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]