Financial Data and Key Metrics Changes - For Q3 fiscal 2025, consolidated net sales increased by 4% to $21.5 million compared to Q3 fiscal 2024 [6][15] - Gross margin reached 38.4%, an increase from 38.2% year over year, reflecting a more profitable sales mix [16] - Net income for Q3 fiscal 2025 was $122,000 or $0.01 per diluted share, down from $977,000 or $0.10 per diluted share in Q3 fiscal 2024 [16][17] - Non-GAAP adjusted net income was $228,000 or $0.02 per diluted share compared to $1.1 million or $0.11 per diluted share in the prior year [17] Business Line Data and Key Metrics Changes - Xerus Industrial's net sales increased by 7.1%, while ZERUST Oil and Gas net sales decreased by 5.3%, and Natur Tec net sales declined by 1.2% [6][11] - Natur Tec sales were $5.8 million, representing a 1.2% year-over-year decline but a 16.5% sequential increase from Q2 fiscal 2025 [12] - ZERUST Oil and Gas sales were $1.3 million compared to $1.4 million in the same period last year, with a trailing twelve-month sales increase of 15.4% [10][11] Market Data and Key Metrics Changes - Joint venture sales decreased by 12.9% year over year to $2.3 million, attributed to high energy prices and regional economic pressures in Europe [7] - NTSC China net sales increased by 27.4% to $4.5 million, marking the second highest quarterly revenue since transitioning to a wholly owned subsidiary [8][9] Company Strategy and Development Direction - The company is focused on supporting existing customers, expanding global relationships, and scaling in high-growth markets [5] - Continued investments in the oil and gas business are part of the long-term growth strategy, despite higher operating expenses [5][11] - The company is optimistic about the potential recovery in European markets due to government stimulus packages [7] Management's Comments on Operating Environment and Future Outlook - Management expects improvements in profitability in Q4 fiscal 2025 and continued progress in fiscal 2026 [6] - The company remains committed to long-term growth opportunities and believes that strategic priorities will drive sustainable growth and profitability [19] Other Important Information - As of May 31, 2025, working capital was $21.7 million, including $6.8 million in cash [18] - The Board of Directors declared a quarterly cash dividend of $0.01 per common share [19] Q&A Session Summary Question: Comments on improved quarter and operational profits - Management acknowledged significant improvement in operational profits from Q2 to Q3, with nearly all business units showing progress [22][23] Question: Cost comparison of new technology in oil and gas - Management confirmed that the new technology is cheaper on the front end compared to traditional methods, with easier installation and better long-term protection [24][28] Question: Incremental spending on sales for oil and gas - The company projected an additional $1.3 million in personnel costs for oil and gas over the past twelve months, translating to about $3.4 million in quarterly expenses [32] Question: Profitability of NTSC China - Management confirmed that NTSC China has been profitable for some time, with significant revenue growth observed [36] Question: Developments in compostable packaging - The company is working on improving the water vapor transmission rate of compostable packaging, with potential applications in food packaging expected to generate revenue in the next two years [41][42]

Financial Data and Key Metrics Changes - For Q3 fiscal 2025, consolidated net sales increased by 4% to $21.5 million compared to Q3 fiscal 2024 [6][15] - Gross margin reached 38.4%, an increase from 38.2% year over year, reflecting a more profitable sales mix [16] - Net income for Q3 fiscal 2025 was $122,000 or $0.01 per diluted share, down from $977,000 or $0.10 per diluted share in Q3 fiscal 2024 [16] Business Line Data and Key Metrics Changes - Xerus Industrial's net sales increased by 7.1%, while ZERUST Oil and Gas net sales decreased by 5.3%, and Natur Tec net sales declined by 1.2% [6][15] - Natur Tec sales were $5.8 million, representing a 1.2% year-over-year decline but a 16.5% sequential increase from Q2 fiscal 2025 [12] - ZERUST Oil and Gas sales were $1.3 million compared to $1.4 million in the same period last year, with a trailing twelve-month sales increase of 15.4% [11] Market Data and Key Metrics Changes - Joint venture sales decreased by 12.9% year over year to $2.3 million, attributed to high energy prices and regional economic pressures in Europe [7][8] - NTSC China net sales increased by 27.4% to $4.5 million, marking the second highest quarterly revenue since transitioning to a wholly owned subsidiary [8][9] Company Strategy and Development Direction - The company is focused on supporting existing customers, expanding global relationships, and scaling in high-growth markets [5] - Planned investments in the oil and gas business are expected to contribute to future growth despite current higher operating expenses [5][16] - The company is committed to long-term growth opportunities, particularly in the Chinese market and bioplastics segment [10][18] Management's Comments on Operating Environment and Future Outlook - Management expects improvements in profitability in Q4 fiscal 2025 and continued progress in fiscal 2026 despite macroeconomic pressures [6][16] - The company is closely monitoring European market trends for signs of stabilization due to government stimulus packages [8] - Management remains confident in the direction of the company and its strategic growth plan despite challenges faced in fiscal 2025 [13] Other Important Information - As of May 31, 2025, working capital was $21.7 million, with outstanding debt of $10.1 million [17] - The Board declared a quarterly cash dividend of $0.01 per common share, reflecting a disciplined approach to cash management [18] Q&A Session Summary Question: Improvement in operational profits - Management acknowledged significant improvement in operational profits from Q2 to Q3, with nearly all business units showing progress [22] Question: Cost comparison of new technology in oil and gas - Management confirmed that the new technology is cheaper on the front end compared to traditional methods, with easier installation and better long-term protection [23][26] Question: Additional spending on sales efforts for oil and gas - The company is projected to spend about $5.3 million in the current year, an increase of $1.3 million in personnel costs compared to the previous year [30] Question: Profitability of NTSC China - NTSC China has been profitable for some time, with significant revenue growth observed over the past three years [34] Question: New developments in compostable packaging - Management is working on a project to improve the water vapor transmission rate of compostable packaging, with potential revenue expected in the next two years [40][41]

Core Insights - Northern Technologies International Corporation (NTIC) reported a 4.0% increase in consolidated net sales for Q3 fiscal 2025, reaching $21.51 million compared to $20.69 million in Q3 fiscal 2024, driven by demand for ZERUST® industrial products despite geopolitical tensions [4][6][20] - The company continues to invest in its ZERUST® oil and gas business, expecting sequential growth in sales and profitability in Q4 fiscal 2025 and into fiscal 2026, with cumulative sales of $24 million over the past 13 quarters [2][3] - NTIC is monitoring European economic stimulus packages, particularly in Germany, which may positively impact joint venture operating income [3] Financial Performance - Consolidated net sales for the nine months ended May 31, 2025, increased by 0.3% to $61.92 million from $61.71 million in the same period last year [4][20] - ZERUST® industrial net sales rose by 7.1% to $14.44 million, while ZERUST® oil and gas net sales decreased by 5.3% to $1.29 million [5][6] - Gross profit margin increased by 20 basis points to 38.4%, while operating expenses rose by 7.6% to $9.67 million [6][7] Income and Earnings - Net income attributable to NTIC for Q3 fiscal 2025 was $122,000, or $0.01 per diluted share, down from $977,000, or $0.10 per diluted share, in Q3 fiscal 2024 [9][21] - Year-to-date net income attributable to NTIC was $1.12 million, or $0.12 per diluted share, compared to $3.57 million, or $0.36 per diluted share, for the same period last year [9][21] - Non-GAAP adjusted net income for Q3 fiscal 2025 was $228,000, or $0.02 per diluted share, compared to $1.08 million, or $0.11 per diluted share, for the same quarter last fiscal year [10][25] Joint Ventures and Investments - NTIC's joint venture operating income decreased by 12.9% to $2.27 million in Q3 fiscal 2025, primarily due to lower sales and reduced equity income from joint ventures [7][20] - The company had $27.14 million in investments in joint ventures as of May 31, 2025, with $13.50 million in cash [12][18] Balance Sheet Highlights - As of May 31, 2025, NTIC had working capital of $21.66 million, including $6.77 million in cash and cash equivalents [11][18] - Total assets increased to $99.30 million from $94.68 million as of August 31, 2024 [18][19]

Company Overview - Northern Technologies International Corporation (NTIC) develops and markets proprietary, environmentally beneficial products and services in over 65 countries, primarily focusing on corrosion prevention under the ZERUST® brand [5] - NTIC has been in the corrosion prevention market for over 50 years, serving various sectors including automotive, electronics, military, and more recently, the oil and gas industry [5] - The company also offers bio-based and biodegradable polymer resin compounds marketed under the Natur-Tec® brand [5] Upcoming Financial Results - NTIC is set to release its fiscal 2025 third-quarter financial results on July 10, 2025, before the market opens [1] - A conference call with management will take place on the same day at 9:00 a.m. Eastern Time, where the President and CEO, along with the CFO, will review the financial results and outlook [2] Conference Call Details - Participants must register to join the live call and will receive a dial-in number and unique PIN after registration [3] - An audio-only webcast of the conference call will be available, and a replay will be accessible for approximately one year on NTIC's Investor Relations webpage [4]

Market Overview - The market experienced significant selloffs in early April 2025, particularly after the Trump administration's "Liberation Day" tariffs, leading to notable daily point losses, even affecting major companies like Apple Inc. [1] - The S&P 500 index is down approximately 3% for April 2025, contributing to broader year-to-date declines [1] Impinj Inc. - Impinj Inc. has a current stock price of $66.38, with a 12-month price forecast of $183.44, indicating a potential upside of 176.35% [2] - The company provides a cloud connectivity platform for various sectors and has seen its share price decline since October 2024 due to a legal dispute with NXP Semiconductors, which it eventually won [2][3] - Impinj's full-year revenue increased by about 19% year-over-year, with Q4 revenue growth nearly doubling that rate, although the company remains unprofitable [3] - The stock is trading at a price-to-sales (P/S) ratio of 5.2, close to its lowest in five years, suggesting it may be undervalued compared to its industry [4] Northern Technologies International Corp. - Northern Technologies International Corp. has a current stock price of $7.25, with a 12-month price forecast of $20.00, indicating a potential upside of 175.86% [5] - The company has faced a decline of over 40% year-to-date, influenced by a disappointing earnings report rather than the recent market selloff [6] - Despite challenges, the company reported an 8.1% year-over-year increase in net sales from its Chinese market, indicating growth potential [7] - Northern Technologies is trading at a P/S ratio of 0.8, suggesting potential undervaluation, with a Buy rating from an analyst and a price target of $20.00 [8] Seadrill Ltd. - Seadrill Ltd. has a current stock price of $18.99, with a 12-month price forecast of $62.00, indicating a potential upside of 226.50% [9] - The company experienced a sequential revenue decline of over 20% in Q4, with revenue reported at $280 million, but has a backlog of $1 billion [9][10] - Seadrill has repurchased $100 million in shares to enhance shareholder value and has a P/S ratio of 1.0, suggesting it may be an attractive investment opportunity [10][11]

Company Overview - Northern Technologies International Corporation (NTIC) is a leading developer of corrosion inhibiting products and services, as well as bio-based and biodegradable polymer resin compounds [2] - The company operates in over 65 countries through subsidiaries, joint ventures, independent distributors, and agents [2] - NTIC's primary business focuses on corrosion prevention, marketed mainly under the ZERUST® brand, with over 50 years of experience in various markets including automotive, electronics, and military [2] Recent Developments - The Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on May 14, 2025, to shareholders of record at the close of business on April 30, 2025 [1] Product and Service Offerings - NTIC offers a range of proprietary products and services for rust and corrosion prevention, along with technical consulting for specific user needs [2] - The company has expanded its offerings to include bio-based and biodegradable polymer resin compounds marketed under the Natur-Tec® brand [2]

分组1 - Northern Technologies (NTIC) reported a quarterly loss of $0.03 per share, missing the Zacks Consensus Estimate of $0.06, and down from earnings of $0.18 per share a year ago, representing an earnings surprise of -150% [1] - The company posted revenues of $19.07 million for the quarter ended February 2025, missing the Zacks Consensus Estimate by 5.58%, and down from $20.84 million year-over-year [2] - Northern Technologies shares have declined approximately 27.8% since the beginning of the year, compared to a decline of -7.2% for the S&P 500 [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $23.2 million, and for the current fiscal year, it is $0.56 on revenues of $90.2 million [7] - The Zacks Industry Rank for Chemical - Diversified is currently in the bottom 16% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Financial Data and Key Metrics Changes - For the second quarter ended February 28, 2025, total consolidated net sales decreased by 8.5% to $19.1 million compared to the same period last year [11] - Gross profit as a percentage of net sales was 35.6%, down from 40.0% in the prior fiscal year period, reflecting a less profitable mix of sales [25][26] - Net income for the second quarter was $434,000, or $0.04 per diluted share, compared to $1.7 million, or $0.17 per diluted share, for the fiscal 2024 second quarter [26] Business Line Data and Key Metrics Changes - Xero's oil and gas net sales decreased by 28.5%, while NatureTech net sales decreased by 11.8%, and Xero's industrial net sales decreased by 3.7% [11] - NatureTech sales were $5 million in the second quarter, down from $5.6 million in the same period a year ago, attributed to order timing and seasonal variation [19] - Xero's oil and gas sales were $1.5 million in the second quarter, compared to $2.2 million in the same period last year, with a trailing 12-month sales increase of 7.2% [16][17] Market Data and Key Metrics Changes - Joint venture sales decreased by 15.7% year-over-year to $19.8 million, reflecting high energy prices and regional economic pressures in Europe [12] - NTIC China subsidiary reported a net sales increase of 8.1% to $3.7 million, stabilizing and approaching sales levels from fiscal 2021 and 2022 [13][14] Company Strategy and Development Direction - The company is focused on strategic investments in oil and gas sales infrastructure to support growth expected in the second half of fiscal 2025 [18] - A disciplined approach to managing cash, including adjustments to quarterly dividends and prioritizing debt reduction, is intended to position the company for future growth opportunities [10][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the increasing intensity of headwinds, including changes in U.S. trade policies and economic conditions, but expressed confidence in a rebound in NatureTech and U.S. oil and gas sales in the second half of the fiscal year [7][9] - The leadership team emphasized their experience in navigating challenging economic periods and the strength of the company's balance sheet [21][22] Other Important Information - The company declared a quarterly cash dividend of $0.07 per common share, with plans to adjust the dividend to one cent per share in the next quarter [30] - As of February 28, 2025, working capital was $21.4 million, with outstanding debt of $8.1 million [28][29] Q&A Session Summary Question: How are the investments in the oil and gas sales team working out? - The company hired eight people, some of whom did not work out, but expects the impact to show in the second half of the year [34] Question: What are the dynamics behind potential issues in the compostable business? - A large distributor in the U.S. has been added, which is expected to significantly boost business, along with a new line of technology in food packaging [36] Question: What is the current state of the core business? - The core business is expected to remain flat [41] Question: Can you provide more color on the gross margin decline? - Increased pricing pressures in the NatureTech business led to a decrease in sales prices, impacting gross margins [46][48] Question: What is the outlook for the oil and gas business in the second half? - The company anticipates growth primarily in oil storage tank bottoms and pipeline casings, with significant business expected from large customers [60]

Financial Data and Key Metrics Changes - For the second quarter ended February 28, 2025, total consolidated net sales decreased by 8.5% to $19.1 million compared to the same period last year [11] - Gross profit as a percentage of net sales was 35.6%, down from 40.0% in the prior fiscal year period, reflecting a less profitable mix of sales [25][26] - Net income for the second quarter was $434,000, or $0.04 per diluted share, compared to $1.7 million, or $0.17 per diluted share, for the same period last year [26] Business Line Data and Key Metrics Changes - Xero's oil and gas net sales decreased by 28.5%, while NatureTech net sales decreased by 11.8%, and Xero's industrial net sales decreased by 3.7% [11] - NatureTech sales were $5 million, down from $5.6 million in the same period a year ago, attributed to order timing and seasonal variation [19] - Xero's oil and gas sales were $1.5 million, down from $2.2 million in the same period last year, but showed a 7.2% increase on a trailing 12-month basis [16][17] Market Data and Key Metrics Changes - Joint venture sales decreased by 15.7% year-over-year to $19.8 million, reflecting high energy prices and regional economic pressures in Europe [12] - NTIC China subsidiary reported an 8.1% increase in net sales to $3.7 million, stabilizing and approaching sales levels from fiscal 2021 and 2022 [13][14] Company Strategy and Development Direction - The company is focused on managing cash, reducing debt, and enhancing flexibility, with a disciplined approach to capital allocation [10][30] - Strategic investments are being made to support expected growth in the oil and gas business in the second half of the fiscal year [25] - The company remains committed to long-term growth opportunities in the Chinese market for industrial and bioplastic segments [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the increasing intensity of headwinds due to changes in U.S. trade and economic policies, but expressed confidence in a rebound in NatureTech and U.S. oil and gas sales in the second half of the fiscal year [7][9] - The leadership team has successfully navigated previous economic challenges and believes the current business model provides flexibility to handle uncertainties [21][22] Other Important Information - The company declared a quarterly cash dividend of $0.07 per common share, with plans to adjust the quarterly dividend to one cent per share to manage cash position [30] - As of February 28, 2025, working capital was $21.4 million, with outstanding debt of $8.1 million [28][29] Q&A Session Summary Question: How are the investments in the oil and gas sales team working out? - The company hired eight people, some of whom did not work out, but expects the impact to show in the second half of the year [34] Question: What are the dynamics behind potential issues in the compostable business? - A large distributor in the U.S. has been added, which is expected to significantly boost business, along with a new line of technology in food packaging [36] Question: Was the employee retention payment an actual cash payment? - Yes, it was an actual cash payment [38] Question: How is the core business performing currently? - The core business is expected to remain flat [41] Question: Can you provide more details on the gross margin decline? - The decline was due to increased pricing pressures in the NatureTech business, leading to a decrease in sales prices [46][47] Question: What is the outlook for the oil and gas business in the second half? - The focus will be on oil storage tank bottoms and pipeline casings, with expectations of significant business from large customers [60] Question: How is the situation in Brazil regarding the oil and gas industry? - Brazil is performing well, with significant business and ramping sales in the oil and gas sector [67]

Financial Performance - Net sales for the three months ended February 28, 2025, were $19,072,066, a decrease of 8.5% compared to $20,842,538 for the same period in 2024[15] - Net income attributable to Northern Technologies International Corporation (NTIC) for the three months ended February 28, 2025, was $434,319, compared to $1,701,169 for the same period in 2024, a decline of 74.5%[15] - Net income for the six months ended February 28, 2025, was $1,396,774, compared to $2,953,469 for the same period in 2024, representing a decrease of approximately 53%[22] - Operating loss for the three months ended February 28, 2025, was $(332,933), compared to operating income of $2,206,271 for the same period in 2024[15] - NTIC's consolidated net sales decreased by 8.5% to $19,072,066 for the three months ended February 28, 2025, and by 1.5% to $40,410,459 for the six months ended February 28, 2025, compared to the same periods in the prior year[77] Assets and Liabilities - Total current assets decreased to $39,624,812 as of February 28, 2025, from $41,579,219 as of August 31, 2024, a reduction of 4.7%[12] - Total assets decreased to $93,695,214 as of February 28, 2025, from $94,676,502 as of August 31, 2024, a decline of 1.0%[12] - Total liabilities increased to $19,849,535 as of February 28, 2025, from $19,501,181 as of August 31, 2024, an increase of 1.8%[12] - NTIC's working capital was $21,416,426 as of February 28, 2025, down from $23,682,276 as of August 31, 2024[101] Cash Flow - Cash flows from operating activities for the six months ended February 28, 2025, were $3,198,741, down from $5,643,007 in the prior year, indicating a decline of about 43%[22] - Cash and cash equivalents increased to $5,090,630 as of February 28, 2025, from $4,952,184 as of August 31, 2024, an increase of 2.8%[12] - Net cash provided by operating activities during the six months ended February 28, 2025, was $3,198,741, a decrease from $5,643,007 for the same period in 2024[116] - Net cash used in investing activities for the six months ended February 28, 2025, was $2,580,757, compared to $1,505,927 for the same period in 2024[120] Expenses - Research and development expenses for the six months ended February 28, 2025, were $2,632,296, an increase from $2,348,177 in the prior year, reflecting a growth of 12.1%[15] - General and administrative expenses increased by 13.0% for the three months and 11.3% for the six months ended February 28, 2025, as a percentage of net sales rising to 19.2% and 18.6%, respectively[89] - Selling expenses decreased by 6.4% for the three months but increased by 4.1% for the six months ended February 28, 2025, with selling expenses as a percentage of net sales rising to 20.3% and 20.1%, respectively[88] Dividends - The company declared cash dividends of $0.07 per common share for both the three and six months ended February 28, 2025, consistent with the prior year[15] - The company paid dividends of $1,325,872 to stockholders during the six months ended February 28, 2025, compared to $1,319,866 in the prior year, reflecting a slight increase[22] Joint Ventures - NTIC's share of joint ventures' equity as of February 28, 2025 was $25,041,302, with undistributed earnings amounting to $24,096,958[39] - For the three months ended February 28, 2025, net sales from joint ventures totaled $19,799,875, with a gross profit of $8,241,116 and net income of $1,219,970[39] - Equity in income from joint ventures decreased by 47.3% to $620,730 for the three months and by 23.2% to $1,750,323 for the six months ended February 28, 2025, reflecting lower net sales and profitability from joint ventures[86] Stock and Compensation - Stock-based compensation expense for the six months ended February 28, 2025, was $676,334, slightly lower than $694,874 for the same period in 2024[22] - The company recognized stock option compensation expense of $602,821 for the six months ended February 28, 2025, compared to $694,874 for the same period in 2024[53] - As of February 28, 2025, the company had $1,618,997 of unrecognized stock option compensation expense expected to be recognized over 2.5 years[53] Market and Operational Risks - NTIC is exposed to foreign currency exchange rate risks, particularly with the Euro, Japanese Yen, Indian Rupee, Chinese Renminbi, South Korean Won, and British Pound against the U.S. Dollar[128] - The company has identified potential risks related to supply chain disruptions and the impact of geopolitical tensions on its operations and profitability[134] - NTIC's future performance may be affected by the automotive industry's shift towards electric vehicles and the associated market dynamics[134] Future Outlook - NTIC's management is focusing on expanding into the oil and gas industry, which is expected to enhance the demand for ZERUST® corrosion prevention solutions[73] - The Natur-Tec® product line is seeing significant opportunities, with ongoing efforts to expand the North American distribution network for bioplastic products[74] - NTIC expects to continue investing in joint ventures, research and development, and marketing efforts throughout fiscal 2025[103]