Northern Technologies International Corporation Reports 5.7% Sales Increase, Net Income Declines

Northern Technologies International Corporation (NTIC) reported a consolidated net sales increase of 5.7% for the three months ended November 30, 2024, reaching $21.34 million compared to $20.18 million in the same period last year. The growth was primarily driven by a 22.8% rise in sales of Natur-Tec® products, which accounted for 27.5% of total sales, while ZERUST® products, which made up 72.5% of sales, saw a modest increase of 0.5%. Despite the revenue growth, NTIC's net income attributable to the company decreased to $561,091, or $0.06 per diluted share, down from $895,521, or $0.09 per diluted share, in the prior year.

The company's operating expenses rose significantly by 14% to $9.47 million, attributed to strategic investments in ZERUST® oil and gas sales infrastructure, increased personnel costs, and higher travel and professional fees. This increase in expenses contributed to a decline in operating income, which fell to $1.11 million from $1.38 million in the previous year. Additionally, NTIC's equity in income from joint ventures increased by 2.5% to $1.13 million, reflecting improved performance from its joint ventures, particularly in Germany.

NTIC's balance sheet as of November 30, 2024, showed total assets of $94.04 million, a slight decrease from $94.68 million at the end of the previous fiscal year. Current assets decreased to $40.30 million, primarily due to a reduction in trade receivables. The company reported a working capital of $22.18 million, down from $23.68 million, with cash and cash equivalents increasing to $5.57 million. The company maintained compliance with its credit agreements, with borrowings under its line of credit totaling $4.52 million.

Looking ahead, NTIC anticipates continued volatility in its earnings due to inflationary pressures and supply chain disruptions. The company plans to invest in its ZERUST® and Natur-Tec® product lines, particularly in the oil and gas sector, where it sees significant growth potential. NTIC's management remains focused on expanding its market presence and enhancing operational efficiencies to navigate the challenges posed by fluctuating market conditions.