or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2022 (Exact name of registrant as specified in its charter) Delaware 41-0857886 (I.R.S. Employer Identification No.) (State or other jurisdiction of incorporation or organization) 4201 Woodland Road P.O. Box 69 Circle Pines, Minnesota (Address of principal exec ...

Northern Technologies International Corporation (NASDAQ:NTIC) Q4 2022 Earnings Conference Call November 14, 2022 9:00 AM ET Company Participants Patrick Lynch - Chief Executive Officer Matt Wolsfeld - Chief Financial Officer Conference Call Participants Tim Clarkson - Van Clemens Gus Richard - Northland Capital Markets Operator Good day and thank you for standing by. Welcome to NTIC???s Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker ...

PART I—FINANCIAL INFORMATION Details the company's financial statements, management analysis, market risks, and internal controls [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents NTIC's unaudited consolidated financial statements as of May 31, 2022, covering balance sheets, operations, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$85.2 million** from **$74.4 million**, driven by inventories and intangibles, liabilities also rose Consolidated Balance Sheet Highlights (as of May 31, 2022 vs. August 31, 2021) | Balance Sheet Item | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,123,269 | $7,680,641 | | Inventories | $13,866,229 | $11,114,207 | | Total current assets | $38,968,265 | $33,747,089 | | Goodwill | $4,782,376 | $0 | | Intangible asset, net | $6,029,650 | $0 | | **Total assets** | **$85,185,397** | **$74,370,879** | | Line of credit | $4,700,000 | $0 | | Total current liabilities | $14,241,487 | $8,516,196 | | **Total liabilities** | **$16,509,727** | **$8,620,298** | | **Total equity** | **$68,675,670** | **$65,750,581** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Nine-month net sales grew **31.5%** to **$53.9 million**, net income reached **$5.7 million** due to a **$3.95 million** remeasurement gain Consolidated Statements of Operations Summary | Metric | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | | Total net sales | $53,906,973 | $40,980,518 | | Gross profit | $16,929,353 | $13,982,936 | | Operating income | $3,534,770 | $6,063,068 | | Remeasurement gain on acquisition | $3,951,550 | $0 | | Net income attributable to NTIC | $5,676,773 | $4,628,890 | | Diluted EPS | $0.59 | $0.47 | Quarterly Performance (Three Months Ended May 31) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Total net sales | $18,964,921 | $15,418,524 | | Gross profit | $6,242,088 | $5,265,942 | | Operating income | $1,822,936 | $2,578,754 | | Net income attributable to NTIC | $1,000,167 | $2,053,916 | | Diluted EPS | $0.11 | $0.21 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Nine-month operating cash flow was **$1.8 million**, investing used **$6.5 million** for Zerust India, resulting in a **$1.6 million** cash decrease Cash Flow Summary (Nine Months Ended May 31) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,778,094 | $1,053,695 | | Net cash used in investing activities | ($6,531,034) | ($399,780) | | Net cash provided by (used in) financing activities | $2,634,650 | ($1,309,609) | | **Net decrease in cash** | **($1,557,372)** | **($522,109)** | - The acquisition of the Zerust India business was the primary use of cash in investing activities, costing **$5,062,003** net of cash acquired[23](index=23&type=chunk) - The company drew **$4,700,000** from its line of credit, which was a major source of financing cash flow[23](index=23&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, COVID-19 impact, Zerust India acquisition gain, segment sales, and corporate debt - **Business Combination:** The company acquired the remaining **50%** of its Indian joint venture, Zerust India, for **$6.25 million** in cash, effective September 1, 2021. This resulted in the recognition of **$4.8 million** in goodwill, **$6.3 million** in customer relationships, and a remeasurement gain of **$3.95 million**[31](index=31&type=chunk)[34](index=34&type=chunk)[39](index=39&type=chunk) - **COVID-19 Impact:** The company continued to be impacted by shipping issues, supply chain disruptions, longer lead times, and raw material cost increases during the first nine months of fiscal 2022[27](index=27&type=chunk) Segment Net Sales (Nine Months Ended May 31) | Segment | 2022 | 2021 | | :--- | :--- | :--- | | ZERUST® net sales | $41,988,394 | $32,882,882 | | Natur-Tec® net sales | $11,918,579 | $8,097,636 | | **Total net sales** | **$53,906,973** | **$40,980,518** | - **Corporate Debt:** The company has a revolving line of credit with PNC Bank, which was temporarily increased to **$7.0 million**. As of May 31, 2022, **$4.7 million** was outstanding, primarily used to fund the Zerust India acquisition[51](index=51&type=chunk)[53](index=53&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and nine-month fiscal 2022 performance, covering business overview, financial highlights, results, and liquidity [Business Overview](index=25&type=section&id=Business%20Overview) NTIC operates in ZERUST® corrosion prevention and Natur-Tec® bio-based polymer products, serving industrial and environmental markets - The company's primary business is corrosion prevention, marketed mainly under the ZERUST® brand, with a history of over **45 years**[81](index=81&type=chunk) - A key strategic initiative is the expansion of ZERUST® corrosion prevention technologies into the oil and gas industry[84](index=84&type=chunk) - The Natur-Tec® brand offers a portfolio of bio-based and certified compostable polymer resins and finished products intended to replace conventional plastics[81](index=81&type=chunk)[87](index=87&type=chunk) [Financial Overview and Highlights](index=28&type=section&id=Financial%20Overview%20and%20Highlights) Nine-month consolidated net sales grew **31.5%**, driven by Zerust India acquisition, with net income boosted by a **$3.95 million** gain - Consolidated net sales increased **31.5%** for the nine months ended May 31, 2022, positively affected by the Zerust India acquisition and increased demand[102](index=102&type=chunk) - Equity in income from joint ventures decreased by **36.6%** for the nine-month period, primarily because Zerust India is now a consolidated subsidiary and due to lower gross margins at other joint ventures[102](index=102&type=chunk) - Net income for the nine-month period included a **$3,951,550** gain from the remeasurement of the previously held equity interest in Zerust India[106](index=106&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Nine-month net sales rose **31.5%** to **$53.9 million**, COGS increased to **68.6%**, and equity income from JVs decreased **36.6%** Net Sales by Segment (Nine Months Ended May 31) | Segment | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Total ZERUST® sales | $41,988,394 | $32,882,882 | +27.7% | | Total Natur-Tec® sales | $11,918,579 | $8,097,636 | +47.2% | | **Total net sales** | **$53,906,973** | **$40,980,518** | **+31.5%** | - Cost of goods sold as a percentage of net sales increased to **68.6%** for the nine-month period from **65.9%** in the prior year, primarily due to price increases on raw materials, labor, and shipping[113](index=113&type=chunk) - Equity in income from joint ventures decreased **36.6%** to **$3.7 million** for the nine-month period, mainly because Zerust India is no longer accounted for under the equity method post-acquisition[114](index=114&type=chunk) - Total operating expenses increased by **15.5%** for the nine-month period, with the Zerust India acquisition contributing **$1.7 million** in incremental expenses[102](index=102&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital was **$24.7 million**, with **$4.7 million** outstanding on the credit line, temporarily increased to **$7.0 million** - Working capital was **$24.7 million** as of May 31, 2022, compared to **$25.2 million** as of August 31, 2021[129](index=129&type=chunk) - The company had **$4.7 million** outstanding on its revolving line of credit as of May 31, 2022, primarily used to fund the Zerust India acquisition. The line of credit was temporarily increased from **$5.0 million** to **$7.0 million**[130](index=130&type=chunk) - The company terminated its joint venture in Russia in May 2022, which is not expected to have a material adverse effect on financial results[132](index=132&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency, commodity prices, and interest rates, with key exposures to Euro, Yen, and plastic resins - The company is exposed to foreign currency exchange rate risk, with principal exposures to the Euro, Japanese Yen, Indian Rupee, Chinese Renminbi, South Korean Won, and English Pound against the U.S. Dollar[151](index=151&type=chunk)[165](index=165&type=chunk) - Commodity price exposure exists for raw materials, primarily various plastic resins[152](index=152&type=chunk)[166](index=166&type=chunk) - Interest rate risk is present due to the variable rate on the revolving line of credit, which had an outstanding balance of **$4,700,000** as of May 31, 2022[152](index=152&type=chunk)[166](index=166&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal controls beyond Zerust India integration - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[167](index=167&type=chunk) - No material changes were made to internal control over financial reporting during the quarter, except for changes to integrate the newly acquired Zerust India business[168](index=168&type=chunk) PART II—OTHER INFORMATION Covers legal proceedings, risk factors, equity sales, and other material information [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions, but management expects no material adverse effect on financial results - The company is subject to various claims and legal actions in the ordinary course of business, but management does not expect them to have a material impact on the company's financial condition[77](index=77&type=chunk)[169](index=169&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) New risks include the Russia-Ukraine conflict, potentially impacting operations, macroeconomic conditions, and oil prices - The ongoing conflict between Russia and Ukraine is identified as a new risk factor that may adversely affect the company's business and results of operations[170](index=170&type=chunk) - The conflict could heighten other risks, including adverse macroeconomic conditions, increased cybersecurity threats, supply chain disruptions, and capital market volatility[171](index=171&type=chunk) - The sale of ZERUST® products to the oil and gas industry is dependent on oil prices, which may be impacted by the Russia-Ukraine conflict and could cause customers to halt projects or decrease capital budgets[172](index=172&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were issued or shares repurchased in Q3 fiscal 2022, with **$2.64 million** remaining for repurchase - No shares were repurchased during the third quarter of fiscal 2022[174](index=174&type=chunk)[175](index=175&type=chunk) - As of May 31, 2022, **$2,640,548** remained available for repurchase under the company's stock repurchase program[176](index=176&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) The company temporarily increased its revolving line of credit from **$5.0 million** to **$7.0 million** until August 16, 2022 - On May 20, 2022, the company's line of credit was temporarily increased from **$5,000,000** to **$7,000,000** until August 16, 2022[180](index=180&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO/CFO certifications, the amended credit note, and Inline XBRL financial statements - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and the Amended and Restated Revolving Line of Credit Note (10.2)[182](index=182&type=chunk)

Financial Data and Key Metrics Changes - Total consolidated net sales increased 23% to nearly $19 million for Q3 2022 compared to Q3 2021, driven by strong demand and contributions from ZERUST India [8][15] - Gross margin for Q3 2022 was 32.9%, the highest this fiscal year, compared to 34.2% in the prior fiscal period [19] - Net income for Q3 2022 was $1 million, or $0.11 per diluted share, down from $2.1 million or $0.21 per share in Q3 2021 [20] Business Line Data and Key Metrics Changes - Natur-Tec's net sales increased by 48.6% to $4.5 million [8] - ZERUST Oil & Gas net sales rose by 47% [8] - ZERUST Industrial net sales increased by 22.9% [8] - Joint ventures' total net sales decreased by 16.8% to $26.6 million due to geopolitical uncertainties and changes in accounting treatment for ZERUST India [9] Market Data and Key Metrics Changes - NTIC China subsidiary's net sales decreased by 10.2% to $3.6 million due to COVID-19 lockdowns [10] - Sales in China were approximately $1 million short of expectations for Q3 2022, but June showed improvement post-lockdown [27] Company Strategy and Development Direction - The company is optimistic about long-term growth in the Natur-Tec bioplastics business, driven by increasing demand for compostable products [13] - NTIC plans to continue addressing inflationary pressures and expects profitability to improve in Q4 2022 [19][22] - The company is focusing on expanding its oil and gas solutions globally, with strong demand across various regions [11][47] Management's Comments on Operating Environment and Future Outlook - Management noted that while economic uncertainty has increased, they believe fiscal 2022 will be a good year for sales and profitability [22] - The easing of COVID-19 restrictions in China is expected to benefit sales in the short term, with a potential for China to become the largest market [10][27] Other Important Information - Total operating expenses for Q3 2022 were $7.1 million, a 12.7% increase due to the ZERUST India acquisition and higher selling expenses [16] - Working capital as of May 31, 2022, was $24.7 million, including $6.1 million in cash [21] Q&A Session Summary Question: Insights on the oil and natural gas business - Management indicated strong demand and greater installations, with more orders from existing and new customers [25] Question: Impact of lockdowns in China - Lockdowns have recently been lifted, and management expects a gradual return to normalcy over the next six months [26] Question: Response to plastic bans in India and California - Management anticipates increased sales due to new legislation, but implementation and enforcement remain concerns [29][30] Question: Competitive position of Natur-Tec - The company differentiates its products by modifying compostable resins for better processing and mechanical properties, attracting large multinational customers [33] Question: Pricing strategy amid inflation - Management is negotiating price increases on a case-by-case basis and has been able to implement them in a timely manner [39][40] Question: Supply chain constraints for Natur-Tec - There were some constraints in Q3, but expectations for Q4 are strong with adequate inventory and raw materials [46] Question: Geographic strength in oil and gas - Management reported strong orders from various regions, including India, the Middle East, and Europe [47]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to __________________ Commission File Number: 001-11038 ____________________ NORTHERN TECHNOLOGIES INTERNAT ...

Financial Data and Key Metrics Changes - Total consolidated net sales increased 31% to a record $16.7 million for the second quarter of fiscal 2022 compared to the same period in the prior fiscal year [8][20] - Net income for the second quarter was $183,000, or $0.02 per diluted share, down from $1.3 million, or $0.13 per diluted share in the prior year [24] - Gross profit as a percentage of net sales decreased to 29.8% from 33.3% due to increased raw material and labor costs [23] Business Line Data and Key Metrics Changes - ZERUST Oil and Gas net sales increased by 60.1%, Natur-Tec net sales increased by 45.3%, and ZERUST Industrial net sales increased by 24.1% [9] - Natur-Tec sales were $3.6 million, reflecting a return to pre-pandemic demand patterns, particularly in North America and India [14] - The joint ventures reported total net sales of $24.6 million, a decrease of 15.3% compared to the same period last fiscal year [10] Market Data and Key Metrics Changes - NTIC China sales decreased by 6.3% to $4.1 million, impacted by COVID-19 related lockdowns [11] - The company anticipates that China will likely become its largest geographic market in the coming years despite current volatility [11] Company Strategy and Development Direction - The company is focused on passing increased costs onto customers to improve profitability, with expectations of noticeable improvements in operating profits during the second half of fiscal 2022 [7] - The company plans to navigate near-term challenges related to expenses, raw materials, and supply chain issues while maintaining a strong outlook for sales growth and profitability [26][27] Management Comments on Operating Environment and Future Outlook - Management noted that inflation has significantly impacted raw material and labor costs, affecting gross margins and operating profits [6][23] - Despite challenges from the Ukraine conflict and ongoing COVID-19 impacts, management believes sales and profitability will improve throughout the remainder of the fiscal year [18][27] Other Important Information - The company declared a quarterly cash dividend of $0.07 per common share payable on February 16, 2022 [26] - The acquisition of ZERUST India has resulted in increased net sales and operating expenses, affecting financial results for the remainder of fiscal 2022 [22] Q&A Session Summary Question: Have you had resistance from clients regarding price increases? - Management indicated that prices are sticking, and clients have agreed to the necessary increases due to rising raw material costs [31] Question: How big could the oil and gas market potentially become? - Management believes they are currently capturing about 3% of the potential market, which has the potential to grow significantly [32] Question: What is the typical customer for Natur-Tec products? - Typical customers include universities, schools, office parks, and stadiums with food waste diversion programs [35] Question: What differentiates Natur-Tec from competitors? - The patented technology allows Natur-Tec to produce products with higher mechanical strength at a lower cost than competitors [37] Question: What is the impact of goodwill and intangible assets on future earnings? - There will be an ongoing amortization expense of about $100,000 per quarter for 15 years due to the acquisition of ZERUST India [38] Question: How has the China business been affected by recent lockdowns? - The business has slowed down significantly, with March revenue down about 30% compared to expectations [52] Question: What is the outlook for supply disruptions in PLA? - Management indicated that supply disruptions are due to delays in starting manufacturing at several PLA plants, with expectations for improvement in two to three quarters [47]

[PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended November 30, 2021, detailing the impact of the Zerust India acquisition [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$83.2 million** driven by the Zerust India acquisition, with total equity rising to **$69.6 million** Consolidated Balance Sheet Highlights (as of Nov 30, 2021 vs. Aug 31, 2021) | Account | November 30, 2021 | August 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $37,265,090 | $33,747,089 | | **Total Assets** | $83,244,745 | $74,370,879 | | **Total Current Liabilities** | $11,389,728 | $8,516,196 | | **Total Liabilities** | $13,613,901 | $8,620,298 | | **Total Equity** | $69,630,844 | $65,750,581 | - The acquisition of Zerust India resulted in the recognition of **$4.8 million** in Goodwill and **$6.3 million** in a net Intangible asset, which were not present on the August 31, 2021 balance sheet[13](index=13&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Net sales grew **42.4%** to **$18.2 million**, while a **$4.0 million** remeasurement gain from the Zerust India acquisition significantly boosted net income to **$4.5 million** Consolidated Statement of Operations (Three Months Ended Nov 30) | Metric | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $18,193,413 | $12,779,112 | 42.4% | | Gross Profit | $5,702,930 | $4,465,791 | 27.7% | | Operating Income | $1,266,611 | $1,716,577 | -26.2% | | Remeasurement Gain on Acquisition | $3,951,550 | $0 | N/A | | Net Income Attributable to NTIC | $4,493,759 | $1,262,399 | 256.0% | | Diluted EPS | $0.46 | $0.13 | 253.8% | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$3.3 million**, while investing activities used **$5.4 million** primarily for the Zerust India acquisition Cash Flow Summary (Three Months Ended Nov 30) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,319,024 | $1,601,120 | | Net cash used in investing activities | ($5,429,590) | ($1,177,869) | | Net cash provided by financing activities | $1,834,611 | $36,192 | | **Net increase in cash and cash equivalents** | **$366,924** | **$550,309** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the Zerust India acquisition's **$4.0 million** gain, segment sales growth, and the revolving credit facility extension - The company acquired the remaining **50%** ownership of its Indian joint venture, Harita-NTI Limited (Zerust India), for **$6.25 million** in cash, effective September 1, 2021. As a result, Zerust India is now a consolidated subsidiary[27](index=27&type=chunk) - A gain of **$3,951,550** was recognized from remeasuring the previously held **50%** equity interest in Zerust India to its fair value upon acquisition[35](index=35&type=chunk) - On January 4, 2022, the company extended its revolving line of credit with PNC Bank to January 7, 2023. The credit limit will be decreased from **$5.0 million** to **$3.0 million** beginning February 23, 2022[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **42.4%** net sales increase, segment performance, gross margin pressures, and the impact of the Zerust India acquisition on net income [Business Overview and Recent Acquisition](index=23&type=section&id=Business%20Overview%20and%20Recent%20Acquisition) NTIC's core business segments are ZERUST® and Natur-Tec®, with the recent **$6.25 million** acquisition of Zerust India enhancing its market position - The company's primary business is corrosion prevention (ZERUST®), with a secondary focus on bio-based and compostable plastics (Natur-Tec®)[78](index=78&type=chunk) - The acquisition of the remaining **50%** of Zerust India was completed for **$6.25 million**, funded by cash and borrowings. Zerust India is now a consolidated subsidiary[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - The acquisition added **$2,452,812** in net sales and **$292,528** in net income for the quarter and resulted in a one-time gain of **$3,951,550** from remeasuring the previously held equity interest[89](index=89&type=chunk)[90](index=90&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Consolidated net sales increased **42.4%** to **$18.2 million**, driven by segment growth, though gross margin declined due to higher costs, and equity income decreased due to the Zerust India consolidation Net Sales by Segment (Q1 FY2022 vs Q1 FY2021) | Segment | Q1 FY2022 | Q1 FY2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total ZERUST® sales | $14,423,785 | $10,220,551 | $4,203,234 | 41.1% | | Total Natur-Tec® sales | $3,769,628 | $2,558,561 | $1,211,067 | 47.3% | | **Total net sales** | **$18,193,413** | **$12,779,112** | **$5,414,301** | **42.4%** | - Cost of goods sold as a percentage of net sales increased to **68.7%** from **65.1%** in the prior year, primarily due to price increases on raw materials and higher labor costs[118](index=118&type=chunk) - Equity in income from joint ventures decreased by **24.7%** to **$1.4 million**, mainly because Zerust India is now a consolidated subsidiary and its income is no longer accounted for under the equity method[119](index=119&type=chunk) - Total operating expenses increased by **19.6%** to **$7.1 million**, driven by incremental expenses from the Zerust India acquisition and increased personnel and travel costs[110](index=110&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital stood at **$25.9 million** with **$8.0 million** in cash, and the company utilized **$2.5 million** of its revolving credit facility - Working capital was **$25.9 million** as of November 30, 2021, with cash and cash equivalents of **$8.0 million**[132](index=132&type=chunk) - The company has a revolving line of credit with PNC Bank, which was increased to **$5.0 million**. As of November 30, 2021, **$2.5 million** was outstanding[133](index=133&type=chunk) - A cash dividend of **$0.07 per share** was paid on November 17, 2021. The company had previously suspended its dividend in April 2020 before reinstating it in January 2021[147](index=147&type=chunk) - No shares were repurchased during the quarter. **$2,640,548** remains available for repurchase under the authorized plan[146](index=146&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include unhedged foreign currency exposure, commodity price fluctuations, and variable interest rates on its credit facility - The company is exposed to foreign currency exchange rate risk, with principal exposures to the Euro, Japanese Yen, Indian Rupee, Chinese Renminbi, South Korean Won, and English Pound[168](index=168&type=chunk) - NTIC does not hedge against its foreign currency exchange rate risk[168](index=168&type=chunk) - The company is exposed to commodity price changes, primarily for a variety of plastic resins[169](index=169&type=chunk) - Interest rate risk exists due to borrowings on the revolving line of credit, which bear interest at a variable rate (daily LIBOR plus **2.50%**)[169](index=169&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective, with no material changes to internal controls except for the integration of Zerust India - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[170](index=170&type=chunk) - No material changes were made to internal control over financial reporting, except for changes to begin integrating Zerust India's internal controls[171](index=171&type=chunk) [PART II—OTHER INFORMATION](index=42&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal actions, with management assessing no material impact on financial results - The company is subject to various claims and legal actions in the ordinary course of business[70](index=70&type=chunk) - Management believes that any potential liability from these legal matters will not have a material impact on the company's financial condition[70](index=70&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section is inapplicable as the company qualifies as a smaller reporting company - This item is inapplicable as the company is a smaller reporting company[174](index=174&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were issued, and no shares were repurchased under the stock repurchase program during the quarter - No unregistered sales of equity securities occurred during the three months ended November 30, 2021[175](index=175&type=chunk) - The company did not repurchase any of its shares during the quarter[177](index=177&type=chunk) - As of November 30, 2021, up to **$2,640,548** remained available for repurchase under the company's stock repurchase program[180](index=180&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) A revision to the Zerust India acquisition's preliminary purchase price allocation was disclosed, impacting goodwill, deferred tax liability, and intangible assets - The preliminary purchase price allocation for the Zerust India acquisition was revised after the Q1 fiscal 2022 earnings release[181](index=181&type=chunk) - The revision resulted in a **$913,000** increase in goodwill, a **$774,000** increase in deferred tax liability, and a **$139,000** decrease in intangible assets compared to the figures in the earnings release[181](index=181&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including loan agreements, CEO/CFO certifications, and Inline XBRL financial statements - Exhibits filed include the Amended and Restated Loan Agreement with PNC Bank, CEO/CFO certifications (Rule 13a-14(a) and Section 906), and Inline XBRL data[183](index=183&type=chunk)

Northern Technologies International Corporation (NASDAQ:NTIC) Q1 2022 Earnings Conference Call January 6, 2022 9:00 AM ET Company Participants Patrick Lynch - President and Chief Executive Officer Matt Wolsfeld - Chief Financial Officer Conference Call Participants Tim Clarkson - Van Clemens Scott Billeadeau - Walrus Partners Gus Richard - Northland Jim Dowling - Jefferies Operator Good day and thank you for standing by. Welcome to the NTIC Conference Call and Webcast. [Operator Instructions] As part of the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to __________________ Commission file number 001-11038 ____________________ NORTHERN TECHNOLOGIES INTERNATIONAL CORPO ...

Financial Data and Key Metrics Changes - For fiscal 2021, consolidated sales increased by 18.6% compared to the prior fiscal year, with a record quarterly sales growth of 54.7% in Q4 2021 [6][20] - Net income for Q4 2021 was $1.7 million or $0.17 per diluted share, a significant improvement from a net loss of nearly $1.8 million or a loss of $0.19 per diluted share in Q4 2020 [22] - Total operating expenses for Q4 2021 were $6.6 million, a 24.1% increase year-over-year, but operating expenses as a percentage of net sales decreased to 42.5% from 53.0% [21] Business Line Data and Key Metrics Changes - ZERUST oil and gas net sales increased by 139.6% in Q4 2021, while Natur-Tec net sales grew by 51.4% and ZERUST industrial net sales increased by 47.0% [10] - NTIC's joint ventures reported total net sales of $33.2 million in Q4 2021, a 79.3% increase compared to the same period last fiscal year [11] Market Data and Key Metrics Changes - NTIC's China subsidiary saw a 25.7% increase in net sales to $4.3 million in Q4 2021, driven by higher sales to new and existing customers [12] - The Indian joint venture, now wholly owned, is expected to contribute approximately $10 million in net sales and over $2.2 million in net income during fiscal year 2022 [14] Company Strategy and Development Direction - The company is focusing on expanding its operations in China and India, with significant investments in facilities and acquisitions to support growth [13][14] - NTIC aims to leverage its asset-light business model and global presence to navigate supply chain challenges and capitalize on demand trends in industrial production [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong demand trends continuing into fiscal 2022 as global economies reopen and industrial production improves [8] - The company anticipates fiscal 2022 to be another strong year of sales growth and higher profitability, supported by strategic investments in its business units [18][25] Other Important Information - NTIC's Board of Directors declared a quarterly cash dividend of $0.065 per share, which was increased to $0.07 per share in October 2021 [24] - The company reported a working capital of $25.2 million as of August 31, 2021, impacted by a $6.2 million investment in a new facility in China [23] Q&A Session Summary Question: Why is China doing so well? - Management attributed China's success to both domestic and international demand, with increasing domestic demand supporting sales despite slight drops in exports [28] Question: What is the growth rate in India? - India has seen significant year-over-year growth, becoming the second most profitable joint venture for NTIC, with expectations of continued expansion [30][31] Question: What new opportunities exist in the compostable space? - Management noted ongoing demand for compostable plastics but highlighted challenges due to facility reopenings and supply chain issues [34] Question: What is the timeline for API and PHMSA approvals? - Management expects a timeline of 12 to 18 months for the transition from technical report to recognized practice for API guidelines [47] Question: Can the company meet a surge in demand for Natur-Tec? - Management expressed confidence in meeting demand, with expectations of returning to pre-COVID levels by mid-fiscal 2022 [51][53] Question: What impact will ZERUST India have on OpEx and gross margins? - The acquisition of ZERUST India is expected to contribute approximately $1 million in additional income, with gross margins consistent with other subsidiaries [69]