Press Releases
Northern Technologies International Corporation Reports Financial Results for Second Quarter Fiscal 2016
Highlights of NTIC's fiscal 2016 second quarter financial and operating results include:
- Consolidated net sales increased 14.5% to
$7,705,000 - ZERUST® product net sales increased 10.4% to
$6,385,000 - Natur-Tec® product net sales increased 39.7% to a record
$1,320,000 - Total net sales of NTIC's joint ventures decreased 19.5% to
$42,000,000 - Joint venture operating income decreased 35.4% to
$953,000 $2,000,000 of cash was provided by operating activities for the three months endedFebruary 29, 2016 - Net loss attributable to NTIC was
$(108,000) , or$(0.02) , per share
"We experienced net sales growth of 14.5% for the fiscal 2016 second quarter,
driven by strong sales in
NTIC's consolidated net sales increased 14.5% to
The following table sets forth NTIC's net sales by product category for the three and six months ended
Three Months Ended | |||||||||||||||
% of Net | % of Net | % | |||||||||||||
2016 | Sales | 2015 | Sales | Change | |||||||||||
ZERUST® industrial net sales | $ | 5,220,614 | 67.8 | % | $ | 4,674,429 | 69.5 | % | 11.7 | % | |||||
ZERUST® joint venture net sales | 787,392 | 10.2 | % | 733,166 | 10.9 | % | 7.4 | % | |||||||
ZERUST® oil & gas net sales | 377,331 | 4.9 | % | 376,390 | 5.6 | % | 0.3 | % | |||||||
Total ZERUST® net sales | $ | 6,385,337 | 82.9 | % | $ | 5,783,985 | 86.0 | % | 10.4 | % | |||||
Total Natur-Tec® sales | 1,319,597 | 17.1 | % | 944,724 | 14.0 | % | 39.7 | % | |||||||
Total net sales | $ | 7,704,934 | 100.0 | % | $ | 6,728,709 | 100.0 | % | 14.5 | % |
Six Months Ended | |||||||||||||||
% of Net | % of Net | % | |||||||||||||
2016 | Sales | 2015 | Sales | Change | |||||||||||
ZERUST® industrial net sales | $ | 10,339,707 | 70.2 | % | $ | 9,677,204 | 69.4 | % | 6.8 | % | |||||
ZERUST® joint venture net sales | 1,305,742 | 8.9 | % | 1,466,270 | 10.5 | % | (10.9 | %) | |||||||
ZERUST® oil & gas net sales | 717,570 | 4.9 | % | 878,582 | 6.3 | % | (18.3 | %) | |||||||
Total ZERUST® net sales | $ | 12,363,019 | 83.9 | % | $ | 12,022,056 | 86.2 | % | 6.8 | % | |||||
Total Natur-Tec® sales | 2,366,352 | 16.1 | % | 1,920,748 | 13.8 | % | 23.2 | % | |||||||
Total net sales | $ | 14,729,371 | 100.0 | % | $ | 13,942,804 | 100.0 | % | 5.6 | % |
NTIC anticipates that sales of ZERUST® products and services into the oil and gas industry
will continue to remain subject to significant volatility from quarter to quarter as sales are recognized.
NTIC's equity in income of joint ventures decreased 35.4% to
Operating expenses, as a percent of net sales, for the fiscal 2016 second quarter were 57.0%, compared to 65.4% for the same period last fiscal year, primarily a result of stable selling expenses and general and administrative expenses and lower expenses incurred in support of joint ventures, partially offset by higher research and development expenses. Year-to-date, operating expenses, as a percent of net sales, were 61.8%, compared to 63.9% for the same period last fiscal year.
The company reported a net loss attributable to NTIC for the fiscal 2016 second quarter of
NTIC's balance
sheet remains strong, with no debt, and working capital of
Outlook
For the fiscal year ending
These estimates are subject to significant risks and uncertainties, including without limitation to risks and uncertainties relating to the change in NTIC's Chinese operations, pending litigation against NTIC's former Chinese joint venture partner, a possible future impairment charge on NTIC's investment in Tianjin Zerust, and other risks and uncertainties.
Conference Call and Webcast
NTIC will host a conference call today at
About
Forward-Looking Statements
Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Such statements include NTIC's expectations regarding its financial
guidance for fiscal 2016, its expectations regarding second half sequential improvements in net sales and earnings, anticipated increased demand from the oil & gas sector, continued increases in Natur-Tec® sales and trends in NTIC's industrial ZERUST® business remaining stable, continued variability in sales of ZERUST® products and services into the oil and gas industry, future market potential and success of NTIC's Chinese operations and other statements that can be identified by words such as "believes," "continues," "expects," "anticipates," "intends," "potential," "outlook," "will," "may," "would," "should," "guidance" or words of similar meaning, the use of future dates and any other statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of NTIC's management and are inherently subject to risks and
uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties include, but are not limited to, in no particular order: the effect on NTIC's business and operating results of the termination of NTIC's joint venture relationship in
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF
AND
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash and cash equivalents | $ | 2,531,340 | $ | 2,623,981 | |||||
Available for sale securities | 2,733,079 | 2,027,441 | |||||||
Receivables: | |||||||||
Trade excluding joint ventures, less allowance for doubtful accounts of | |||||||||
$40,000 at | 4,139,536 | 4,027,167 | |||||||
Trade joint ventures | 764,017 | 645,377 | |||||||
Fees for services provided to joint ventures | 1,206,625 | 1,449,162 | |||||||
Income taxes | 541,431 | 198,462 | |||||||
Inventories | 7,300,153 | 7,468,441 | |||||||
Prepaid expenses | 586,042 | 411,473 | |||||||
Deferred income taxes | 424,108 | 424,108 | |||||||
Total current assets | 20,226,331 | 19,275,612 | |||||||
PROPERTY AND EQUIPMENT, NET | 7,310,826 | 7,293,163 | |||||||
OTHER ASSETS: | |||||||||
Investments in joint ventures | 17,952,996 | 20,544,238 | |||||||
Investments at carrying value | 1,883,668 | 1,883,668 | |||||||
Deferred income taxes | 1,175,290 | 1,176,012 | |||||||
Patents and trademarks, net | 1,230,760 | 1,262,219 | |||||||
Other | 218,954 | 130,736 | |||||||
Total other assets | 22,461,668 | 24,996,873 | |||||||
Total assets | $ | 49,998,825 | $ | 51,565,648 | |||||
LIABILITIES AND EQUITY | |||||||||
CURRENT LIABILITIES: | |||||||||
Accounts payable | $ | 1,866,737 | $ | 2,101,175 | |||||
Accrued liabilities: | |||||||||
Payroll and related benefits | 475,634 | 1,056,257 | |||||||
Other | 402,903 | 514,409 | |||||||
Total current liabilities | 2,745,274 | 3,671,841 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||
EQUITY: | |||||||||
Preferred stock, no par value; authorized 10,000 shares; none issued and Outstanding | — | — | |||||||
Common stock, | |||||||||
shares; issued and outstanding 4,536,022 and 4,539,045, respectively | 90,720 | 90,781 | |||||||
Additional paid-in capital | 13,629,454 | 13,441,264 | |||||||
Retained earnings | 34,180,731 | 34,522,871 | |||||||
Accumulated other comprehensive loss | (3,653,208 | ) | (3,180,811 | ) | |||||
Stockholders' equity | 44,247,697 | 44,874,105 | |||||||
Non-controlling interest | 3,005,854 | 3,019,702 | |||||||
Total equity | 47,253,551 | 47,893,807 | |||||||
Total liabilities and equity | $ | 49,998,825 | $ | 51,565,648 | |||||
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED
Three Months Ended | Six Months Ended | ||||||||||||||
Net sales, excluding joint ventures | $ | 7,027,614 | $ | 5,995,543 | $ | 13,529,024 | $ | 12,476,534 | |||||||
Net sales, to joint ventures | 677,320 | 733,166 | 1,200,347 | 1,466,270 | |||||||||||
Total net sales | 7,704,934 | 6,728,709 | 14,729,371 | 13,942,804 | |||||||||||
Cost of goods sold | 5,268,224 | 4,657,740 | 10,143,647 | 9,464,351 | |||||||||||
Gross profit | 2,436,710 | 2,070,969 | 4,585,724 | 4,478,453 | |||||||||||
JOINT VENTURE OPERATIONS: | |||||||||||||||
Equity in income of joint ventures | 952,667 | 1,474,649 | 1,936,420 | 3,081,332 | |||||||||||
Fees for services provided to joint ventures | 971,042 | 994,860 | 2,456,471 | 3,128,530 | |||||||||||
Total joint venture operations | 1,923,709 | 2,469,509 | 4,392,891 | 6,209,862 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Selling expenses | 1,475,433 | 1,339,441 | 3,000,516 | 2,734,328 | |||||||||||
General and administrative expenses | 1,509,087 | 1,552,861 | 3,366,700 | 3,091,123 | |||||||||||
Expenses incurred in support of joint ventures | 297,470 | 656,127 | 614,464 | 1,183,244 | |||||||||||
Research and development expenses | 1,113,525 | 854,256 | 2,117,622 | 1,904,169 | |||||||||||
Total operating expenses | 4,395,515 | 4,402,685 | 9,099,302 | 8,912,864 | |||||||||||
OPERATING (LOSS) INCOME | (35,096 | ) | 137,793 | (120,687 | ) | 1,775,451 | |||||||||
INTEREST INCOME | 14,384 | 2,434 | 28,557 | 17,561 | |||||||||||
INTEREST EXPENSE | (10,796 | ) | (3,223 | ) | (15,522 | ) | (8,228 | ) | |||||||
OTHER INCOME | 961 | 2,145 | 961 | 2,145 | |||||||||||
(LOSS) INCOME BEFORE INCOME TAX EXPENSE | (30,547 | ) | 139,149 | (106,691 | ) | 1,786,929 | |||||||||
INCOME TAX EXPENSE | 40,466 | 197,614 | 36,964 | 381,298 | |||||||||||
NET (LOSS) INCOME | (71,013 | ) | (58,465 | ) | (143,655 | ) | 1,405,631 | ||||||||
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 36,776 | 70,179 | 198,485 | 526,010 | |||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO NTIC | $ | (107,789 | ) | $ | (128,644 | ) | $ | (342,140 | ) | $ | 879,621 | ||||
NET (LOSS) INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE: | |||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | 0.20 | ||||
Diluted | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | 0.19 | ||||
WEIGHTED AVERAGE COMMON SHARES | |||||||||||||||
ASSUMED OUTSTANDING: | |||||||||||||||
Basic | 4,537,429 | 4,522,514 | 4,536,995 | 4,516,311 | |||||||||||
Diluted | 4,537,429 | 4,522,514 | 4,536,995 | 4,655,792 |
Investor and Media Contacts:Source:Matthew Wolsfeld , CFO NTIC (763) 225-6600
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