July 9, 2026

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Northern Technologies International Corporation (NASDAQ: NTIC) reported fiscal third-quarter 2026 results with record revenue, strong growth across key product categories, and higher joint venture income, but earnings missed expectations as gross margin pressure pushed the company to a net loss.
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Northern Technologies develops corrosion prevention products and services under the ZERUST brand, along with bio-based and biodegradable polymer resin compounds under the Natur-Tec brand.
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The company reported an adjusted loss of $0.02 per share, below estimates of $0.04, representing a negative 150.0% earnings surprise. Revenue came in at $24.22 million, above estimates of $23.40 million, with revenue growth of 12.6%.
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One note before publishing: the company release reported GAAP net loss of $0.03 per diluted share and non-GAAP adjusted net loss of $0.02 per diluted share. The dashboard appears to use the adjusted figure.

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Results Showed Record Sales but Lower Profitability

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Consolidated net sales increased 12.6% to a record $24.2 million from $21.5 million a year earlier.
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The growth was driven by higher demand for ZERUST corrosion prevention products and Natur-Tec bioplastic solutions.
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Gross margin fell 477 basis points to 33.6%, pressured by higher raw material costs tied to global disruptions, including conflict-related impacts in the Middle East and Strait of Hormuz, along with competitive pricing pressure in the Natur-Tec business.
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Income before income taxes fell to $376,000 from $743,000.
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Net loss attributable to NTIC was $263,000, or $0.03 per diluted share, compared with net income of $122,000, or $0.01 per diluted share, a year earlier.
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Non-GAAP adjusted net loss was $158,000, or $0.02 per diluted share.

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ZERUST and Natur-Tec Sales Increased

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ZERUST industrial net sales increased 10.3% to a record $15.9 million.
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ZERUST oil and gas net sales increased 72.3% to a third-quarter record of $2.2 million, showing strong momentum in the company’s higher-margin energy-related corrosion prevention business.
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Natur-Tec product net sales increased 5.0% to a record $6.1 million.
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NTIC China net sales were $4.48 million, roughly flat compared with $4.51 million in the prior-year quarter.

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Joint Ventures and Balance Sheet

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Net sales at NTIC’s joint ventures, which are not consolidated in the company’s financial results, increased 15.1% to $26.7 million.
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Income from joint venture operations increased 12.2% to $2.6 million.
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NTIC ended the quarter with working capital of $20.0 million, including $7.3 million in cash and cash equivalents.
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The company also had $14.8 million in outstanding revolving line of credit and current portion of term loan balance.
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NTIC expects to receive more than $1.0 million from the pending sale of its Beachwood, Ohio facility, which is expected to close in fiscal 2027.

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Market Focus

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Investors are likely watching gross margin recovery, raw material costs, pricing actions, ZERUST oil and gas growth, Natur-Tec pricing pressure, joint venture income, debt levels, and whether NTIC can return to profitability in the fourth quarter.
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The revenue beat showed strong demand, but the earnings miss showed that cost inflation and margin pressure remain key concerns.

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The Bigger Picture

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Northern Technologies delivered strong sales growth, but profitability lagged.
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Record consolidated sales, higher ZERUST demand, growth in oil and gas, and increased joint venture income all point to solid customer demand. The problem was margin. Higher raw material costs and pricing pressure erased much of the benefit from revenue growth.
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Management said raw material costs have started to ease and that pricing and procurement initiatives should improve gross margin and profitability in the fourth quarter.
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