Northern Technologies International Corporation Reports 15.3% Sales Increase but Net Loss in Q2 Fiscal 2026

Northern Technologies International Corporation (NTIC) reported its financial results for the second quarter of fiscal 2026, revealing a consolidated net sales increase of 15.3% to $21.997 million for the three months ended February 28, 2026, compared to $19.072 million for the same period in the previous year. For the six months, net sales rose 12.1% to $45.306 million, up from $40.410 million. The growth was primarily driven by increased demand for both the ZERUST® and Natur-Tec® product lines, with ZERUST® products accounting for 74.9% of total sales, reflecting a 14.7% increase.

Despite the revenue growth, NTIC reported a net loss attributable to the company of $35,323, or $0.00 per diluted share, for the three months ended February 28, 2026, a decline from a net income of $434,319, or $0.04 per diluted share, in the prior year. For the six-month period, net income attributable to NTIC decreased to $202,496, or $0.02 per diluted share, from $995,410, or $0.10 per diluted share, in the same period last year. The losses were attributed to increased operating expenses, higher interest expenses, and a lack of other income that had previously benefited the company.

Operationally, NTIC's total income from joint venture operations increased by 19.8% to $2.027 million for the three months and by 5.2% to $4.318 million for the six months, driven by higher sales at its joint ventures. However, fees for services provided to joint ventures decreased by 13.5% and 15.3% for the respective periods, primarily due to changes in fee structures related to tax planning. The company’s total operating expenses rose by 7.7% to $9.502 million for the three months and by 5.2% to $19.243 million for the six months, largely due to strategic investments in marketing and sales efforts.

As of February 28, 2026, NTIC reported total assets of $104.898 million, up from $102.745 million at the end of the previous fiscal year. The company’s cash and cash equivalents decreased to $6.470 million from $7.251 million, while current liabilities increased to $25.018 million from $23.904 million. NTIC's working capital stood at $20.202 million, slightly down from $20.439 million as of August 31, 2025. The company continues to focus on managing its debt, with $11.282 million outstanding under its credit facility, which was recently amended to increase availability to $12 million.

Looking ahead, NTIC anticipates ongoing challenges from inflation and supply chain disruptions, particularly affecting its Natur-Tec® business. The company is implementing measures to mitigate these pressures, including supplier diversification and cost reduction initiatives. NTIC remains optimistic about its growth prospects, particularly in the oil and gas sector, where it has secured significant contracts that are expected to positively impact future sales.