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1. Company Snapshot

1.a. Company Description

Northern Technologies International Corporation develops and markets rust and corrosion inhibiting products and services in North America, South America, Europe, Asia, the Middle East and internationally.It offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand.The company also provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand.


In addition, it offers on-site and technical consulting for rust and corrosion prevention issues.The company sells its products and services to automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets through direct sales force, network of independent distributors and agents, manufacturer's sales representatives, strategic partners, and joint venture.Northern Technologies International Corporation was founded in 1970 and is headquartered in Circle Pines, Minnesota.

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1.b. Last Insights on NTIC

Northern Technologies International Corporation's recent performance was negatively impacted by a quarterly loss of $0.06 per share, missing revenue estimates. The company's Q4 2025 earnings call highlighted challenges, with a loss compared to earnings of $0.20 per share a year ago. Despite securing a multi-year contract in Brazil for corrosion protection solutions, the company's financial performance was overshadowed by the earnings miss. Additionally, the company's dividend payout of $0.01 per share, although a positive event, did not offset the negative earnings impact.

1.c. Company Highlights

2. NTIC's Fiscal 2025 Earnings: A Year of Strategic Investments and Mixed Results

NTIC reported a 4.4% decrease in total consolidated net sales to $22.3 million for the fourth quarter ended August 31, 2025. The decline was largely attributed to a 29.4% decrease in ZERUST oil and gas sales and a 10% decrease in Natur-Tec sales. However, ZERUST industrial net sales increased 5.8%. The company's gross profit as a percentage of net sales was 37.9%, down from 43.8% in the prior year period. NTIC reported a net loss of $1.1 million or $0.11 per diluted share for the fiscal 2025 fourth quarter, compared to net income of $1.8 million or $0.19 per diluted share in the prior year period. For the full year, NTIC reported net income of $18,000 or $0.00 per diluted share, missing analyst estimates of $0.02 per share.

Publication Date: Nov -24

📋 Highlights
  • Q4 Net Sales Decline: Total consolidated net sales fell 4.4% YoY to $22.3 million, driven by 29.4% drop in ZERUST oil and gas sales ($3 million) and 10% decline in Natur-Tec ($5.1 million).
  • Net Loss Widens: Fiscal 2025 Q4 net loss reached $1.1 million ($0.11 EPS) versus $1.8 million net income ($0.19 EPS) in prior year, reflecting 6.6% YoY sales decline and 37.9% gross margin contraction.
  • China Subsidiary Outperforms: NTIC China’s Q4 sales rose 12% to $4 million, with full-year growth of 14% to $16.2 million, offsetting U.S. market declines.
  • Strategic Investments Pay Off in 2026: Management anticipates 15%+ top-line growth from compostable packaging trials and margin expansion post-2025 strategic investments, despite FY2025 cash outflows for CAPEX.
  • Debt and Liquidity Position: As of Aug 31, 2025, $12.2 million in debt and $3.7 million cash reserves highlight leverage challenges, though operating cash flow is expected to improve in fiscal 2026.

Segment Performance

NTIC's joint venture sales increased 4.7% year-over-year to $24.4 million, while its wholly-owned subsidiary, NTIC China, reported a 12% increase in fourth quarter net sales to $4 million and a 14% increase in full year sales to $16.2 million. The Natur-Tec segment experienced a decline in sales, primarily in North America, but is expected to contribute to revenue growth in the future, particularly in India, where it is working with dairy companies to replace traditional packaging with compostable solutions.

Strategic Initiatives and Outlook

NTIC's management expects to start reaping benefits from strategic investments made over the past three years in fiscal 2026, with a focus on flattening operating expenses, expanding gross margins, and driving sales in higher-margin areas. The company is optimistic about its momentum across many parts of its business and confident that its strategies will drive growth, profitability, and value creation for shareholders. NTIC expects to return to a growth rate of over 15% top-line growth, driven by opportunities in oil and gas and Natur-Tec.

Valuation and Financial Health

NTIC's current valuation metrics indicate a mixed picture. The company's P/E Ratio is negative at -0.06, while its EV/EBITDA ratio is 5.74. The Net Debt / EBITDA ratio is 5.66, indicating a relatively high debt burden. The company's ROE is negative at -5.71%, and its ROIC is 0.92%. Analysts estimate next year's revenue growth at 7.0%, which may not be sufficient to drive significant improvement in the company's valuation metrics.

Key Drivers and Risks

The key drivers for NTIC's future performance include the successful implementation of its strategic initiatives, growth in its Natur-Tec segment, and opportunities in oil and gas. However, the company faces risks, including intense competition, regulatory changes, and economic downturns. The company's ability to manage its debt burden and improve its profitability will be crucial in driving value creation for shareholders.

3. NewsRoom

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Northern Technologies International Corporation (NTIC) Q4 2025 Earnings Call Transcript

Nov -18

Source: seekingalpha.com

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Northern Technologies (NTIC) Reports Q4 Loss, Misses Revenue Estimates

Nov -18

Source: zacks.com

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Northern Technologies International Corporation Secures Multi-Year Offshore Oil & Gas Production Asset Preservation Contract in Brazil

Nov -04

Source: globenewswire.com

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Stepan (NYSE:SCL) and Northern Technologies International (NASDAQ:NTIC) Head-To-Head Contrast

Oct -26

Source: defenseworld.net

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Northern Technologies International Corporation Announces Quarterly Cash Dividend

Oct -15

Source: globenewswire.com

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Northern Technologies (NTIC) Q3 Earnings Lag Estimates

Jul -10

Source: zacks.com

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Northern Technologies International Corporation (NTIC) Q3 2025 Earnings Call Transcript

Jul -10

Source: seekingalpha.com

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Northern Technologies International Corporation Reports Financial Results for Third Quarter Fiscal 2025

Jul -10

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.90%)

6. Segments

ZERUST

Expected Growth: 9.0%

ZERUST's 9.0% growth driven by increasing demand for corrosion prevention solutions in the oil and gas industry, expansion into new markets, and growing adoption of sustainable packaging solutions. Additionally, NTIC's strategic partnerships and investments in research and development have enhanced product offerings, contributing to revenue growth.

Natur-Tec

Expected Growth: 13.0%

Natur-Tec's 13.0% growth driven by increasing demand for sustainable packaging, expansion into new markets, and strategic partnerships. Strong brand recognition, innovative product offerings, and certifications such as compostable and biodegradable also contribute to growth. Additionally, rising consumer awareness of environmental issues and government regulations favoring eco-friendly products support Natur-Tec's upward trend.

7. Detailed Products

Zerust

A line of corrosion inhibiting products that prevent rust and corrosion on metal surfaces.

Zerust ICT510

A corrosion inhibiting packaging material used to protect metal parts during shipping and storage.

Zerust ActivPak

A line of corrosion inhibiting packaging products that provide long-term protection for metal parts.

Zerust Tab

A corrosion inhibiting tablet that provides long-term protection for metal parts in enclosed spaces.

Zerust Vapor Capsule

A corrosion inhibiting product that releases a vapor that protects metal surfaces from corrosion.

Natur-Tec

A line of bioplastics and biodegradable materials used in packaging, disposable cutlery, and other applications.

8. Northern Technologies International Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Northern Technologies International Corporation is moderate, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Northern Technologies International Corporation is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Northern Technologies International Corporation is moderate, as the company relies on a few key suppliers, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for Northern Technologies International Corporation is high, as the industry has low barriers to entry and new companies can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry for Northern Technologies International Corporation is high, as the industry is highly competitive and companies are constantly competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 9.28%
Debt Cost 7.11%
Equity Weight 90.72%
Equity Cost 7.11%
WACC 7.11%
Leverage 10.23%

11. Quality Control: Northern Technologies International Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Oil-Dri

A-Score: 7.0/10

Value: 5.8

Growth: 9.0

Quality: 7.0

Yield: 4.0

Momentum: 10.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Hudson Technologies

A-Score: 5.3/10

Value: 5.3

Growth: 7.6

Quality: 6.5

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Core Molding Technologies

A-Score: 5.2/10

Value: 7.2

Growth: 5.9

Quality: 5.3

Yield: 0.0

Momentum: 7.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Hawkins

A-Score: 5.2/10

Value: 1.6

Growth: 7.9

Quality: 5.6

Yield: 1.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Kronos Worldwide

A-Score: 5.0/10

Value: 9.1

Growth: 2.7

Quality: 5.0

Yield: 9.0

Momentum: 0.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
NTIC

A-Score: 4.3/10

Value: 6.8

Growth: 5.8

Quality: 5.2

Yield: 3.0

Momentum: 0.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.38$

Current Price

7.38$

Potential

-0.00%

Expected Cash-Flows