Northern Technologies International Corporation Reports Financial Results for First Quarter Fiscal 2026

Rhea-AI Summary

Northern Technologies International (NASDAQ: NTIC) reported first quarter fiscal 2026 results: consolidated net sales rose 9.2% YoY to a quarterly record of $23.309M. Key segment highlights included ZERUST industrial $14.923M (+6.9%), ZERUST oil & gas $2.394M (+58.1%), Natur-Tec $5.993M (+2.2%), and NTIC China $4.935M (+23.5%). Gross margin fell 230 bps to 36.0%; operating income decreased 15.6% to $0.934M. Net income attributable to NTIC was $0.238M ($0.03 diluted) vs $0.561M a year ago; non-GAAP adjusted net income was $0.344M ($0.04 diluted).

Working capital was $19.441M with $6.390M cash and $12.022M debt; joint venture income declined 5.1% to $2.291M. Management expects sequential margin improvement and continued sales growth in fiscal 2026.

Positive

• Consolidated net sales +9.2% YoY to $23.309M (quarterly record)
• ZERUST oil & gas sales +58.1% YoY to $2.394M (first quarter record)
• Operating expenses improved to 41.8% of sales from 44.4% (third consecutive quarterly improvement)

Negative

• Gross margin down 230 basis points to 36.0%
• Operating income down 15.6% to $0.934M
• Net income attributable to NTIC declined to $0.238M ($0.03 diluted) from $0.561M

Key Figures

Consolidated net sales $23,309,000 (up 9.2%) Q1 fiscal 2026 vs. Q1 fiscal 2025

ZERUST oil & gas sales $2,394,000 (up 58.1%) Q1 fiscal 2026 vs. Q1 fiscal 2025

Natur-Tec sales $5,993,000 (up 2.2%) Q1 fiscal 2026 vs. Q1 fiscal 2025

Gross margin 36.0% (down 230 bps) Q1 fiscal 2026 vs. prior-year quarter

Operating income $934,000 (down 15.6%) Q1 fiscal 2026 vs. Q1 fiscal 2025

Net income attributable to NTIC $238,000 vs. $561,000 Q1 fiscal 2026 vs. Q1 fiscal 2025

Non-GAAP adjusted net income $344,000 vs. $667,000 Q1 fiscal 2026 vs. Q1 fiscal 2025

Working capital $19,441,000 vs. $20,439,000 As of Nov 30, 2025 vs. Aug 31, 2025

Market Reality Check

$8.74 Last Close

Volume Volume 22,044 is below the 20-day average of 37,360, indicating muted pre-news trading. low

Technical Shares at $8.74 are trading above the 200-day MA at $7.81 and 37.3% below the 52-week high.

Peers on Argus

Ahead of this earnings release, NTIC was down 1.91% while several peers also traded lower: TSE (-3.75%), ALTO (-0.83%), LOOP (-2.65%), and FSI (-5.47%). FEAM diverged with a +5.29% move, suggesting a mix of stock-specific and broader sector dynamics.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 30	Earnings call notice	Neutral	+0.7%	Announcement of Q1 FY26 release date and accompanying conference call details.
Nov 11	Earnings call notice	Neutral	+0.1%	Scheduled FY25 Q4 results release and investor conference call logistics.
Nov 04	Contract win	Positive	+9.9%	Three-year offshore corrosion-protection contract for FPSO units in Brazil.
Oct 15	Dividend announcement	Positive	+0.5%	Declaration of a $0.01 per share quarterly cash dividend with set record date.
Jul 16	Dividend announcement	Positive	-1.9%	Another $0.01 per share quarterly dividend for shareholders of record in July.

Pattern Detected

Recent stock moves around operational news (contracts, earnings) have generally aligned with the tone of the announcement, while one dividend declaration showed a negative price divergence.

Recent Company History

Over the last six months, NTIC’s news flow has centered on capital returns, operational execution, and communications around results. Two dividend declarations in July 2025 and October 2025 set a recurring $0.01 payout, with mixed short-term price reactions. A notable contract win in Brazil on Nov 4, 2025 drove a strong positive move, highlighting investor focus on oil and gas growth. More recently, earnings-date conference call notices in November and December 2025 prompted small, mostly positive reactions, providing context for today’s detailed Q1 fiscal 2026 results.

Market Pulse Summary

This announcement highlights record Q1 fiscal 2026 net sales of $23.3M, with particularly strong 58.1% growth in ZERUST® oil and gas and steady Natur-Tec® expansion. At the same time, gross margin slipped to 36.0% and net income fell to $238,000, underscoring ongoing profitability pressure. Investors may watch how management’s focus on controlling operating expenses, normalizing the effective tax rate, and leveraging recent capacity investments translates into improved earnings over subsequent quarters.

Key Terms

basis points financial

"Gross profit, as a percentage of net sales, decreased 230 basis points to 36.0%"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

non-GAAP financial

"NTIC’s non-GAAP adjusted net income, as set forth in the GAAP reconciliation..."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

AI-generated analysis. Not financial advice.

MINNEAPOLIS, Jan. 08, 2026 (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 first quarter of fiscal 2026.

First quarter fiscal 2026 financial and operating highlights include (with growth rates on a fiscal quarter year-over-year basis):

• Consolidated net sales increased 9.2% to a quarterly record of $23,309,000
• ZERUST® industrial net sales increased 6.9% to a quarterly record of $14,923,000
• ZERUST® oil and gas net sales increased 58.1% to a first quarter record of $2,394,000
• Natur-Tec® product net sales increased 2.2% to a quarterly record of $5,993,000
• NTIC China net sales increased 23.5% to a quarterly record of $4,935,000
• Gross profit, as a percentage of net sales, decreased 230 basis points to 36.0%
• Joint venture operating income decreased 5.1% to $2,291,000
• Operating income decreased 15.6% to $934,000
• Net income attributable to NTIC was $238,000, compared to $561,000
• Net income per diluted share attributable to NTIC was $0.03, compared to $0.06
  
  

“We delivered record consolidated net sales during first quarter, driven by the strongest year-over-year growth rate we’ve had since fiscal 2024. This performance was supported by higher sales across key sectors, including ZERUST® oil and gas, NTIC China, and North American Natur-Tec® sales. ZERUST® oil and gas achieved record first quarter sales, marking the second consecutive quarter with more than $2 million in revenue, reflecting improving demand from both new and existing customers. With favorable demand trends across many of our core markets and geographies, we believe we are well positioned for continued sales growth in fiscal 2026,” said G. Patrick Lynch, President and CEO of NTIC.

“Improving profitability is a key priority for fiscal 2026. Operating expenses as a percentage of sales were 41.8% for the first quarter, reflecting the third consecutive quarterly improvement in holding down operating expenses. We expect quarterly sales to grow faster than operating expenses as we continue to leverage recent investments in new employees and facilities across our global operations. Although consolidated gross margin declined modestly during the quarter, due to a supplier lead-time issue, we believe this will only have a near-term impact. We expect gross margin to improve sequentially during fiscal 2026. Overall, the start to fiscal 2026 is encouraging, and we anticipate higher year-over-year profitability as we benefit from higher sales, expanding gross margin, and controlled operating expenses,” concluded Mr. Lynch.

NTIC’s consolidated net sales increased 9.2% to $23,309,000 during the three months ended November 30, 2025, compared to $21,338,000 for the three months ended November 30, 2024. The year-over-year increase in first quarter sales was primarily driven by increased sales and demand for ZERUST® and Natur-Tec® products.

The following tables set forth NTIC’s net sales by product category for the three months ended November 30, 2025 and 2024, by segment:

	Three Months Ended
	November 30, 2025			% of Net Sales			November 30, 2024			% of Net Sales			% Change
ZERUST®industrial net sales	$	14,922,518		64.0	%		$	13,962,252		65.4	%		6.9	%
ZERUST®oil & gas net sales		2,393,678		10.3	%			1,513,551		7.1	%		58.1	%
Total ZERUST®net sales	$	17,316,196		74.3	%		$	15,475,803		72.5	%		11.9	%
Total Natur-Tec®net sales		5,992,685		25.7	%			5,862,590		27.5	%		2.2	%
Total net sales	$	23,308,881		100.0	%		$	21,338,393		100.0	%		9.2	%

Net sales at NTIC’s joint ventures, which are not consolidated with NTIC’s financial results, increased 2.9% to $24,531,000 during the three months ended November 30, 2025, compared to $23,837,000 for the three months ended November 30, 2024. NTIC’s total income from joint venture operations decreased 5.1% to $2,291,000 during the three months ended November 30, 2025, compared to $2,414,000 during the three months ended November 30, 2024. The $123,000 decrease in total income from joint venture operations was primarily due to a slight increase in operating expenses at the joint ventures.

Operating expenses, as a percentage of net sales, for the first quarter of fiscal 2026 were 41.8%, compared to 44.4% for the same period last fiscal year. Operating expenses for the three months ended November 30, 2025 increased 2.9% year-over-year primarily due to higher selling, and general and administrative expenses, partially offset by a reduction in research and development expenses.

NTIC’s effective income tax rate increased to 34.4% for the first quarter of fiscal 2026, compared to 21.5% in the same period last fiscal year. The increase primarily reflects income taxes paid at NTIC’s foreign subsidiaries at normal statutory rates, as well as withholding taxes on royalty and dividend payments. This increase in tax expense was partially offset by tax benefits in North America due to losses for which no corresponding tax benefits or deferred tax assets were recognized. As a result, NTIC’s effective tax rate was unusually high for the quarter. Management expects the effective tax rate to normalize in future periods when additional profits are recognized in North American operations.

Net income attributable to NTIC for the first quarter of fiscal 2026 was $238,000, or $0.03 per diluted share, compared to net income of $561,000, or $0.06 per diluted share, for the same period last fiscal year.

NTIC’s non-GAAP adjusted net income, as set forth in the GAAP reconciliation at the end of this release, was $344,000, or $0.04 per diluted share, for the first quarter of fiscal 2026, compared to $667,000, or $0.07 per diluted share, for the same quarter last fiscal year.

NTIC had working capital of $19,441,000 as of November 30, 2025, including $6,390,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $12,022,000, compared to $20,439,000 of working capital as of August 31, 2025, including $7,251,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $12,189,000.

At November 30, 2025, NTIC had $29,277,000 of investments in joint ventures, of which $15,616,000, or 53.4%, was 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 first quarter of fiscal year 2026 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-conf.media-server.com/register/BIcaa535e9668d4574a83456b8fd63520d

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/66xrye7t

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, general industrial, mechanical, mining, agricultural, and retail consumer markets for over 50 years and, more recently, has also 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 it is well positioned for continued sales growth in fiscal 2026, NTIC’s quarterly sales will grow faster than its operating expenses, the supplier lead-time issue that led to a gross margin decline in the first quarter of fiscal 2026 will have a near-term impact, NTIC’s gross margin will improve sequentially during fiscal 2026, NTIC’s will experience higher year-over-year profitability as it benefits from higher sales, expanding gross margin, and controlled operating expenses, its effective tax rate will normalize in future periods, 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: risks associated with international operations, including NTIC China, exposure to exchange rate fluctuations, tariffs, trade disputes and changes to trade regulation; the health of the U.S. and worldwide economies, including in particular the U.S. automotive industry, decreased exports of automotive products resulting from tariffs between the U.S. and both Mexico and Canada and the 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; dependence on joint ventures, relationships with joint venture partners and their success, including fees and dividend distributions; effect of economic slowdown and political unrest, including the war between Russia and Ukraine and the conflicts in the Middle East; 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 (SEC), including its annual report on Form 10-K for the fiscal year ended August 31, 2025 and subsequent quarterly report on Form 10-Q to be filed with the SEC. 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.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this release contains non-GAAP financial measures, including adjusted net income attributable to NTIC and adjusted net income attributable to NTIC per diluted share. NTIC’s reasons for use of these measures, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures and other information are included at the end of this release. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for NTIC’s financial results prepared in accordance with GAAP.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2025 (UNAUDITED) AND AUGUST 31, 2025 (AUDITED)
	November 30, 2025				August 31, 2025
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,389,809			$	7,250,523
Receivables:
Trade, less allowance for credit losses  of $235,000 as of November 30, 2025 and August 31, 2025,  respectively		18,202,077				18,443,230
Fees for services provided to joint ventures		1,033,486				1,077,552
Income taxes		590,483				340,002
Inventories, net		16,107,563				15,525,230
Prepaid expenses		2,301,076				1,706,279
Total current assets		44,624,494				44,342,816
PROPERTY AND EQUIPMENT, NET		15,800,929				15,183,918
OTHER ASSETS:
Investments in joint ventures		29,277,113				28,611,777
Deferred income tax, net		453,113				503,575
Intangible assets, net		8,594,926				8,827,768
Goodwill		4,782,376				4,782,376
Operating lease right of use assets		496,441				493,050
Total other assets		43,603,969				43,218,546
Total assets	$	104,029,392			$	102,745,280
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Line of credit	$	9,134,428			$	9,329,021
Term loan, current portion		2,887,310				2,860,256
Accounts payable		9,665,387				8,044,196
Income taxes payable		368,589				414,304
Accrued liabilities:
Payroll and related benefits		2,119,349				1,844,817
Other		721,893				1,066,761
Current portion of operating leases		286,352				344,739
Total current liabilities		25,183,308				23,904,094
LONG-TERM LIABILITIES:
Deferred income tax, net		1,513,166				1,513,166
Term loans, noncurrent portion		445,766				466,984
Operating leases, less current portion		210,089				148,311
Total long-term liabilities	$	2,169,021			$	2,128,461
COMMITMENTS AND CONTINGENCIES
EQUITY:
Preferred stock, no par value; authorized 10,000 shares; none issued and outstanding		—				—
Common stock, $0.02 par value per share; authorized 15,000,000 shares;  issued and outstanding 9,480,688 and 9,475,490,  as of November 30, 2025 and August 31, 2025, respectively		189,614				189,510
Additional paid-in capital		25,402,605				25,056,976
Retained earnings		52,416,480				52,273,469
Accumulated other comprehensive loss		(5,643,901	)			(5,371,201	)
Stockholders’ equity		72,364,798				72,148,754
Non-controlling interests		4,312,265				4,563,971
Total equity		76,677,063				76,712,725
Total liabilities and equity	$	104,029,392			$	102,745,280

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024
	Three Months Ended November 30,
		2025				2024
NET SALES:
Net sales	$	23,308,881			$	21,338,393
Cost of goods sold		14,925,255				13,175,440
Gross profit		8,383,626				8,162,953
JOINT VENTURE OPERATIONS:
Equity in income from joint ventures		1,222,116				1,129,593
Fees for services provided to joint ventures		1,069,257				1,284,119
Total income from joint venture operations		2,291,373				2,413,712
OPERATING EXPENSES:
Selling expenses		4,371,502				4,267,654
General and administrative expenses		4,148,953				3,858,943
Research and development expenses		1,220,912				1,343,397
Total operating expenses		9,741,367				9,469,994
OPERATING INCOME		933,632				1,106,671
INTEREST INCOME		37,242				25,567
INTEREST EXPENSE		(199,966	)			(120,220	)
INCOME BEFORE INCOME TAX EXPENSE		770,908				1,012,018
INCOME TAX EXPENSE		265,029				217,871
NET INCOME		505,879				794,147
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		268,060				233,056
NET INCOME ATTRIBUTABLE TO NTIC	$	237,819			$	561,091
NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE:
Basic	$	0.03			$	0.06
Diluted	$	0.03			$	0.06
WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING:
Basic		9,480,688				9,470,507
Diluted		9,492,694				9,754,209
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.01			$	0.07

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

The accompanying press release contains certain non-GAAP financial measures, including adjusted net income attributable to NTIC and adjusted net income attributable to NTIC per diluted share, which are not calculated or presented in accordance with accounting principles generally accepted in the United States (GAAP). These non-GAAP financial measures are supplemental information and in addition to the financial measures presented in the accompanying release that are calculated and presented in accordance with GAAP. NTIC uses non-GAAP financial measures as supplemental measures of performance and believes these measures facilitate operating performance comparisons from period to period and company to company by factoring out potential differences caused by non-recurring, unusual or infrequent charges not related to NTIC’s regular, ongoing business. NTIC also believes that the presentation of certain non-GAAP financial measures provides useful information to investors in evaluating the company’s operations, period over period. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the release. The non-GAAP financial measures in the accompanying release may differ from similar measures used by other companies.

The following is a reconciliation of NTIC’s reported net income attributable to NTIC and reported net income attributable to NTIC per diluted common share to adjusted net income attributable to NTIC and adjusted net income attributable to NTIC per diluted common share, in each case, as adjusted to exclude amortization expense.

	Three Months Ended
	November 30,			November 30,
		2025			2024
Net income attributable to NTIC, as reported	$	237,819		$	561,091
Adjustments for adjusted net income:
Amortization expense		105,783			105,783
Non-GAAP adjusted net income	$	343,602		$	666,874
Weighted average shares outstanding (diluted)		9,492,694			9,754,209
Diluted net income per share, as reported		0.03			0.06
Adjustments for adjusted net income, net of tax impact, per diluted share		0.01			0.01
Non-GAAP diluted adjusted net income per share	$	0.04		$	0.07

Investor and Media Contact:
Matthew Wolsfeld, CFO
NTIC
(763) 225-6600

FAQ

How much did NTIC (NASDAQ: NTIC) report in consolidated net sales for Q1 fiscal 2026?

NTIC reported consolidated net sales of $23.309 million for Q1 fiscal 2026, up 9.2% year-over-year.

What drove NTIC's sales growth in Q1 fiscal 2026 for NTIC (NTIC)?

Sales growth was driven by higher demand for ZERUST and Natur-Tec products, including strong ZERUST oil & gas and growth in NTIC China.

Why did NTIC's gross margin decline in Q1 fiscal 2026 and will it recover?

Gross margin declined 230 basis points mainly due to a supplier lead-time issue; management expects sequential gross margin improvement in fiscal 2026.

What were NTIC's earnings per share for Q1 fiscal 2026 (NTIC)?

Net income per diluted share attributable to NTIC was $0.03; non-GAAP adjusted diluted EPS was $0.04 for Q1 fiscal 2026.

How did NTIC's joint venture results affect Q1 fiscal 2026 results for NTIC (NTIC)?

Net sales at joint ventures rose 2.9% to $24.531M, but NTIC's income from joint venture operations fell 5.1% to $2.291M.

What is NTIC's cash and working capital position as of November 30, 2025?

As of November 30, 2025, NTIC had $6.390M in cash and cash equivalents and $19.441M in working capital, with $12.022M outstanding on its credit facilities.