quarterly record of $5,863,000[6] - NTIC China net sales increased 8.6% to $3,995,000[6] - Net sales for the three months ended November 30, 2024, were $21,338,393, compared to $20,181,675 in the same period in 2023, representing a 5.7% increase[21] Gross Profit and Margins - Gross profit, as a percent of net sales, increased 200 basis points to 38.3%[6] - Gross profit for the three months ended November 30, 2024, was $8,162,953, up from $7,334,274 in the same period in 2023, reflecting an 11.3% increase[21] Operating Expenses and Investments - Operating expenses increased 14.0% to $9,470,000, primarily due to investments in ZERUST® oil and gas sales infrastructure[3][6] - Research and development expenses for the three months ended November 30, 2024, were $1,343,397, up from $1,105,921 in the same period in 2023, a 21.5% increase[21] Net Income and Profitability - Net income attributable to NTIC decreased to $561,000, compared to $896,000[6] - Net income attributable to NTIC for the three months ended November 30, 2024, was $561,091, compared to $895,521 in the same period in 2023, a decrease of 37.3%[21] - Non-GAAP adjusted net income for the three months ended November 30, 2024, was $666,874, compared to $1,001,304 in the same period in 2023, a decrease of 33.4%[25] Joint Venture Performance - Joint venture operating income increased 2.7% to $2,414,000[7] - Total joint venture operations income for the three months ended November 30, 2024, was $2,413,712, up from $2,351,199 in the same period in 2023, a 2.7% increase[21] Balance Sheet and Financial Position - NTIC's consolidated balance sheet remains strong with working capital of $22,183,000 as of November 30, 2024[10] - Total current assets as of November 30, 2024, were $40,302,350, down from $41,579,219 as of August 31, 2024, a decrease of 3.1%[19] - Total liabilities as of November 30, 2024, were $19,730,606, compared to $19,501,181 as of August 31, 2024, an increase of 1.2%[19] - Total equity as of November 30, 2024, was $74,307,049, compared to $75,175,321 as of August 31, 2024, a decrease of 1.2%[19] Dividends - Cash dividends declared per common share for the three months ended November 30, 2024, were $0.07, consistent with the same period in 2023[21]

Core Insights - Northern Technologies International Corporation (NTIC) reported record first-quarter consolidated sales of $21,338,000 for fiscal 2025, representing a 5.7% increase year-over-year from $20,182,000 in the same period last year [3][5] - The growth was primarily driven by strong sales in Natur-Tec® products, which saw a 22.8% increase, and stable performance in ZERUST® oil and gas and industrial sales [3][5] - NTIC's CEO expressed cautious optimism regarding the continued improvement in global trends within ZERUST® industrial markets throughout fiscal 2025 [1] Financial Performance - Consolidated net sales increased to $21,338,000, with ZERUST® industrial net sales at $13,962,000 (up 0.4%) and ZERUST® oil and gas net sales at $1,514,000 (up 0.7%) [5][21] - Natur-Tec® product net sales reached a record of $5,863,000, marking a significant increase of 22.8% [5][21] - NTIC China reported its highest quarterly sales in nearly three years, amounting to $3,995,000, an increase of 8.6% [5] Operating Expenses and Profitability - Operating expenses rose by 14.0% year-over-year to $9,470,000, primarily due to strategic investments in ZERUST® oil and gas sales infrastructure [2][5] - Gross profit margin improved by 200 basis points to 38.3%, reflecting successful quality system improvement initiatives [2][5] - Net income attributable to NTIC decreased to $561,000, or $0.06 per diluted share, compared to $896,000, or $0.09 per diluted share in the prior year [8][21] Joint Ventures and Cash Flow - Joint venture operating income increased by 2.7% to $2,414,000, with net sales from joint ventures rising by 1.2% to $23,837,000 [6][21] - Cash provided by operating activities for the first quarter was $2,395,000, indicating strong operational cash flow [5] Balance Sheet Strength - As of November 30, 2024, NTIC's working capital stood at $22,183,000, with cash and cash equivalents of $5,570,000 [9][18] - The company maintained a strong balance sheet, with total assets of $94,037,655 and total liabilities of $19,730,606 [9][19]

Northern Technologies International Corporation (NASDAQ:NTIC) Q4 2024 Earnings Conference Call November 19, 2024 9:00 AM ET Company Participants Patrick Lynch - President and CEO Matthew Wolsfeld - CFO Vineet Dalal - VP of Natur-Tec Conference Call Participants Gus Richard - Northland Joseph Vidich - Manalapan Oracle Capital Management Operator Good day, and welcome to NTIC's Fourth Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, ther ...

Core Insights - Northern Technologies (NTIC) reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and significantly up from $0.03 per share a year ago, indicating a 566.67% year-over-year increase [1] - The company achieved revenues of $23.35 million for the quarter ended August 2024, surpassing the Zacks Consensus Estimate by 3.77% and up from $20.71 million in the same quarter last year, reflecting a 7.88% increase [2] - Northern Technologies has seen its shares increase by approximately 12.3% since the beginning of the year, while the S&P 500 has gained 23.6%, indicating underperformance relative to the broader market [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $22.2 million, and for the current fiscal year, it is $0.80 on revenues of $93.9 million [7] - The estimate revisions trend for Northern Technologies is mixed, resulting in a Zacks Rank 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Industry Context - The Chemical - Diversified industry, to which Northern Technologies belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Performance - In fiscal 2024, NTIC's consolidated net sales reached $63,092,575 from ZERUST® rust and corrosion inhibiting products, marking a 2.2% increase from fiscal 2023[33]. - 74.2% of NTIC's consolidated net sales were derived from ZERUST® corrosion prevention solutions in fiscal 2024[32]. - NTIC's consolidated net sales in fiscal 2024 included $9,229,279 in sales to customers in the oil and gas industry, representing an 18.3% increase from fiscal 2023[41]. - 25.8% of NTIC's consolidated net sales in fiscal 2024 were derived from Natur-Tec® bioplastic packaging solutions, totaling $21,966,942, which is a 20.9% increase compared to fiscal 2023[50]. - NTIC recognized $5,251,782 in fees and $2,997,164 in dividend distributions from its joint ventures during fiscal 2024[154]. - Approximately 40-45% of ZERUST® industrial net sales in North America and 55-60% of net sales of NTIC's joint ventures came from the automotive sector in fiscal 2024[151]. - NTIC's equity in income from joint ventures was $4,223,296 during fiscal 2024, with $2,299,274 attributable to its significant joint venture in Germany, EXCOR[164]. Market Focus and Product Development - NTIC has expanded its market focus significantly on the oil and gas industry, which is highly susceptible to corrosion, to minimize maintenance downtime and extend infrastructure life[23]. - NTIC's corrosion prevention solutions include a variety of products such as packaging, liquids, coatings, rust removers, and engineered solutions for the oil and gas industry[33]. - The Natur-Tec® product line is expected to grow substantially due to new regulations mandating recyclable or compostable packaging by 2032 in California and similar bans in other states[63]. - NTIC's strategy includes enhancing existing products and developing new products to respond to customer needs, which requires significant research and development resources[195]. - NTIC has invested in expanding its corrosion prevention solutions into the oil and gas industry and launching Natur-Tec® resin compounds, although success is not guaranteed[196][197]. Operational Structure and Workforce - NTIC operates 11 subsidiaries and 15 active joint ventures across North America, Europe, and Asia, consolidating their financial results in their statements[28][29]. - NTIC's subsidiaries and joint ventures are strategically positioned in key markets, including China, India, and various ASEAN countries, enhancing their global reach[22][29]. - As of August 31, 2024, NTIC employed a total of 95 employees in North America, with 93 full-time and 2 part-time employees[85]. - The average tenure of NTIC's employees is nine years, indicating a stable workforce[87]. - NTIC's management team has an average tenure of 17 years, reflecting strong leadership continuity[88]. Challenges and Risks - NTIC's business may be negatively impacted by weaknesses in the global economy, particularly in the automotive industry[118]. - Supply chain disruptions have historically affected NTIC's product manufacturing and could lead to increased costs and lost sales[118]. - The evolution of the automotive industry towards electric vehicles could adversely affect NTIC's business[118]. - NTIC's liquidity and financial position depend on fees and dividends from joint ventures, which may not be guaranteed in the future[119]. - NTIC's international operations face risks from economic, political, and legal factors, particularly in Germany and China, which could adversely affect operating results[120]. - The ongoing war between Russia and Ukraine has resulted in commodity price fluctuations, negatively impacting NTIC's margins and joint venture profitability[138]. - Economic uncertainty in developing markets may adversely affect NTIC's revenue and earnings[121]. - Changes in trade regulations and tariffs could materially impact NTIC's business and financial condition due to the evolving geopolitical landscape[143]. Research and Development - NTIC anticipates spending between $4,800,000 and $5,000,000 on research and development activities in fiscal 2025[71]. - NTIC holds 5 patents and patent applications in the United States covering various applications for biobased and compostable plastics[73]. - The Natur-Tec® resin compounds are produced using a patented ReX Process, allowing for high performance and reduced costs compared to other bio-plastic materials[51]. Employee Benefits and Compensation - NTIC's compensation program is designed to attract and retain talent, offering competitive pay levels based on local markets and job descriptions[96]. - Employees are immediately eligible to participate in NTIC's 401(k) savings plan, with NTIC matching contributions and potentially providing profit-sharing contributions[97]. - NTIC offers cash bonuses and an employee stock purchase plan allowing employees to buy stock at a 10% discount to fair market value[98]. - The medical plan provided by NTIC has no co-pay, and employees are not required to contribute towards premium costs[99]. - Full-time employees are eligible for paid holidays and vacation time ranging from 15 to 25 days based on service length[101]. Competitive Landscape - NTIC faces intense competition in almost all product lines, with competitors having substantially greater resources[189]. - The company's strategy to expand its corrosion prevention solutions into the oil and gas industry carries risks and may not be successful, potentially harming financial results[122]. - NTIC's ability to compete effectively may be hindered by intense competition and the need to keep up with new technologies and product offerings[194][195]. Environmental and Regulatory Factors - NTIC's Natur-Tec® bio-based and compostable plastics are designed to replace conventional petroleum-based plastics, with a focus on reducing carbon footprints[25]. - The market for biodegradable plastics is expanding, driven by environmental awareness and regulatory support, which may benefit NTIC's Natur-Tec® products[203][204]. - The commercial success of Natur-Tec® products depends on market acceptance and potential government regulations promoting sustainable practices[204][205].

Financial Performance - Consolidated net sales for fiscal 2024 increased 6.5% to a record $85,060,000 compared to $79,903,000 in the prior fiscal year[3]. - ZERUST oil and gas net sales increased 18.3% to a record $9,229,000, while ZERUST industrial net sales decreased 0.1% to $53,863,000[3]. - Natur-Tec product net sales increased 20.9% to a record $21,967,000, contributing to overall sales growth[3]. - Net income attributable to NTIC increased 85.7% to $5,409,000, or $0.55 per diluted share, compared to $2,912,000, or $0.30 per diluted share in the previous year[3][10]. - Net sales for the three months ended August 31, 2024, were $23,349,107, representing a 12.5% increase from $20,709,635 in the same period of 2023[22]. - Net income attributable to NTIC for the three months ended August 31, 2024, was $938,947, compared to $1,846,984 in the same period of 2023, reflecting a decrease of 49.2%[23]. - Adjusted net income attributable to NTIC for the fiscal year ended August 31, 2024, was $5,832,214, a significant increase from $2,570,488 in 2023[26]. Profitability and Expenses - Gross profit as a percentage of net sales increased 490 basis points to 39.7% for fiscal 2024[3]. - Operating expenses as a percentage of net sales decreased to 41.6% for the full fiscal year 2024, compared to 41.8% in the prior year[9]. - Gross profit for the twelve months ended August 31, 2024, was $33,786,362, up 21.5% from $27,803,831 in 2023[22]. - Research and development expenses for the twelve months ended August 31, 2024, were $4,802,791, slightly down from $4,967,922 in 2023[23]. Cash Flow and Assets - Cash provided by operating activities increased 6.2% to $5,883,000 for the full fiscal year 2024[3]. - Total current assets increased to $41,579,219 as of August 31, 2024, from $39,671,556 in 2023, marking a growth of 4.8%[21]. - Total assets increased to $94,676,502 as of August 31, 2024, from $89,344,303 in 2023, reflecting a growth of 6.5%[21]. - Cash and cash equivalents decreased to $4,952,184 as of August 31, 2024, from $5,406,173 in 2023, a decline of 8.4%[21]. Liabilities and Financial Position - Total liabilities decreased to $19,501,181 as of August 31, 2024, down from $18,645,506 in 2023, indicating a reduction of 4.4%[22]. - NTIC's consolidated balance sheet remains strong with working capital of $23,682,000 as of August 31, 2024[12]. Future Outlook - The company anticipates further sales growth and improved profitability in fiscal 2025, driven by strategic investments and global demand for Natur-Tec products[5][18]. - NTIC's joint venture operating income decreased 18.6% to $9,475,000 for fiscal 2024, compared to $11,642,000 in the previous year[8]. Shareholder Returns - The company reported a diluted net income per share of $0.19 for the three months ended August 31, 2024, compared to $0.10 in the same period of 2023, an increase of 90%[23].

MINNEAPOLIS, Nov. 19, 2024 (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 fourth quarter and fiscal year ended August 31, 2024. Three Months Ended August 31, 2024 % of Net Sales August 31, 2023 % of Net Sales % Change Full year fiscal 2024 financial and operating highlights include (with growth rat ...

MINNEAPOLIS, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Northern Technologies International Corporation (NASDAQ: NTIC) today announced that it expects to release its fiscal 2024 fourth-quarter financial results on Tuesday, November 19, 2024, before the market opens. A copy of the news release will be available on the Investor Relations section of NTIC’s webpage (www.ntic.com). In conjunction with NTIC’s release of its financial and operating results, investors, analysts, and other interested parties are invited to p ...

MINNEAPOLIS, July 17, 2024 (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 announced that the Board of Directors declared a quarterly cash dividend of $0.07 per share payable on August 14, 2024, to shareholders of record at the close of business on July 31, 2024. Northern Technologies International Corporation develops and markets propri ...