Northern Technologies International (US:NTIC)2025-11-20 21:00Sales Performance - In fiscal 2025, 74.2% of NTIC's consolidated net sales, amounting to $62,488,397, were derived from ZERUST® corrosion prevention solutions, reflecting a decrease of 1.0% from fiscal 2024[30]. - NTIC's consolidated net sales from Natur-Tec® resin compounds and finished products were $21,746,077 in fiscal 2025, representing a slight decrease of 1.0% compared to fiscal 2024, accounting for 25.8% of total consolidated net sales[43]. - Sales of ZERUST® corrosion prevention solutions to the oil and gas industry totaled $7,317,704 in fiscal 2025, a decrease of 20.7% from fiscal 2024, although consistent re-orders from large customers were noted[37]. Product Offerings - NTIC's ZERUST® packaging products utilize proprietary chemical formulations that inhibit rust and corrosion, providing significant savings in labor, material, and capital expenditures compared to traditional methods[31]. - The Z-CIS® technical services system has been utilized by several major automotive companies to improve and control their corrosion management processes[36]. - Natur-Tec® resin compounds are engineered for high performance and reduced cost, allowing for processing using conventional plastic manufacturing methods[44]. - Natur-Tec® flexible film resin compounds are fully compostable and certified by organizations such as BPI and TÜV Austria, meeting international standards for compostable plastics[47]. - NTIC has developed unique corrosion inhibiting solutions for the oil and gas industry, addressing aggressive corrosion in critical infrastructure and extending service life[38]. - The introduction of products like AutoFog allows for rapid VCI saturation in large volume spaces, enhancing corrosion protection capabilities[45]. - NTIC's ZERUST® solutions for oil and gas infrastructure are tailored to customer requirements, addressing specific environmental conditions and enhancing protection against corrosion[42]. - Natur-Tec® compostable injection molding resin compounds are made with at least 90% bio-based materials, enhancing sustainability by replacing petroleum-based plastics[49]. - Natur-Bag® product line includes 15 different compostable trash bag sizes, certified fully compostable, and marketed through retail and industrial channels[50]. Market Trends - NTIC expects the U.S. market for bio-plastic solutions to continue growing due to legislation aimed at reducing single-use plastics, with a significant ban on plastic bags enacted in multiple states[54]. Research and Development - NTIC anticipates spending between $4,900,000 and $5,100,000 on research and development activities in fiscal 2026[61]. Financial Performance - NTIC had an estimated order backlog of $4,184,415 as of August 31, 2025, down from $5,837,430 as of August 31, 2024[71]. - NTIC's revenue is primarily derived from one-time purchase orders and short-term contracts, with revenue recognized upon the transfer of control of goods[298]. - The company assesses its investments in joint ventures for impairment annually, with additional evaluations performed if financial performance expectations are not met[295]. - Goodwill is tested for impairment annually, with assessments made more frequently if adverse changes in circumstances occur[300]. - NTIC utilizes the asset and liability method for accounting income taxes, recognizing deferred tax assets and liabilities based on expected future tax consequences[305][306]. - The company measures stock-based compensation costs based on the fair value of equity instruments issued, recognizing costs over the service period[304]. - NTIC's consolidated financial statements include accounts of its wholly owned subsidiaries but do not include accounts of its joint ventures[294]. - The company records trade receivables and fees for services provided to joint ventures as separate line items in its consolidated financial statements[289]. - NTIC's revenue recognition policy for joint ventures aligns with its policy for unaffiliated customers, ensuring consistency in financial reporting[290]. Workforce and Management - As of August 31, 2025, NTIC had a total of 94 employees, with 91 full-time and 3 part-time employees, including 28 in sales and marketing, 24 in research and development, 22 in administration, and 20 in production[73]. - NTIC's North American workforce is composed of 41% female employees and 31% racially or ethnically diverse individuals[74]. - The average tenure of NTIC employees is nine years, indicating a stable workforce[75]. - NTIC had only one lost time incident in both fiscal 2025 and 2024, reflecting strong safety performance[80]. - NTIC's management team has an average tenure of 17 years, suggesting experienced leadership[76]. - The company offers competitive compensation and benefits, including a 401(k) plan with matching contributions and profit-sharing options[84][85]. - NTIC provides employees with immediate eligibility for its medical plan, which has no co-pay and does not require premium contributions[86]. - Full-time employees are eligible for paid holidays and vacation time ranging from 15 to 25 days based on service length[87]. - NTIC is committed to equal opportunity and has policies in place to prevent discrimination and harassment[81][82]. - The company emphasizes health, safety, environment, and security (HSE&S) as core values and is dedicated to continuous improvement in these areas[78][79]. Joint Ventures - NTIC has established a joint venture network for approximately 30 years, participating in 15 active joint ventures across North America, Europe, and Asia[290]. - Revenue recognition for sales to joint ventures occurs when products are shipped, with fees based on either a flat fee or a percentage of sales[291][299].