MINNEAPOLIS, April 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 second quarter of fiscal 2024. Second quarter fiscal 2024 financial and operating highlights include (with growth rates on a fiscal quarter year-over-year basis): Consolidated net sales increased 14.1% to a second quarter record of $20,843,000 ZERUST® industrial net sales increased 3.1% to a second quarter record of $13,051,000 ZERUST® oil and gas net sales increased 20.1% to a second quarter record $2,167,000 Natur-Tec® product net sales increased 47.5% to a quarterly record of $5,624,000 NTIC China net sales increased 20.3% to $3,456,000 Gross profit as a percent of second quarter net sales increased 551 basis points to 40.0% Joint venture operating income increased 4.2% to $2,481,000 Net income attributable to NTIC increased 313% to $1,701,000, compared to $411,000 Net income per diluted share attributable to NTIC increased 325% to $0.17, compared to $0.04 Cash provided by operating activities was $5,643,000 for the six months ended February 29, 2024 As of February 29, 2024, NTIC has net cash of $860,000, compared to net debt of $951,000 at August 31, 2023 "NTIC set a series of new records in the second quarter, driven by robust demand across many parts of our business. Most notable among these were record second quarter ZERUST® oil and gas sales and record quarterly Natur-Tec® sales. The positive momentum underway within these two sectors reflects our long-standing commitment to developing innovative solutions for large, rapidly growing markets that are supported by NTIC's global infrastructure.   I'm also pleased by the continued improvement in our gross margin which, for the second quarter, jumped to 40%, a 5.5 percentage point increase year-over-year and a 10.3 percentage point increase over the second quarter of fiscal 2022, thanks to the successful execution of several strategies we have been pursuing for this purpose," said G. Patrick Lynch, President and CEO of NTIC. "We believe demand across our ZERUST® industrial, ZERUST® oil and gas, and Natur-Tec® product categories will remain strong through the second half of fiscal 2024, as a result of new business opportunities with new and existing customers, as well as the expansion of several existing projects. We also anticipate that profitability will continue to improve, based on the actions taken to decrease costs and control our operating expenses, while investing in long term growth objectives. In addition, we believe we'll continue to generate positive operating cash flow in the second half of our fiscal year that we'll use to pay down the balance of our line of credit and further strengthen our balance sheet. Overall, we believe fiscal 2024 is shaping up to be a strong year of sales growth and improved profitability," concluded Mr. Lynch. NTIC's consolidated net sales increased 14.1% to $20,843,000 during the three months ended February 29, 2024, compared to $18,271,000 for the three months ended February 28, 2023. The year-over-year increase in consolidated net sales for the second quarter was primarily a result of an increase in sales and demand for Natur-Tec® and ZERUST® oil and gas products and stable sales of and demand for ZERUST® industrial products. For the first half of fiscal 2024, consolidated net sales increased 7.3% to $41,024,000, compared to $38,224,000 for the same period last fiscal year. The following tables set forth NTIC's net sales by product category for the three and six months ended February 29, 2024 and February 28, 2023, by segment:   Three Months Ended   February 29,2024   % of Net Sales       February 28,2023   % of Net Sales     % Change   ZERUST® industrial net sales $ 13,050,767   62.6 %   $ 12,653,512   69.2 %   3.1 % ZERUST® oil and gas net sales   2,167,328   10.4 %     1,805,235   9.9 %   20.1 % Total ZERUST® net sales $ 15,218,095   73.0 %   $ 14,458,747   79.1 %   5.3 % Total Natur-Tec® net sales   5,624,443   27.0 %     3,812,078   20.9 %   47.5 % Total net sales $ 20,842,538   100.0 %   $ 18,270,825   100.0 %   14.1 %   Six Months Ended   February 29,2024   % of Net Sales       February 28,2023   % of Net Sales     % Change   ZERUST® industrial net sales $ 26,954,198   65.7 %   $ 26,401,616   69.0 %   2.1 % ZERUST® oil and gas net sales   3,669,642   8.9 %     3,427,132   9.0 %   7.1 % Total ZERUST® net sales $ 30,623,840   74.6 %   $ 29,828,748   78.0 %   2.7 % Total Natur-Tec® net sales   10,400,373   25.4 %     8,394,843   22.0 %   23.9 % Total net sales $ 41,024,213   100.0 %   $ 38,223,591   100.0 %   7.3 % NTIC's joint venture operating income increased 4.2% to $2,481,000 during the three months ended February 29, 2024, compared to joint venture operating income of $2,381,000 during the three months ended February 28, 2023. The $100,000 increase in joint venture operating income was primarily due to efforts to enhance profitability at the Company's joint ventures, partially offset by lower joint venture sales. Net sales of NTIC's joint ventures, which are not consolidated with NTIC's financial results, decreased 7.9% to $23,480,000 during the three months ended February 29, 2024, compared to $25,483,000 for the three months ended February 28, 2023. Year-to-date, NTIC's joint venture operating income was $4,832,000, compared to joint venture operating income of $4,753,000 during the six months ended February 28, 2023. Net sales of NTIC's joint ventures were $47,041,000 for the six months ended February 29, 2024, compared to $50,213,000 for the six months ended February 28, 2023. Operating expenses, as a percent of net sales, for the second quarter of fiscal 2024 were 41.3%, compared to 43.1% for the same period last fiscal year. Year-to-date, operating expenses, as a percent of net sales, were 41.3%, compared to 41.2% for the same period last fiscal year. Higher operating expenses for three and six months ended February 29, 2024 over the prior fiscal year periods were primarily due to increased personnel expenses. Net income attributable to NTIC for the second quarter of fiscal 2024 was $1,701,000, or $0.17 per diluted share, compared to net income of $411,000, or $0.04 per diluted share, for the same period last fiscal year. Year-to-date, net income attributable to NTIC was $2,597,000, or $0.27 per diluted share, compared to net income of $914,000, or $0.09 per diluted share, for the same period last fiscal year. NTIC's consolidated balance sheet remains strong, with working capital of $23,975,000 as of February 29, 2024, including $4,835,000 in cash and cash equivalents and an outstanding revolving line of credit and term loan balance of $3,975,000, 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 February 29, 2024, the Company had $23,461,000 of investments in joint ventures, of which $13,078,000 or 55.8%, 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 second 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/BIa41c429956224b39961c5fea70026b8b 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/9ghco4ic/.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 across its Zerust® industrial, Zerust® oil and gas, and Natur-Tec® product categories will remain strong, that profitability will continue to improve, and that NTIC will continue to generate positive operating cash flow, which will be used in part to pay down the balance of its line of credit, 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 FEBRUARY 29, 2024 (UNAUDITED) AND AUGUST 31, 2023 (AUDITED)       February 29, 2024   August 31, 2023 ASSETS       CURRENT ASSETS:         Cash and cash equivalents $ 4,835,031     $ 5,406,173     Receivables:         Trade, excluding joint ventures, less allowance for doubtful accounts         of $533,000 as of February 29, 2024 and August 31, 2023   14,800,592       15,645,130     Trade, joint ventures   891,929       187,912     Fees for services provided to joint ventures   1,227,711       1,296,594     Dividend receivable from joint venture   509,716       1,986,027     Income taxes   —       34,202     Inventories   12,538,859       13,096,489     Prepaid expenses   2,529,476       2,019,029     Total current assets $ 37,333,314     $