Northern Technologies International (NTIC) Q3 2026 earnings summary

Executive summary

• Consolidated net sales reached a record $24.2 million for the quarter, up 12.6% year-over-year, driven by strong demand for ZERUST® oil and gas and Natur-Tec® bioplastic solutions.

• ZERUST® oil and gas sales rose 72.3% year-over-year to $2.2 million, marking the fourth consecutive quarter above $2 million and surpassing $10 million on a trailing 12-month basis.

• Natur-Tec® bioplastics achieved a quarterly record of $6.1 million in sales, up 5% year-over-year, with volume growth estimated at 10-12%.

• Net loss for the quarter was $263,000 ($0.03 per share), compared to net income of $122,000 ($0.01 per share) in the prior year, due to higher operating expenses and raw material costs.

• The company suspended its quarterly cash dividend in April 2026 to focus on debt reduction.

Financial highlights

• Gross margin declined by 477 basis points year-over-year to 33.6%, primarily due to higher raw material costs and competitive pricing pressures.

• Operating expenses rose 5.3% to $10.2 million, but as a percentage of sales, fell to 42% from 44.9% year-over-year.

• Working capital stood at $20 million as of May 31, 2026, with $7.3 million in cash and cash equivalents.

• Outstanding debt was $14.8 million, including $11.8 million on revolving credit and $3.01 million in term loans.

• Non-GAAP adjusted net loss for the quarter was $158,000 ($0.02 per share), versus adjusted net income of $228,000 ($0.02 per share) last year.

Outlook and guidance

• Management expects gross margin and profitability to improve in Q4 as raw material costs normalize and pricing/procurement initiatives take effect.

• Fourth quarter revenues are expected to exceed third quarter levels, with expenses held flat and stronger profitability anticipated.

• Continued sales growth and improved cash flow are projected for fiscal 2027, with no significant new investments planned in North America.

• Management anticipates continued volatility in quarterly earnings due to joint venture performance, oil & gas sales, and bioplastics demand.

• Dividend suspension will continue until further notice as the company focuses on debt reduction.