Northern Technologies International Corporation Reports 9.2% Revenue Growth but Declining Net Income

Northern Technologies International Corporation (NTIC) reported its financial results for the three months ended November 30, 2025, revealing a consolidated net sales increase of 9.2% to $23.3 million, compared to $21.3 million in the same period last year. The growth was primarily driven by a 11.9% rise in sales of its ZERUST® products, which accounted for 74.3% of total sales, and a 2.2% increase in Natur-Tec® products, which made up 25.7% of sales. However, the company's net income attributable to NTIC decreased to $237,819, or $0.03 per diluted share, down from $561,091, or $0.06 per diluted share, in the prior year, largely due to increased operating expenses and interest costs.

The company's cost of goods sold (COGS) rose by 13.3% to $14.9 million, resulting in a COGS percentage of net sales increasing to 64.0% from 61.7% in the previous year. This increase was attributed to higher raw material prices and discounts on selling prices. NTIC's total operating expenses also saw a slight increase of 2.9% to $9.7 million, driven by strategic investments in marketing and sales efforts, particularly in the oil and gas sector. The company’s equity in income from joint ventures increased by 8.2% to $1.2 million, reflecting improved performance in some joint ventures despite a decline in others.

Operationally, NTIC maintained a strong balance sheet with total assets of $104 million as of November 30, 2025, up from $102.7 million at the end of the previous fiscal year. The company reported a working capital of $19.4 million, with cash and cash equivalents totaling $6.4 million. NTIC's employee headcount remained stable, and the company continues to focus on expanding its market presence, particularly in the oil and gas industry, where it secured a significant contract in Brazil expected to generate substantial revenue over the next few years.

Looking ahead, NTIC anticipates continued challenges from inflation and supply chain disruptions, which may impact its profitability. The company is actively implementing measures to mitigate these pressures, including supplier diversification and cost-reduction initiatives. NTIC's management remains optimistic about future growth opportunities, particularly in the oil and gas sector and the expanding market for biodegradable plastics, as it continues to invest in its product lines and geographic expansion.

In summary, while NTIC experienced revenue growth in the latest quarter, profitability was affected by rising costs and operational challenges. The company is strategically positioned to leverage its market opportunities, particularly in environmentally sustainable products, as it navigates the complexities of the current economic landscape.