Northern Technologies International (NTIC) Q2 2026 earnings summary

Executive summary

• Consolidated net sales grew 15.3% year-over-year to $21.997 million in Q2 FY26, driven by record ZERUST® oil & gas sales, strong performance in China, and Natur-Tec® growth.

• ZERUST® oil & gas net sales surged 72.1% to $2.666 million, with a major $13 million contract in Brazil expected to boost future results.

• Natur-Tec® sales increased 8.1% to $5.363 million, supported by new distribution agreements in North America and global demand.

• Business model resilience is underpinned by diversified end markets, global footprint, and investments in sales infrastructure and manufacturing.

• Net loss attributable to the company was $35,000 for the quarter, compared to net income of $434,000 last year; adjusted net income was $70,000.

Financial highlights

• Gross margin was 35.7% for the quarter, up 10 basis points year-over-year; operating expenses rose 7.7% to $9.5 million but declined as a percentage of sales.

• Joint venture net sales rose 18.6% to $23.5 million, with JV operating income up 19.8%.

• Working capital was $20.2 million, with cash and equivalents at $6.47 million and debt at $14.3 million as of February 28, 2026.

• Non-GAAP adjusted net income was $70,000 ($0.01/share) vs. adjusted net loss of $300,000 ($0.03/share) last year.

• Year-to-date consolidated net sales grew 12.1% to $45.306 million.

Outlook and guidance

• Management expects continued sales growth and improved profitability in H2 FY26, supported by stable North America and ongoing strength in China, oil & gas, and Natur-Tec®.

• Anticipate sequential gross margin improvement and stronger financial performance driven by operating leverage and disciplined expense management.

• Third and fourth quarters are expected to outperform the first half, with historical strength in H2.

• Continued volatility in quarterly net income is expected due to joint venture performance, project timing, and Natur-Tec® sales.

• Inflation, supply chain disruptions, and tariffs will impact costs, but mitigation strategies are in place.