MINNEAPOLIS, July 11, 2024 (GLOBE NEWSWIRE) -- Northern Technologies International Corporation (NASDAQ:NTIC), a leading developer of corrosion inhibiting products and services, as well as bio-based and biodegradable polymer resin compounds, today reported its financial results for the third quarter of fiscal 2024. Third quarter fiscal 2024 financial and operating highlights include (with growth rates on a fiscal quarter year-over-year basis): Consolidated net sales decreased 1.4% to $20,686,000 ZERUST® industrial net sales decreased 4.4% to $13,477,000 ZERUST® oil and gas net sales decreased 31.9% to $1,360,000 – the year-over-year decline was primarily due to the timing of approximately $600,000 of orders that moved from the third quarter of fiscal 2024 to the fourth quarter of fiscal 2024 Natur-Tec® product net sales increased 20.1% to a quarterly record of $5,849,000 NTIC China net sales increased 6.7% to $3,541,000 Gross profit as a percent of third quarter net sales increased 210 basis points to 38.2% Joint venture operating income decreased 3.6% to $2,609,000 Net income attributable to NTIC decreased 7.8% to $977,000 compared to $1,060,000 Net income per diluted share attributable to NTIC was $0.10, compared to $0.11 Cash provided by operating activities increased 116% to $7,584,000 for the nine months ended May 31, 2024, compared to $3,506,000 for the same period last fiscal year "Our third quarter results reflect the progress we are making navigating a fluid macro environment, while capitalizing on growing demand within our Natur-Tec® and ZERUST® oil and gas markets. We achieved record quarterly Natur-Tec® sales driven by continued growth in North America and India for our compostable plastic products and specialty resins. While the timing of approximately $600,000 of shipments impacted third quarter ZERUST® oil and gas sales, demand for our oil and gas solutions is expanding. As a result, we expect to experience a significant rebound in oil and gas sales in the fourth quarter of fiscal 2024," said G. Patrick Lynch, President and CEO of NTIC. "The 210-basis point year-over-year improvement in third quarter gross profit is encouraging and was primarily due to recent strategies underway aimed at offsetting supply chain disruptions and raw material challenges, including the insourcing of various finished goods production. In addition, we continue to make strategic investments in our operations aimed at supporting additional growth opportunities across our global markets – most notably in North America, Brazil, and India. Overall, fiscal 2024 is shaping up to be a strong year of growth, profitability and strategic investments for NTIC. I am excited by the direction we are headed, and proud of the hard work and dedication of our global team members and joint venture partners," concluded Mr. Lynch. NTIC's consolidated net sales decreased 1.4% to $20,686,000 during the three months ended May 31, 2024, compared to $20,970,000 for the three months ended May 31, 2023. The year-over-year decrease in consolidated net sales for the third quarter was primarily due to decreases in demand for ZERUST® products. Additionally, the timing of delivery of products for certain ZERUST® oil and gas orders caused approximately $600,000 of sales to move from the third quarter of fiscal 2024 to the fourth quarter of fiscal 2024. For the nine months ended May 31, 2024, consolidated net sales increased 4.3% to $61,710,000, compared to $59,193,000 for the same period last fiscal year primarily as a result of an increase in sales and demand for Natur-Tec® partially offset by decreases in ZERUST®. The following tables set forth NTIC's net sales by product category for the three and nine months ended May 31, 2024, and May 31, 2023, by segment:   Three Months Ended   May 31,2024   % of NetSales   May 31,2023   % of NetSales   % Change ZERUST® industrial net sales $ 13,477,181   65.1 %   $ 14,103,292   67.3 %   (4.4 %) ZERUST® oil & gas net sales   1,360,054   6.6 %     1,997,382   9.5 %   (31.9 %) Total ZERUST® net sales $ 14,837,235   71.7 %   $ 16,100,674   76.8 %   (7.8 %) Total Natur-Tec® net sales   5,848,962   28.3 %     4,869,052   23.2 %   20.1 % Total net sales $ 20,686,197   100.0 %   $ 20,969,726   100.0 %   (1.4 %)   Nine Months Ended   May 31,2024   % of NetSales   May 31,2023   % of NetSales   % Change ZERUST® industrial net sales $ 40,431,379   65.5 %   $ 40,504,908   68.4 %   (0.2 %) ZERUST® oil & gas net sales   5,029,696   8.2 %     5,424,514   9.2 %   (7.3 %) Total ZERUST® net sales $ 45,461,075   73.7 %   $ 45,929,422   77.6 %   (1.0 %) Total Natur-Tec® net sales   16,249,335   26.3 %     13,263,895   22.4 %   22.5 % Total net sales $ 61,710,410   100.0 %   $ 59,193,317   100.0 %   4.3 %                               NTIC's joint venture operating income decreased 3.6% to $2,609,000 during the three months ended May 31, 2024, compared to joint venture operating income of $2,708,000 during the three months ended May 31, 2023. The $99,000 decrease in joint venture operating income was primarily due to a decrease in net income at NTIC's joint venture in Germany, partially offset by increases at the majority of the other joint ventures. Net sales of NTIC's joint ventures, which are not consolidated with NTIC's financial results, decreased 2.7% to $25,602,000 during the three months ended May 31, 2024, compared to $26,313,000 for the three months ended May 31, 2023. Year-to-date, NTIC's joint venture operating income was $7,441,000, compared to joint venture operating income of $7,461,000 during the nine months ended May 31, 2023. Net sales of NTIC's joint ventures were $72,643,000 for the nine months ended May 31, 2024, compared to $76,525,000 for the nine months ended May 31, 2023. Operating expenses, as a percent of net sales, for the third quarter of fiscal 2024 were 43.4%, compared to 40.0% for the same period last fiscal year. Year-to-date operating expenses, as a percent of net sales, were 42.0%, compared to 40.8% for the same period last fiscal year. Higher operating expenses for the three and nine months ended May 31, 2024, over the prior fiscal year periods were primarily due to increased personnel expenses, including new hires, benefits and travel. Net income attributable to NTIC for the third quarter of fiscal 2024 was $977,000, or $0.10 per diluted share, compared to net income of $1,060,000, or $0.11 per diluted share, for the same period last fiscal year. Year-to-date, net income attributable to NTIC was $3,573,000, or $0.36 per diluted share, compared to net income of $1,973,000, or $0.20 per diluted share, for the same period last fiscal year. NTIC's consolidated balance sheet remains strong, with working capital of $23,179,000 as of May 31, 2024, including $5,795,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $4,750,000, compared to $22,950,000 of working capital as of August 31, 2023, including $5,406,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $6,357,000. At May 31, 2024, the Company had $24,219,000 of investments in joint ventures, of which $13,400,000 or 55.4%, is cash, with the remaining balance mostly made up of other working capital. Conference Call and Webcast NTIC will host a conference call today at 8:00 a.m. Central Time to review its results of operations for the third quarter of fiscal year 2024 and its outlook, followed by a question-and-answer session. The conference call will be available to interested parties through a webcast. To join the live call and ask a question, a participant must register using the URL below. https://register.vevent.com/register/BI5613987f5d08414b9bdee26f0a3f7b70 Once registered, the participant will receive a dial-in number and unique PIN number to access the call. The audio-only webcast can be accessed at the following link: https://edge.media-server.com/mmc/p/wve7hntp. A link to the webcast is also available on the Investor Relations section of NTIC's webpage. Participants are advised to go to the website at least 15 minutes early to register, download and install any necessary audio software. For those unable to participate in the live webcast, a replay of the webcast will be archived and accessible for approximately one year on the Investor Relations section of NTIC's webpage. About Northern Technologies International Corporation Northern Technologies International Corporation develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors and agents. NTIC's primary business is corrosion prevention marketed mainly under the ZERUST® brand. NTIC has been selling its proprietary ZERUST® rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for almost 50 years and more recently has also targeted and expanded into the oil and gas industry. NTIC offers worldwide on-site technical consulting for rust and corrosion prevention issues. NTIC's technical service consultants work directly with the end users of NTIC's products to analyze their specific needs and develop systems to meet their technical requirements. NTIC also markets and sells a portfolio of bio-based and biodegradable polymer resin compounds and finished products marketed under the Natur-Tec® brand. Forward-Looking Statements Statements contained in this release that are not historical information are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include NTIC's beliefs that demand for oil and gas solutions will expand, oil and gas sales will significantly rebound in fourth quarter of 2024, and our strategic investments will support additional growth opportunities, and other statements that can be identified by words such as "believes," "continues," "expects," "anticipates," "intends," "potential," "outlook," "will," "may," "would," "should," "guidance" or words of similar meaning, and the use of future dates. Such forward-looking statements are based upon the current beliefs and expectations of NTIC's management and are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties include, but are not limited to, in no particular order: the health of the U.S. and worldwide economies, including in particular the U.S. automotive industry and its evolution towards electric vehicles; the effect of economic uncertainty, recessionary indicators, inflation, increased interest rates and turmoil in the global credit, financial and banking markets or perception thereof; effect of supply chain disruptions; effect of COVID-19; dependence on joint ventures, relationships with joint venture partners and their success, including fees and dividend distributions; risks associated with international operations, including NTIC China, exposure to exchange rate fluctuations, tariffs and trade disputes; effect of economic slowdown and political unrest, including the Russia and Ukraine war and the Israel and Hamas conflict; the level of growth in NTIC's markets; NTIC's investments in research and development efforts; acceptance of existing and new products; timing of purchase orders under supply contracts; variability in sales to oil and gas customers and effect on quarterly financial results; increased competition; costs and effects of complying with changes in tax, fiscal, government and other regulatory policies, and rules relating to environmental, health and safety matters; and NTIC's reliance on its intellectual property rights and the absence of infringement of the intellectual property rights of others. More detailed information on these and additional factors which could affect NTIC's operating and financial results is described in NTIC's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the fiscal year ended August 31, 2023 and subsequent quarterly reports on Form 10-Q. NTIC urges all interested parties to read these reports to gain a better understanding of the many business and other risks that it faces. Additionally, NTIC undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.   NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MAY 31, 2024 (UNAUDITED) AND AUGUST 31, 2023 (AUDITED)   May 31, 2024   August 31, 2023 ASSETS       CURRENT ASSETS:       Cash and cash equivalents $ 5,794,824     $ 5,406,173   Receivables:       Trade, excluding joint ventures, less allowance for doubtful accounts of $533,000 as of May 31, 2024 and August 31, 2023   14,374,856       15,645,130   Trade, joint ventures   594,331       187,912   Fees for services provided to joint ventures   1,262,153       1,296,594   Dividend receivable from joint ventures   —       1,986,027   Income taxes   463,828       34,202   Inventories   13,242,381       13,096,489   Prepaid expenses   2,170,896       2,019,029   Total current assets $ 37,903,269     $ 39,671,556           PROPERTY AND EQUIPMENT, NET $