Northern Technologies International Corporation Reports 12.6% Sales Growth but Net Loss in Third Quarter

Northern Technologies International Corporation (NTIC) reported its financial results for the third quarter and nine months ended May 31, 2026, revealing a consolidated net sales increase of 12.6% to $24.2 million for the quarter and 12.3% to $69.5 million for the nine-month period compared to the same periods in 2025. The growth was primarily driven by increased demand for both its ZERUST® and Natur-Tec® product lines, with ZERUST® sales accounting for 74.9% of total net sales, reflecting a 15% increase. However, the company experienced a net loss attributable to NTIC of $263,291, or $0.03 per diluted share, for the quarter, contrasting with a net income of $121,775, or $0.01 per diluted share, in the prior year. For the nine months, the net loss was $60,795 compared to a profit of $1.1 million in 2025.

The company's cost of goods sold (COGS) as a percentage of net sales increased to 66.4% for the quarter and 64.9% for the nine months, up from 61.6% and 62.5%, respectively, in the previous year. This rise was attributed to higher raw material prices and discounts on selling prices. Operating expenses also increased, with total operating expenses rising 5.3% for the quarter and 5.2% for the nine months, largely due to strategic investments in ZERUST® oil and gas marketing and sales efforts.

NTIC's joint venture operations contributed positively, with total income from these operations increasing 12.2% to $2.6 million for the quarter and 7.7% to $6.9 million for the nine months. The net sales at NTIC's joint ventures rose 15.1% and 11.8% to $26.7 million and $74.7 million, respectively, during the same periods. However, fees for services provided to joint ventures decreased by 20.6% for the quarter and 17.2% for the nine months, primarily due to modifications in fee structures related to tax planning.

In terms of strategic developments, NTIC announced the suspension of its quarterly cash dividend to focus on reducing outstanding debt, which stood at $11.8 million under its credit facility as of May 31, 2026. The company is actively working to improve its financial position and has implemented measures to mitigate inflationary pressures and supply chain disruptions. Looking ahead, NTIC anticipates continued volatility in its earnings due to external factors such as geopolitical tensions and market conditions affecting its oil and gas product sales, as well as ongoing challenges in the biodegradable plastics market.