Q3 2026 Northern Technologies International Corp Earnings Call Transcript
Key Points
- Northern Technologies International Corp (NTIC) achieved record quarterly consolidated sales, driven by strong global demand for Zerust corrosion prevention and Natur-Tec bioplastic solutions.
- Zerust Oil & Gas sales increased by 72.3% year-over-year, marking the fourth consecutive quarter with sales over $2 million.
- Joint venture sales increased by 15.1% year-over-year, reflecting improved demand across various markets.
- The company is pursuing pricing and procurement initiatives expected to improve gross margin and profitability in the fourth quarter.
- NTIC's liquidity and financial flexibility remain solid, supported by significant capital within its joint venture network and anticipated proceeds from the sale of its Beachwood, Ohio facility.
- Higher raw material costs due to geopolitical disruptions in the Middle East negatively impacted gross margins, reducing them by approximately 477 basis points year-over-year.
- NTIC reported a net loss of $263,000 for the fiscal 2026 third quarter, compared to net income in the same period last year.
- Operating expenses increased by 5.3% year-over-year, primarily due to higher selling, general, and administrative expenses.
- The company's gross profit as a percentage of net sales decreased to 33.6% from 38.4% in the prior fiscal year period.
- Sales at NTIC China decreased slightly by less than 1%, indicating challenges in maintaining growth in that market.
Good day and welcome to NTIC's third quarter 2026 earnings conference call and webcast. (Operator Instructions) The call is being recorded. As part of the discussion today, the representatives from NTIC will be making certain forward-looking statements regarding NTIC's future financial and operating results, as well as their business plans, objectives, and expectations.
Please be advised that these forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and that NTIC desires to avail itself of the protections of the Safe Harbor for these statements. Please also be advised that actual results could differ materially from those stated or implied by the forward-looking statements due to certain risks and uncertainties, including those described in NTIC's most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and recent press releases.
Please read these reports and other future filings that NTIC will make with the SEC. NTIC disclaims any duty to update or revise its forward-looking statements.
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