NTIC - Earnings call transcript Q1 2025 | Northern Technologies International Corporation

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Operator

Good day, and thank you for standing by. Welcome to Northern Technologies International Corporation First Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

As part of the discussion today, the representatives from NTIC will be making certain forward-looking statements regarding NTIC's future financial and operating results, as well as their business plans, objectives and expectations. Please be advised that these forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and that NTIC desires to avail itself of the protections of the safe harbor for these statements.

those that implied could due Form by risks uncertainties, advised those materially to XX-K, be most press and or NTIC's releases. on stated the including and subsequent also quarterly actual report Form differ results from certain recent reports Please annual in XX-Q on recent described forward-looking statements Please SEC. the will make read these with reports and other future filings that NTIC its any forward-looking or statements. duty disclaims NTIC revise to update

Patrick Lynch, over I today, would to hand ahead. conference like CEO. now your NTIC's to the go Please speaker

G. Lynch

morning. with I'm is and quarter issued A regarding Patrick I'm Good was Lynch, NTIC's morning first Matt press available and CEO, at our fiscal here results this CFO. XXXX ntic.com. financial Wolsfeld, NTIC's earlier release

our and financial business our referring quarter that we During year. fiscal a brief to conclude provide then when of first performance, first fiscal quarter the first session. today's will we aspects call, we Please update, results, are quarter the last a review XXXX to with question-and-answer various year-over-year note in comparison our discuss of of key

highest our demonstrate amidst to saw Furthermore, improved bring by of geographies results China several quarter ongoing the planning, Oil also Gas driven believe line well value economic across and important sales. we sales efficacy U.S. at sales and were as record sales I quarterly our trends customers & X top NTIC's joint NTIC's complexities. these ventures. the global all-time nearly years, NTIC's strategic record while industrial sales, first stable quarterly its consolidated Zerust enjoyed in Natur-Tec and as NTIC we resilience

achieve on quarter NTIC of basis. certain a of was continued gross successful able system quality Thanks growth execution improvement to year-over-year margin initiatives, another to the

half been in should second and investing expanding sales We fiscal which Zerust to due sales gas XXXX. increased have in accelerate Oil the turn customer of Gas activity, oil & infrastructure our also in

quarter XXXX. an start fiscal encouraging Overall, our to was first

bring will and profitability. fiscal environment we improved economic fluid, remains further Although sales anticipate XXXX the growth

So first drivers examine overview, for detail. more with let's the this the quarter in

XXXX, unit, increased quarter consolidated compared ended XX, $XX.X a first sales, X.X% quarter increase a Broken increase sales & million XX.X% in Oil total this our first a X.X% Zerust sales. November net included sales Gas and first Natur-Tec For the net to November industrial the business Zerust ended to in by down increase XX, XXXX. in quarter record as of net X.X% a net

ventures are our past as well joint years XXXX $XX.X have we year-over-year since do at the our as and in first Total which market European fiscal million. our to been we challenging economic for consolidate higher to quarter joint energy several due encouraging, political net sales by not X.X% trends ventures Stabilizing sales increased statements, financial uncertainties. prices for ventures, at the navigating by regional, conditions our joint

million. I by am in experienced that sales stabilize subsidiary. also quarter nearly owned geography incremental support to sales first $X continue encouraged year-over-year last increased XXXX. profitability XXXX our China X.X% in this that improving net optimistic fiscal China We NTIC this and and quarterly approaching are we market. in Fiscal remain to higher at China by NTIC trends in sales sales improve Sales to wholly continue at in cautiously demand helping XXXX, levels and fiscal to will XXXX

and the to in to this continue and our provides industrial segments, take the our committed long-term bioplastics We Chinese geography. steps operations enhance to we are market opportunities

significant likely will continue become for As in future. a China to result, a believe the us market geographic we

first Now $X.X with quarter, had million. moving Oil on Gas Zerust reaching to Oil Gas. & Zerust solid & sales a

levels were benefited several from orders had the timing and sales As below seasonality. first fourth large the of quarter quarter because quarter anticipated, previous

$X.X million, XX, increase XXXX. were Gas & Oil the over XX-month Zerust ended million for $X.X at Looking a a trailing November basis, XX.X% sales on XX-month period trailing

Demand continues pipeline and solutions, casings which & customers from existing on corrosion. grow today Gas and Zerust still oil Oil our of protecting among new tanks aboveground both storage to focus primarily

seasonal we patterns continue we in Oil fiscal Zerust this expect fluctuations to are beyond. drive growth to we positioned Gas & believe sector compelling and in XXXX ordering While for through well sales,

occur I & oil quarter second of Zerust half investments in sales strategic fiscal XXXX. Gas mentioned expect the As our sales accelerated gas during first earlier, that expand Oil support we to made to and we infrastructure to the

business. as the continued million. expanding new sales during and India, $X.X a remained customers. a existing strong well relationships in to customer increased quarterly as growth first year-over-year to Turning record bioplastics was our during North with wins quarter Natur-Tec Natur-Tec's XX.X% of Natur-Tec the quarter of and result America

We sales XXXX. growth strong to expect Natur-Tec fiscal in remain

we plastics robust for conventional as increased well to as as to and alternatives compostable use market Globally, continue commercial applications plastics plastics. new certified municipal and compostable demand that programs see compounds, resin certified of products in interest

XXXX is to solid fiscal see, can off you As a start.

excited by the momentum is the headed. direction are We NTIC underway positive and

hard employees Before acknowledge partners. of I joint want work I and over the Matt, turn our venture global dedication the and team to to call of both

turn and efforts. are Matt Wolsfeld our Our the summarize of financial the call fiscal recent opportunities result the pursuing for we are quarter. their With first this success let me to over XXXX overview, direct a results now to

Matthew Wolsfeld

X.X% Sales increased sales at positive income higher operating his period. fiscal global ventures prior to increased X.X%, increase to increased of net compared our the joint trends sales in due primarily an fiscal in the year year ventures. joint venture record quarter XXXX million net because to and quarterly $XX.X remarks. period, the in Compared X.X% of reviewed prior NTIC's NTIC's first income quarter the first in fiscal consolidated a prepared across to Joint the Patrick. Patrick Thanks, of

increased million, On in and half and Total basis, with the a in year fiscal $X.X increased due making the XX% operating to gas of we're operating XXXX to the support growth our first business. expected were quarter expenses compared within strategic sequential to the quarter expenses personnel second oil fourth to first for line period quarter. fiscal primarily prior costs investments year

quarter were the prior operating for expenses compared period. a the for first of net XX.X% XX.X% sales, As fiscal year to percentage

a sales year $XXX,XXX months Gross taken The during share actions of attributable per by per successful percentage the November compared XXXX the income inflationary $X.XX profit fiscal first share fiscal was or ended to for $XXX,XXX or of quarter company for the the first pressures. Net XX, prior result net during basis NTIC XX.X% point X of $X.XX to address quarter to to was XXX compared period. diluted diluted a XXXX. was as XX.X% primarily improvement the

net first release compared share or in $X.XX was our of per adjusted $X issued reconciliation $XXX,XXX the of earnings diluted year. A net diluted that this non-GAAP morning. non-GAAP $X.XX available measures non-GAAP of NTIC's quarter, or income share first GAAP adjusted to last the quarter million was per press is for to The income financial

capital equivalents, As including cash August compared million as $XX.X XX, XXXX, $X.X to million, in XX, November included of cash was million, cash $X and and working $XX.X cash which million in equivalents XXXX. of

strategic of positive our in debt included 'XX. XX, credit $X.X flow to efficiencies million of As and million. we cash operating This $X.X XXXX, will of Reducing outstanding in focus million debt through revolving compared August capital existing line fiscal improving as under $X.X had borrowings be of XXXX. a working XX, November

primarily cash XX, ended cash, in operating On We XXXX, for other of million invested million months $XX.X November XXXX. which flow had balance in the $X.X in the November million the in joint remaining generated XX.X% with or in X capital. investments $XX.X XX, working ventures, company was

of dividend November During on Board quarterly fiscal that per XX, of payable share stockholders XXXX quarter, first declared cash was $X.XX to of NTIC's record a common XXXX, XX, XXXX. Directors October on

growth results off record prepared oil to consolidating sales, growth global a of American fiscal and our XXXX the year. first and markets. gas in the half We're -- stable second planned expanding and financial investments our trends gross conclude sales and solid reflecting are our support bioplastic seeing To to margin robust across North consolidated quarter remarks, start, expected

these trends expect continue. We to

and will and result, a our are prospects. questions. this higher I XXXX we're and As your year Patrick long-term overview, by NTIC, take believe for excited profitability With of happy fiscal be our good sales another we to

Operator

first Clemens Inc. line Our the Instructions] [Operator from from comes Van Clarkson of Tim question

Timothy Clarkson

quarter. few Hey, the I last one, questions. got Good sorry. missed more guys. We've a

point, this Zerust this of use percentage the what Technology of to technology? treatment, that potential best at to new tanks what So potential are tanks those have with percentage Northern a treated being

Matthew Wolsfeld

Tim. I'm not sure I or your your call understand question,

Timothy Clarkson

have there, okay. turnover putting much to up total Well, of out those And tanks new your when know is the total there's they what I -- don't tanks of they're tanks, where your to there, course, right? per year best out opportunity treatment, So use how percentage the be you've a replaced. -- of got number

replaced the you're So they're being I Those treatment. your new that out they best because putting are market, because your capacity. putting or tanks rusted use looking the ones I'm probably guess replacement up up to that, opportunities at new are

best we now? So do have that opportunities, right the those replacement percentage the tanks of market tanks, new what of and

Matthew Wolsfeld

that used I [ the where essentially there at X%. what this available revenues to get you Even would the you're say are out take tanks point a amount taking where infrastructure, as we're there, yet. it's -- you -- ] in we existing an protect have, if not time, out at is that traditionally the mean, the to it's the technology. even measurable. it's the that not that solution obviously, hoping -- expectation look even not and tanks I even market of there are over point around the markets, to you're over The at we're point a

Timothy Clarkson

the the What's option? your versus technology of Right. existing cost

Matthew Wolsfeld

protection. X/X which our [ is of solution, -- It's is the traditional of roughly cost Casati the the ] option

Timothy Clarkson

Okay.

-- say treatment, do what a that cost $X.X for -- -- of So front million, let's be $X.XX treatment, you on your typical a million? and how would say the when end much

Matthew Wolsfeld

be the revenue we There's It if if also anywhere football generated a about of a that tank. a maybe talking tank you're standard that X several charge mean standard very portion from chemistry from it the tank, to upwards is larger X sized smaller that's might it's of charge hundred for small. size the of the $XX,XXX thousand can tanks $XX,XXX we XX-meter dollars tanks, fields. I

footage obviously square you're the protection depends or it that on So providing.

Timothy Clarkson

Sure.

there from percentage installation? flow Now you an ongoing that is -- that what revenues installation, once do

Matthew Wolsfeld

you the infrastructure. as after years recharge X-plus typically tanker, revenues the recharge ongoing There's

Timothy Clarkson

Okay.

they of or than are And that? less would or it it is mean, that the above -- than Okay. Or XX% original be treatment? more that I

Matthew Wolsfeld

what kind point figure we're mean, that of And gather more I starting of work. recharge we're on to It's to we schedules data are of fits tanks. that the for of we're some percentage how expect of getting the lines are, kind to core. lot kind their to what a time starting Yes. to what a seeing. requirements into that's We're the what where should do inspect now out them going forward, and their

Timothy Clarkson

market there? And those point opportunities that at installations I'm you're are guessing Right. to good for continue selling when additional out to

Matthew Wolsfeld

Certainly.

Timothy Clarkson

Certainly.

Okay. that's going on are the end, on it's going new And there plus. really there? XX% good What's compostable -- Is growth, mean, -- I there what's on that's there exciting?

Matthew Wolsfeld

we will manufacture their from growth the excitement with call I to develop we're working think, that XX, think the opportunities that biggest accelerate say space, kind I'd to that companies to over with resins the some we're XX should Natur-Tec. X, the -- months, to the from products. next that continues let's see There's I specialized the coordinating from success of nice be them continue working compostable -- on and

have normal selling of their own cutlery still manufacture of on growth which the background existing also or but resin to going bin things liners kind products, the of on. the certainly there's like of to companies sales we're that, You working things the of certainly kind distribution from

probably revenue over Natur-Tec I drive So months and thing going to that's what's to X think going the certainly that to forward. we're the next exciting going most XX see the

Timothy Clarkson

Sure.

too this back, on X I Or guys $X have the that question a is you million tanks potential last mean is ambitious? just year? Going $X quarter to there for to a deal. million

Matthew Wolsfeld

Inside Natur-Tec? of

Timothy Clarkson

flipping of the oil -- business. tank inside to I'm the No, back

Matthew Wolsfeld

oil we mean, year, last did of from if and standpoint, some fourth I opportunities gas. you quarter a look working we're I at in sizable that the -- million. There Yes, so. certainly in hope revenue on are $X.X we

a last -- some work our some year, and -- the saw the protection things third pipe pipeline we lot quarter in of a we work oil the you But and we're quarter the that happen is third of and like this have the like of the with doesn't we because that of the some kind expectations in of fourth winter. and casings larger that stuff seasonal year. of projects of fourth that and some doing the certainly, in expectations expect One part and gas of get of bit repeat is of and of the the grow to

company-wide, standpoint kind kind for trend in current what the to certainly I of far the an backlog strongest of So XX third the That's similar I quarter go would -- Natur-Tec year, where years, don't kind expect quarter second quarter our if a would has on seeing our the and industrial and historically -- I standpoint. not oil based projects expect the typically, as be an a you as see back historically quarter. and accelerate. gas fourth second and from is I'm to things And is typically, that XX, why sales. standpoint, of expect acceleration

the doable. that million growth, $X think do is I the plus certainly quarter So

I'll see over the let's The go that global 'XX, it I'm back half other that hired have then hiring develop. to traction, the meaning to dramatically a that after of for accelerated quarter we we -- opportunities investments say, is the or the time sorry, have and specifically past fiscal But in third to that's And our we of that the little takes 'XX and fourth to gas fiscal a in months, something our half team. results and say space the, back develop beyond. into on made XX-plus we've the the market, expect people the thing for XX that that the us, sales space XX, oil

kind able So for to and of developing be bigger the of increase we're internal the gearing up better things in revenue and handle infrastructure those kind to groups. from

what excited really company gets standpoint. that's a me so from And

Timothy Clarkson

to Sure, is Switching China China, sure. how doing come better?

Matthew Wolsfeld

China, of questions Chinese if compared you I we you not what's $X.X were, I can a all we in going going look standpoint, saw just wish revenue I on so at we of in of -- amount China kind saw tell expected from our on you're we're to answer there in -- in about on slight I is -- could the recovery. $X general, where million we that what's a China. compared revenue QX. a in talking QX million selling in in huge kind to to be. mean, where our The

XX% a almost in increase that's -- is sales. there So

things certain little a starting to think kind accelerate of recover that I there are are and bit there.

team in our being China is -- sales on things in also compared protecting domestic before. also there's think working I solely and China there some to focused on exports

I gone there's that that recovery haven't there's we're of happen markets bit So after to think And China. before. a we in after a going starting

might there's the a countries. with There's Some a know specifically standpoint things uncertainty happen the that. to increase of going temporary. on because in like activity of the China, huge from obviously tariffs presidents now, of I a between be it in changing and going and geopolitical of what's that right lot

but our when regardless, we're expectations to decline a China because see New China -- mid-January. in our see is So QX change Year just are how of going forward, going that's in in we'll kind Chinese things that

in quarter that China. And we're than that going But see a so and we see to our QX QX will similar slowdown are second be expectations from or then QX. better slightly always

this beyond from So million expectations $XX.X our China all to $XX-plus last million is all, year. are going grow to year and doing in that

Timothy Clarkson

you Great. your anything talk One in last exciting question. R&D can particularly Is that that's there about?

Matthew Wolsfeld

No.

gets we're the kind gas The of an say, is in technologies standpoint, the there adoption and and companies' we're starting on and an and and what's oil in and blocking it's our budgets working the and think from additional, Natur-Tec let's rollout R&D the -- is of standpoint. and exciting of that standpoint. our I start into from look as seeing seeing put quarter -- from get my tackling to the work gas of we planning the doing and excited what beyond, for at projects third fourth me oil kind

Timothy Clarkson

Good. All Great. right. Good Great. quarter.

Operator

from Markets. Northland Gus Our [Operator line Instructions] the Richard question from of comes Capital next

Auguste Richard

give Zerust, bit to just could little color. growth? forward? market, Or it I you expect was going has do a you could some On remain wondering on of stabilized. like there if stable business Just looks it that be And that

G. Lynch

looking the at still now. trying happen economy. to We're in They're feeling Right see to market more a we're right their now. German what's going now, of stability with pain right the with industry some automotive

Auguste Richard

Europe, question. pressure? Or Got it. JV what's follow you of pull to a expect and be that And similar expect I the do Do continue flat? was on you up going Germany, is revenue to to in sort with JVs, going there Europe given going you can

G. Lynch

Well talking feeling the example, they're in fantastic pain mean, situation. for depends quarter. you're country a we're where for example Germany, having I because it Finland, in really on of Volkswagen-Audi which about. Versus more

aside for just part, well. is we're the joint Europe think about. Germany, venture I It's the So the from most -- worried Germany in doing that pretty

Auguste Richard

Got it. know XX-XX, half? And oil in and is XX-XX a of pretty half first of give you lumpy. sense that that for I wait, sort the second X/X half would to half, -- maybe oil still terms relative like half but over second gas Can second is business and gas it then first not first X/X how seasonality, half, --

Matthew Wolsfeld

look second half. it, or Yes. you're mean, at I X/X, think I I XX-XX I something if first far looking as at X/X close mean as to half,

Auguste Richard

And me. year? roughly last point, Got it. for Natur-Tec And it. this sort growth Got this XX% can feel of at you sustain do helpful. X Super like

Matthew Wolsfeld

Overall, as a total company, XX% growth?

Auguste Richard

No, no, no.

Natur-Tec. Just

Matthew Wolsfeld

around expectation from Natur-Tec, look it's yes, that for expectations standpoint, at number as far yes. as an right If I --

Auguste Richard

All it. Got right. helpful. Very

Operator

Joe LLC. Capital Vidich of comes from next Management Our from Instructions] line Manalapan the [Operator question Oracle

Joseph Vidich

if to you the regarding be a something I that's whether the started as you've progress we could you with forward Great upon? Natur-Tec, the recurring consider just to was to sales look outlook. basically once -- see building just could wondering and customer, whether

Matthew Wolsfeld

-- Natur-Tec past starting typically, is the in And then keep product. sell exactly repeat It's -- a and step worked matter to revenue. signing have of function a the to has is forward. you do It's that expectations distributors, that the adding up what how of going you on kind business,

work Natur-Tec So Natur-Tec which forecastable impact out typical a during on is past lends had of the the a how you itself if see up discount nature you obviously that in of what there what you distributor, happened and impacted with working which everybody's seen as from to you growth, on kind it's we COVID, given or get sign projects project we've a growth. daily -- that's on what But major typically life. you ramp them consistent month-by-month up

Joseph Vidich

Right. the wondering business, frame Great. what salesperson -- if the up the terms if about you time. talked could was is? And gas regard you talk then just And and Right. that's time running. new was in Great. just getting cycle to your about I of Great. also with then sales and sales oil and pipeline I talk what also a about over how wondering progressed

G. Lynch

repeat Could the you please? question,

Joseph Vidich

Hello?

G. Lynch

your Could please? you question, repeat

Joseph Vidich

Yes. sure. Yes,

regard Zerust the over how talk new to over wondering oil & you roughly sales? Oil you period really has business, see and what gas the the sales also pipeline with and pipeline then to do time So could Gas, of regarding salespeople, becoming adding time? them sales the And if I your progressed about was

G. Lynch

history really to hired in months takes the the about generally them salesperson learn be we've year and effective. company, of start business to to a ever any the With X

some year. really we'll of to a see the pickup major start probably trying by impact the end going this We're to year, hired. of next So the you're fiscal see not but people fiscal until we the see pickup to

Joseph Vidich

seeing talk sales And -- -- seen a wondering bit -- could terms maybe was orders? customers? of talk about where or size you are repeat the about you're size of where I are who sales? come Are if it? seeing just the pipeline, you've are -- customers that the Right. you just And globally, little your And new? in the you also too, potential Is

G. Lynch

But customers. steady coming repeat -- new along. America, North sales But we're still In existing some over up as they're time. building announcing we're repeat also we're yes, business. from obviously, adding primarily that we're customers Internationally,

see have up will pan to that's know once We to XX we -- fully these we'll out going speed. people more how

Joseph Vidich

of is And existing whatever the people XX top sales new had? XX -- people that you staff on

G. Lynch

correct. is that Yes,

Matthew Wolsfeld

X I'm the and X with technical not other are associated salespeople. that saying XX There's people probably gas. or and oil salespeople

Joseph Vidich

Right, between down right, the you terms is, Zerust of just as you like My it do in & Gas, break Natur-Tec Oil at right. that? I final was Chinese and could and Zerust all wondering, down question sales, that break

G. Lynch

that. Zerust you but Gas, are in Oil Sure. & and out going Natur-Tec terms help I the of mentioned then Zerust, with to the investors

Matthew Wolsfeld

XX% would So and Natur-Tec, if is historical -- at Southeast in sales, it's North looking I'm North is rest at we the of sales the number China. business the China mean -- the XX% and India I American sales at China roughly other being I outside say parts of the are that about in of America, you're Asia. business the

Joseph Vidich

right, right, right. Right,

guys. got, that's Anyway, you appreciate all my questions. taking I Okay. I

Matthew Wolsfeld

Thanks, Joe.

Operator

comes Instructions] question Hall of line next Our Don ]. the [Operator [ from

Unknown Analyst

Just question. Excuse me. X simple

last to -- a Your the all sales on in your expenses as I've the infrastructure. elaborate although previous of conversation. I'm quoting increased more, you wanted And been listening your little reason to expanded I because that was, And quarter. the

or say So support Can and sales you're describe Can how? Are territories? people. salespeople a brand more, these number little you new that hiring where a of you please?

G. Lynch

Southeast and Middle East.

Unknown Analyst

sorry? I'm

G. Lynch

Southeast Asia East. and Middle

Unknown Analyst

comments. sorry, I'm your -- pick up I missed didn't I

G. Lynch

the Asia are primarily and East Southeast Middle sorry, is people where these I'm located.

Unknown Analyst

territories, they? Southeast and are these Asia are -- brand-new

G. Lynch

Yes.

Unknown Analyst

I see.

I Southeast hope assume great Asia Well, and got it's does. Middle promise. it I East.

G. Lynch

think We so.

Operator

now would conference turn like I to the closing remarks. time, back Lynch Patrick to this for At

G. Lynch

you a wish day. for I today the want nice to thank in call everybody participating and

Operator

This call. participating. for you Thank concludes today's conference

disconnect. You now may

Northern Technologies International (NTIC) 9 Jan 252025 Q1 Earnings call transcript