Northern Technologies International Corporation Reports Increased Sales for First Quarter Fiscal 2013

Northern Technologies International Corporation Reports Increased Sales for
First Quarter Fiscal 2013

MINNEAPOLIS, Jan. 11, 2013 (GLOBE NEWSWIRE) -- Northern Technologies
International Corporation (Nasdaq:NTIC) today reported its financial results
for first quarter of fiscal 2013. Highlights of NTIC's financial and operating
results include:

  *NTIC's consolidated net sales increased 9.5% during the three months ended
    November 30, 2012 compared to the three months ended November 30, 2011.
    This increase was primarily a result of increased sales of Natur-Tec®
    products and ZERUST® rust and corrosion inhibiting packaging products and
    services.
    
  *On September 1, 2012, NTIC increased its ownership interest in NTIC Asean,
    LLC, which is a holding company that holds investments in eight joint
    venture entities that operate in the Association of Southeast Asian
    Nations (ASEAN), from 50% to 60% by contributing exclusive license rights
    and other intellectual property to NTI Asean in exchange for an additional
    10% ownership interest. As a result of such transaction, NTIC's
    consolidated results for the three months ended November 30, 2012 include
    the results of NTIC Asean, LLC.
    
  *Net sales of Natur-Tec® products increased 30.8% during the three months
    ended November 30, 2012 compared to the three months ended November 30,
    2011. This increase was due to increased sales to Natur-Tec® distributors
    in the United States as NTIC has continued to strengthen and expand its
    U.S. distribution network.
    
  *Net income attributable to NTIC decreased 59.4% to $389,622, or $0.09 per
    diluted common share, for the three months ended November 30, 2012
    compared to $958,757, or $0.22 per diluted common share, for the three
    months ended November 30, 2011. This decrease was primarily the result of
    decreases in gross profits of NTIC's North American businesses as well as
    decreases in sales and earnings of NTIC's subsidiary in Brazil.

"In the first quarter of fiscal 2013, NTIC enjoyed a strong increase in
top-line sales, as we began supplying several large new customers in both our
ZERUST® Industrial as well as our Natur-Tec® businesses. In direct correlation
to this sales growth, however, we also experienced greater than anticipated
start-up costs as we were compelled to ramp up production on an exceptionally
broad range of new products simultaneously. This lowered our margins and
impacted our earnings during the first quarter, and we do not expect to see
the full bottom- line benefit of these new business opportunities before the
third quarter of this fiscal year," said G. Patrick Lynch, President and Chief
Executive Officer of NTIC. "At the same time, overall revenues from our
international joint venture operations remain stagnant," continues Lynch, "as
the Euro zone's economic slowdown continues to negatively impact manufacturing
not only in Europe, but also key countries that supply EU manufacturers,
including Brazil, India and parts of Asia."

During the three months ended November 30, 2012, 90.6% of NTIC's consolidated
net sales were derived from sales of ZERUST® products and services, which
increased 7.7% to $4,795,283 compared to $4,452,646 during the same prior
fiscal year period, due primarily from increased demand from existing
customers and the addition of new customers. NTIC has focused its sales
efforts of ZERUST® products and services by strategically targeting customers
with specific corrosion issues in new market areas, including the oil and gas
industry and other industrial sectors that offer sizable growth opportunities.
NTIC's consolidated net sales during the three months ended November 30, 2012
included $551,814 of sales made by Zerust Brazil, and of those sales, $40,385
in sales were made to the oil and gas industry sector in Brazil.

During the three months ended November 30, 2012, 9.4% of NTIC's consolidated
net sales, respectively, were derived from sales of Natur-Tec® products, which
increased 30.8% to $496,464 compared to the three months ended November 30,
2011. This increase was due to increased sales to Natur-Tec® distributors on
the West Coast of the United States as NTIC continued to strengthen and expand
its U.S. industrial distribution.

Lynch added that, "As we introduce new technologies, we also continue to add
oil and gas industry companies to our list of customers in several countries,
including the United States. However, we expect sales to these new clients to
build slowly, as technical evaluations and implementation roll-out plans are
finalized."

NTIC's equity in income of joint ventures decreased 15.0% to $1,154,296 during
the three months ended November 30, 2012 compared $1,357,680 during the three
months ended November 30, 2011 primarily as a result of the consolidation of
NTI Asean.

NTIC recognized increased fee income for services provided to joint ventures
primarily as a result of consolidation of the fees for services earned by NTI
Asean, partially offset by a 4.4% decrease in total net sales of NTIC's joint
ventures to $27,524,934 during the three months ended November 30, 2012
compared to $28,795,232 for the three months ended November 30, 2011. Total
net sales of NTIC's joint ventures were adversely affected in part by the
European economic slowdown, which NTIC believes also adversely affected net
sales of certain of NTIC's other non-European joint ventures. Sales of NTIC's
joint ventures are not included in NTIC's product sales and are not combined
with NTIC's sales in NTIC's consolidated financial statements or in any
description of NTIC's sales.

NTIC's total operating expenses increased 9.9% to $3,727,684 during the first
quarter of fiscal 2013 compared to $3,393,068 for the first quarter of fiscal
2012 primarily as a result of an increase in expenses incurred in support of
joint ventures and research and development expenses, which NTIC consider
critical to pursuing various new business opportunities around the world.

Net income attributable to NTIC decreased 59.4% to $389,622, or $0.09 per
diluted common share, for the three months ended November 30, 2012 compared to
$958,757, or $0.22 per diluted common share, for the three months ended
November 30, 2011. This decrease was primarily the result of decreases in
gross profits of NTIC's North American businesses as well as decreases in
sales and earnings of NTIC's subsidiary in Brazil. NTIC anticipates that its
quarterly net income will remain subject to significant volatility primarily
due to the financial performance of its joint ventures and sales of its
ZERUST® products and services into the oil and gas industry and Natur-Tec®
bioplastics products, which sales fluctuate more on a quarterly basis than the
traditional ZERUST® business.

As of November 30, 2012, NTIC's working capital was $15,306,871, including
$6,819,036 in cash and cash equivalents, compared to working capital of
$10,060,081, including $4,137,547 in cash and cash equivalents, at August 31,
2012.

Outlook

For the fiscal year ending August 31, 2013, NTIC has not changed its previous
guidance and expects its net sales to range between $27.0 million and $28
million, and expects net income of between $4.4 million to $4.7 million, or
between $1.00 and $1.05 per diluted share.

Conference Call and Webcast

NTIC will host a conference call today at 8:00 a.m. Central Standard Time to
review its results of operations for first quarter of fiscal 2013 and its
future outlook, followed by a question and answer session. The conference call
will be available to interested parties through a live audio webcast available
through NTIC's website at www.ntic.com or http://ir.ntic.com/events.cfm where
the webcast will be archived and accessible for at least 12 months. The
dial-in number for the conference call is (877) 670-9779 and the confirmation
code is 86517226.

About Northern Technologies International Corporation

Northern Technologies International Corporation develops and markets
proprietary environmentally beneficial products and services in over 55
countries either directly or via a network of joint ventures, independent
distributors and agents. NTIC's primary business is corrosion prevention
marketed primarily under the ZERUST® brand. NTIC has been selling its
proprietary ZERUST® rust and corrosion inhibiting products and services to the
automotive, electronics, electrical, mechanical, military and retail consumer
markets, for over 35 years, and in recent years has targeted and expanded into
the oil and gas industry. NTIC offers worldwide on-site technical consulting
for rust and corrosion prevention issues. NTIC's technical service consultants
work directly with the end users of NTIC's products to analyze their specific
needs and develop systems to meet their technical requirements. NTIC also
markets and sells a portfolio of bio-based and biodegradable polymer resin
compounds and finished products marketed under the Natur-Tec® brand.

The Northern Technologies International Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5481

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 future financial performance and other statements that can be
identified by words such as "believes," "anticipates," "expects," "intends,"
"continue," "potential," "outlook," "will," "would," "should," "guidance" or
words of similar meaning, the use of future date 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: NTIC's
dependence on the success of its joint ventures and fees and dividend
distributions that NTIC receives from them; NTIC's relationships with its
joint ventures and its ability to maintain those relationships; risks related
to the European sovereign debt crisis, economic slowdown and political unrest;
risks associated with NTIC's international operations; exposure to
fluctuations in foreign currency exchange rates; the health of the U.S. and
worldwide economies, including in particular the U.S. automotive industry; the
level of growth in NTIC's markets; NTIC's investments in research and
development efforts; acceptance of existing and new products; increased
competition; the costs and effects of complying with changes in tax, fiscal,
government and other regulatory policies, including rules relating to
environmental, health and safety matters; and NTIC's reliance on its
intellectual property rights and the absence of infringement of the
intellectual property rights of others. More detailed information on these and
additional factors which could affect NTIC's operating and financial results
is described in the company's filings with the Securities and Exchange
Commission, including its most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q. NTIC urges all interested parties
to read these reports to gain a better understanding of the many business and
other risks that the company faces. Additionally, NTIC undertakes no
obligation to publicly release the results of any revisions to these
forward-looking statements, which may be made to reflect events or
circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events.

                                                             
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2012 (UNAUDITED)
AND AUGUST 31, 2012 (AUDITED)
                                            November 30, 2012 August 31, 2012
ASSETS                                                        
CURRENT ASSETS:                                               
Cash and cash equivalents                    $ 6,819,036       $ 4,137,547
Receivables:                                                  
Trade excluding joint ventures, less
allowance for doubtful accounts of $20,000   2,684,239         2,516,961
at November 30, 2012 and August 31, 2012
Trade joint ventures                         942,500           734,543
Fees for services provided to joint ventures 2,328,455         1,316,933
Income taxes                                 253,759           58,129
Inventories                                  4,989,833         4,151,197
Prepaid expenses                             698,808           548,331
Deferred income taxes                        596,085           596,085
Total current assets                         19,312,715        14,059,726
                                                             
PROPERTY AND EQUIPMENT, NET                  4,238,359         4,288,618
                                                             
OTHER ASSETS:                                                 
Investments in joint ventures                21,435,223        21,461,492
Deferred income taxes                        1,030,610         1,030,610
Patents and trademarks, net                  1,012,401         961,181
Other                                        76,000            76,000
Total other assets                           23,554,234        23,529,283
Total assets                                 $ 47,105,308      $ 41,877,627
                                                             
LIABILITIES AND EQUITY                                        
CURRENT LIABILITIES:                                          
Current portion of note payable              76,119            76,120
Accounts payable                             1,810,330         1,818,309
Accrued liabilities:                                          
Payroll and related benefits                 1,699,938         1,565,866
Deferred joint venture royalties             288,000           288,000
Other                                        131,457           251,350
Total current liabilities                    4,005,844         3,999,645
                                                             
NOTE PAYABLE, NET OF CURRENT PORTION (Note   914,384           933,413
7)
                                                             
COMMITMENTS AND CONTINGENCIES (Note 13)                       
                                                             
EQUITY:                                                       
Preferred stock, no par value; authorized    —                 —
10,000 shares; none issued and outstanding
Common stock, $0.02 par value per share;
authorized 10,000,000 shares; issued and     88,351            88,073
outstanding 4,418,821 and 4,403,656,
respectively
Additional paid-in capital                   11,305,834        11,130,966
Retained earnings                            25,649,655        25,260,034
Accumulated other comprehensive income       664,247           277,583
Stockholders' equity                         37,708,087        36,756,656
Non-controlling interest                     4,476,993         187,913
Total equity                                 42,185,080        36,944,569
Total liabilities and equity                 $ 47,105,308      $ 41,877,627
                                                             


NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011
                                          Three Months Ended
                                          November 30, 2012 November 30, 2011
NET SALES:                                                  
Net sales, excluding joint ventures        $4,770,387       $4,277,643
Net sales, to joint ventures               521,360           554,471
Total net sales                            5,291,747         4,832,114
                                                           
Cost of goods sold                         3,690,972         3,209,476
Gross profit                               1,600,775         1,622,638
                                                           
JOINT VENTURE OPERATIONS:                                   
Equity in income of joint ventures         1,154,296         1,357,680
Fees for services provided to joint        1,846,277         1,445,252
ventures
Total joint venture operations             3,000,573         2,802,932
                                                           
OPERATING EXPENSES:                                         
Selling expenses                           1,171,095         1,108,486
General and administrative expenses        1,248,696         1,270,013
Expenses incurred in support of joint      369,687           200,264
ventures
Research and development expenses          938,206           814,305
Total operating expenses                   3,727,684         3,393,068
                                                           
OPERATING INCOME                           873,664           1,032,502
                                                           
INTEREST INCOME                            25,346            8,060
INTEREST EXPENSE                           (6,474)           (5,966)
OTHER INCOME                               —                 6,825
                                                           
INCOME BEFORE INCOME TAX EXPENSE           892,536           1,041,421
                                                           
INCOME TAX EXPENSE                         134,000           106,000
                                                           
NET INCOME                                 758,536         935,421
                                                           
NET INCOME (LOSS) ATTRIBUTABLE TO NON     368,914          (23,336)
CONTROLLING INTEREST
                                                           
NET INCOME ATTRIBUTABLE TO NTIC            $389,622         $958,757
                                                           
NET INCOME ATTRIBUTABLE TO NTIC PER COMMON                  
SHARE:
Basic                                      $0.09            $0.22
Diluted                                    $0.09            $0.22
                                                           
WEIGHTED AVERAGE COMMON SHARES ASSUMED                      
OUTSTANDING:
Basic                                      4,406,205        4,355,666
Diluted                                    4,440,436        4,433,724
                                                           

                                          
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPRENSIVE INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011
                                          Three Months Ended
                                          November 30, 2012 November 30, 2011
                                                           
NET INCOME                                 $758,536        $935,421 
OTHER COMPREHENSIVE INCOME (LOSS) –        421,185           (1,188,071)
FOREIGN CURRENCY TRANSLATIONADJUSTMENT
                                                           
COMPREHENSIVE INCOME (LOSS)                1,179,721        (252,650)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE   403,435           (33,142)
TO NONCONTROLLING INTERESTS
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE   $776,286         $(219,508)
TO STOCKHOLDERS
                                                           


NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011
                                                    Three Months Ended
                                                    November 30, November 30,
                                                     2012         2011
CASH FLOWS FROM OPERATING ACTIVITIES:                            
Net income                                           $758,536    $935,421
Adjustments to reconcile net income to net cash used             
in operating activities:
Expensing of fair value of stock options vested      43,393       72,523
Depreciation expense                                 105,688      80,887
Amortization expense                                 17,445       38,713
Equity in income from joint ventures                 (1,154,297)  (1,357,680)
Changes in current assets and liabilities:                       
Receivables:                                                     
Trade, excluding joint ventures                      (205,361)    (410,029)
Trade, joint ventures                                (207,957)    144,157
Fees for services receivables, joint ventures        330,564      (38,883)
Income taxes                                         (196,635)    (1,396)
Inventories                                          (865,175)    (158,234)
Prepaid expenses and other                           (151,029)    (349,112)
Accounts payable                                     24,296       (489,032)
Income tax payable                                   4,191        (17,512)
Accrued liabilities                                  22,201       (235,365)
Net cash used in operating activities                (1,474,140)  (1,785,543)
                                                                
CASH FLOWS FROM INVESTING ACTIVITIES:                            
Dividends received from joint ventures               2,676,337    2,031,450
Additions to property and equipment                  (67,165)     (51,031)
Effect of NTI Asean consolidation on cash (Note 2)   1,612,768    —
Additions to patents                                 (68,665)     (44,702)
Net cash provided by investing activities            4,153,275    1,935,717
                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:                            
Repayment of note payable                            (19,030)     (19,029)
Dividend received by non-controlling interest        (72,842)     —
Proceeds from employee stock purchase plan           28,938       22,414
Proceeds from exercise of stock options              102,815      —
Net cash provided by financing activities            39,881       3,385
                                                                
EFFECT OF EXCHANGE RATE CHANGES ON CASH:             (37,527)     (12,550)
                                                                
NETINCREASE IN CASH AND CASH EQUIVALENTS            2,681,489    141,009
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     4,137,547    3,266,362
                                                                
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $6,819,036  $3,407,371
                                                                

CONTACT: Investor and Media Contacts:
         Matthew Wolsfeld, CFO
         NTIC
         (763) 225-6600

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