Northern Technologies International Corporation Reports Financial Results for Second Quarter Fiscal 2025

Core Viewpoint - Northern Technologies International Corporation (NTIC) reported a decrease in net sales and net income for the second quarter of fiscal 2025, attributing the decline to various headwinds including changes in U.S. trade policies and seasonality in its industrial and oil and gas businesses. The company anticipates a rebound in sales for its Natur-Tec® and ZERUST® products in the latter half of the fiscal year [1][2][3]. Financial Performance - NTIC's consolidated net sales decreased by 8.5% to $19,072,000 for the three months ended February 28, 2025, compared to $20,843,000 for the same period in 2024 [3][5]. - For the first half of fiscal 2025, consolidated net sales decreased by 1.5% to $40,410,000, down from $41,024,000 in the prior year [3][6]. - The gross profit margin decreased by 440 basis points to 35.6% [5]. - Net income attributable to NTIC was $434,000, or $0.04 per diluted share, compared to $1,701,000, or $0.17 per diluted share, for the same period last year [9][10]. Product Category Performance - ZERUST® industrial net sales decreased by 3.7% to $12,562,853, while ZERUST® oil and gas net sales fell by 28.5% to $1,549,164 [4][5]. - Total Natur-Tec® net sales decreased by 11.8% to $4,960,049 [4][5]. - NTIC China net sales increased by 8.1% to $3,735,000 [5]. Operating Expenses and Income - Operating expenses increased by 2.4% to $8,820,000 for the three months ended February 28, 2025, with operating expenses as a percentage of net sales rising to 46.2% [7][22]. - Joint venture operating income decreased by 31.8% to $1,691,000 [6][9]. Cash Flow and Working Capital - Cash provided by operating activities was $3,199,000 for the six months ended February 28, 2025 [5]. - NTIC had working capital of $21,416,000 as of February 28, 2025, including $5,091,000 in cash and cash equivalents [11]. Strategic Outlook - The company is temporarily adjusting its quarterly dividend to $0.01 per share and prioritizing debt reduction to position itself for future growth opportunities in its oil and gas and compostable plastics businesses [2][17].