NTIC's ZERUST Sales Dip 1% in FY25, Brazil Offshore Deal Signals Future Growth

TL;DR

**NTIC's FY25 sales were soft, but the new $13M Brazil oil & gas contract is a bullish signal for future growth, making it a buy on the dip.**

AI Summary

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION (NTIC) reported consolidated net sales of $62,488,397 from its ZERUST corrosion prevention solutions in fiscal 2025, marking a 1.0% decrease from fiscal 2024. Sales to the oil and gas industry, a key strategic focus, decreased by 20.7% to $7,317,704 in fiscal 2025, despite a significant three-year offshore oil and gas production asset preservation contract secured by Zerust Brazil in November 2025, valued at approximately R$70 million (US$13 million). This contract, expected to ramp in fiscal 2026 and run through calendar 2028, includes R$40 million (US$7.4 million) in materials and R$30 million (US$5.6 million) in engineering and field services. NTIC also markets Natur-Tec bio-based and compostable polymer resin compounds and finished products, which represent its second reportable business segment. The company operates globally through 12 consolidated subsidiaries and 15 active joint ventures, with a strategic outlook focused on expanding ZERUST's penetration in the oil and gas sector and strengthening its Natur-Tec distribution network.

Why It Matters

NTIC's slight dip in ZERUST sales, particularly the 20.7% decline in the oil and gas sector, highlights the challenges of long sales cycles in specialized industrial markets. However, the substantial US$13 million contract secured by Zerust Brazil in November 2025 is a critical win, signaling potential future revenue stabilization and growth, especially given the competitive landscape for corrosion prevention solutions. For investors, this contract could be a turning point, demonstrating the company's ability to convert strategic efforts into tangible business, impacting future earnings and market perception. Employees and customers in the oil and gas sector will see increased activity and specialized service delivery, reinforcing NTIC's position in a vital industry.

Risk Assessment

Risk Level: medium — The 1.0% decrease in consolidated net sales for ZERUST products and services in fiscal 2025, coupled with a 20.7% decrease in sales to the oil and gas industry, indicates a reliance on long sales cycles and potential market volatility. While the US$13 million contract is promising, its revenue ramp-up is projected for fiscal 2026 and beyond, meaning current fiscal performance remains under pressure.

Analyst Insight

Investors should monitor NTIC's progress in executing the US$13 million Zerust Brazil contract, as its successful ramp-up in fiscal 2026 will be crucial for revenue growth. Consider this a potential long-term play, as the company's strategic focus on the oil and gas industry and sustainable Natur-Tec products positions it for future market shifts, despite recent sales declines.

Financial Highlights

revenue

$62,488,397

revenue Growth

-1.0%

Revenue Breakdown

Key Numbers

• $62,488,397 — ZERUST consolidated net sales (1.0% decrease from fiscal 2024)
• $7,317,704 — Sales to oil and gas industry (20.7% decrease from fiscal 2024)
• R$70 million — Estimated total value of Brazil offshore contract (Approximately US$13 million, expected to ramp in fiscal 2026)
• R$40 million — Materials portion of Brazil offshore contract (Approximately US$7.4 million)
• R$30 million — Engineering and field services portion of Brazil offshore contract (Approximately US$5.6 million)
• 74.2% — Percentage of consolidated net sales from ZERUST (In fiscal 2025)
• 12 — Number of operating subsidiaries (As of November 20, 2025)
• 15 — Number of active joint venture arrangements (As of November 20, 2025)
• 9,480,689 — Shares of common stock outstanding (As of November 20, 2025)
• $88.8 million — Aggregate market value of common stock (As of February 28, 2025)

Key Players & Entities

• NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION (company) — registrant
• NTIC (Shanghai) Co., Ltd. (company) — wholly owned subsidiary in China
• HNTI Limited (company) — wholly owned subsidiary in India (Zerust India)
• NTI Asean LLC (company) — majority-owned joint venture holding company
• Zerust Preveno de Corroso S.A (company) — majority-owned subsidiary in Brazil (Zerust Brazil)
• NTIC Europe GmbH (company) — wholly owned subsidiary in Germany (NTI Europe)
• Natur-Tec India Private Limited (company) — majority-owned subsidiary in India
• Natur Tec Lanka (Pvt) Ltd (company) — majority-owned subsidiary in Sri Lanka
• EXCOR Korrosionsschutz – Technologien und Produkte GmbH (company) — joint venture in Germany
• Securities and Exchange Commission (regulator) — filing oversight

FAQ

Risk Factors

• Dependence on Key Industries and Customers [high — market]: The company's ZERUST business is significantly exposed to the oil and gas industry, which saw a 20.7% decrease in sales in fiscal 2025. A substantial portion of revenue is tied to specific industry demands and large contracts, making the company vulnerable to downturns in these sectors.
• Global Operations and Supply Chain Complexity [medium — operational]: NTIC operates globally through 12 consolidated subsidiaries and 15 active joint ventures. Managing this complex network across different regions and regulatory environments presents operational challenges and potential supply chain disruptions.
• Competition in Sustainable Packaging [medium — market]: The Natur-Tec segment faces competition in the growing market for bio-based and compostable products. Success depends on effective distribution and market penetration against other sustainable material providers.
• Foreign Currency Exchange Rate Fluctuations [medium — financial]: With operations in over 65 countries, NTIC is exposed to fluctuations in foreign currency exchange rates, which can impact reported revenues and profitability from its international subsidiaries and joint ventures.

Industry Context

NTIC operates in two primary segments: corrosion prevention (ZERUST) and sustainable packaging (Natur-Tec). The ZERUST segment serves diverse industries including automotive, general industrial, and increasingly, oil and gas. The Natur-Tec segment caters to the growing demand for environmentally friendly packaging solutions. The company faces competition from established players in both corrosion prevention and sustainable materials markets.

Regulatory Implications

As a global company, NTIC must comply with various international regulations related to product safety, environmental standards, and trade. The Natur-Tec segment, in particular, is subject to evolving regulations concerning biodegradability and compostability certifications.

What Investors Should Do

1. Monitor the ramp-up of the Brazil offshore oil and gas contract.
2. Assess the growth trajectory of the Natur-Tec segment.
3. Evaluate the impact of oil and gas market volatility on ZERUST sales.

Key Dates

• 2025-11-01: Zerust Brazil secured a three-year offshore oil and gas production asset preservation contract. — This contract, valued at approximately R$70 million (US$13 million), is expected to significantly boost ZERUST's revenue starting in fiscal year 2026, offsetting recent declines in the oil and gas sector.
• 2025-02-28: Aggregate market value of common stock was $88.8 million. — Provides a snapshot of the company's market capitalization as of a specific date in fiscal 2025.
• 2025-11-20: As of this date, the company had 12 consolidated subsidiaries and 15 active joint venture arrangements. — Indicates the company's global operational footprint and structure at the end of the fiscal year.

Glossary

ZERUST

NTIC's brand for proprietary rust and corrosion inhibiting products and services. (This is the company's primary business segment, accounting for the majority of its sales.)

Natur-Tec

NTIC's brand for proprietary bio-based and certified compostable (fully biodegradable) polymer resin compounds and finished products. (Represents the company's second reportable business segment focused on sustainable packaging solutions.)

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task. (NTIC utilizes a significant number of joint ventures (15 active) to expand its global reach and market penetration.)

Consolidated Subsidiaries

Companies that are owned or controlled by NTIC and whose financial results are combined with NTIC's in its financial statements. (NTIC operates through 12 consolidated subsidiaries, forming the core of its direct business operations.)

Year-Over-Year Comparison

Consolidated net sales for fiscal 2025 decreased by 1.0% compared to fiscal 2024, reaching $62,488,397. This decline was primarily driven by a significant 20.7% drop in sales to the oil and gas industry, a key strategic focus. While specific margin data was not provided for comparison, the overall revenue contraction suggests potential pressure on profitability, although the company has secured a large contract expected to boost future revenues.

Key Financial Figures

• $0.02 — ich registered Common stock, par value $0.02 per share NTIC The Nasdaq Stock Mar
• $70 million — estimated total value of approximately R$70 million (US$13 million). This includes approxim
• $13 million — value of approximately R$70 million (US$13 million). This includes approximately R$40 mill
• $40 million — million). This includes approximately R$40 million (US$7.4 million) in materials and appro
• $7.4 million — includes approximately R$40 million (US$7.4 million) in materials and approximately R$30 mi
• $30 million — illion) in materials and approximately R$30 million (US$5.6 million) in engineering and fie
• $5.6 million — rials and approximately R$30 million (US$5.6 million) in engineering and field services. The
• $62,488,397 — dated net sales in fiscal 2025 included $62,488,397 in sales of ZERUST rust and corrosion i
• $7,317,704 — dated net sales in fiscal 2025 included $7,317,704 in sales made to customers in the oil a

Filing Documents

• ntic20250831_10k.htm (10-K) — 1855KB
• ex_886693.htm (EX-19.1) — 137KB
• ex_886679.htm (EX-21.1) — 40KB
• ex_886680.htm (EX-23.1) — 2KB
• ex_886681.htm (EX-31.1) — 13KB
• ex_886682.htm (EX-31.2) — 13KB
• ex_886683.htm (EX-32.1) — 5KB
• ex_886684.htm (EX-32.2) — 6KB
• 0001171843-25-007481.txt ( ) — 9650KB
• ntic-20250831.xsd (EX-101.SCH) — 82KB
• ntic-20250831_def.xml (EX-101.DEF) — 576KB
• ntic-20250831_lab.xml (EX-101.LAB) — 510KB
• ntic-20250831_pre.xml (EX-101.PRE) — 629KB
• ntic-20250831_cal.xml (EX-101.CAL) — 73KB
• ntic20250831_10k_htm.xml (XML) — 1400KB

BUSINESS

BUSINESS 1 INFORMATION ABOUT OUR EXECUTIVE OFFICERS 13 Item 1A.

RISK FACTORS

RISK FACTORS 15 Item 1B. UNRESOLVED STAFF COMMENTS 35 Item 1C. CYBERSECURITY 35 Item 2.

PROPERTIES

PROPERTIES 37 Item 3.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 37 Item 4. MINE SAFETY DISCLOSURES 37 PART II 38 Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 38 Item 6. [RESERVED] 38 Item 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 39 Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 54 Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 55 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 84 Item 9A.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 84 Item 9B. OTHER INFORMATION 85 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 85 PART III 86 Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 86 Item 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 86 Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 87 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 88 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 88 PART IV 89 Item 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES 89 Item 16. FORM 10-K SUMMARY 93 _______________ This annual report on Form 10-K contains certain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by those sections. For more information, see " Part I. Item 1. Business – Forward-Looking Statements. " i _______________ As used in this report, references to " NTIC, " the " Company, " " we, " " our, " or " us, " unless the context otherwise requires, refer to Northern Technologies International Corporation and its wholly owned and majority-owned subsidiaries, all of which are consolidated on NTIC ' s consolidated financial statements. As used in this report, references to: (1) " NTIC China " refer to NTIC ' s wholly owned subsidiary in China, NTIC (Shanghai) Co., Ltd.; (2) " NTI Europe " refer to NTIC ' s wholly owned subsidiary in Germany, NTIC Europe GmbH; (3) " Zerust Mexico " refer to NTIC ' s wholly owned subsidiary in Mexico, ZERUST-EXCOR MEXICO, S. de R.L. de C.V.; (4) " Zerust India " refer to NTIC ' s wholly owned subsidiary in India, HNTI Limited (formerly Harita-NTI Limited); (5) " Zerust Brazil " refer to NTIC ' s majority owned Brazilian subsidiary, Zerust Preven o de Corros o S.A.; (6) " Natur-Tec India " refer to NTIC ' s majority-owned subsidiary in India, Natur-Tec India Private Limited; (7) " Natur Tec Lanka " refer to NTIC ' s majority-owned subsidiary in Sri Lanka, Natur Tec Lanka (Pvt) Ltd and (8) " NTI Asean " refer to NTIC ' s majority-owned holding company subsidiary, NTI Asean LLC, which holds

BUSINESS

Item 1. BUSINESS Overview Northern Technologies International Corporation (NTIC) develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors, and agents. NTIC's primary business is corrosion prevention marketed mainly under the ZERUST brand. NTIC has been selling its proprietary ZERUST products and services to the automotive, general industrial, mechanical, mining, agricultural, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry. Additionally, NTIC markets and sells a portfolio of proprietary bio-based and certified compostable (fully biodegradable) polymer resin compounds and finished products under the Natur-Tec brand. These sustainable packaging products are intended to reduce NTIC's customers' carbon footprint and provide environmentally sound waste disposal options. NTIC's ZERUST rust and corrosion inhibiting products include plastic and paper packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as engineered solutions designed specifically for the industries it serves. NTIC also offers worldwide, on-site, technical consulting for rust and corrosion prevention issues. In North America, NTIC sells its ZERUST corrosion prevention solutions through a network of independent distributors and agents supported by a direct sales force. Internationally, NTIC sells its ZERUST corrosion prevention solutions through its wholly owned subsidiary in China, NTIC (Shanghai) Co., Ltd. (NTIC China), its wholly owned subsidiary in India, HNTI Limited (Zerust India), its majority-owned joint venture holding company for NTIC's joint venture investments in the Association of Southeast Asian Nations (ASEAN) region, NTI Asean LLC (NTI Asean), its majority-owned subsidiary in Brazil, Zerust Preveno de Corroso S.A (Zerust Brazil), and certain majority-owned and wh

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