Northern Technologies International Corp. Files 10-Q for Period Ending February 29, 2024

TL;DR

<b>Northern Technologies International Corp. filed its Q2 2024 10-Q report on April 11, 2024.</b>

AI Summary

NORTHERN TECHNOLOGIES INTERNATIONAL CORP (NTIC) filed a Quarterly Report (10-Q) with the SEC on April 11, 2024. Northern Technologies International Corp. filed a 10-Q report for the period ending February 29, 2024. The filing covers the second quarter of fiscal year 2024. The company's fiscal year ends on August 31st. The filing was made on April 11, 2024. Northern Technologies International Corp. is in the Coating, Engraving & Allied Services industry.

Why It Matters

For investors and stakeholders tracking NORTHERN TECHNOLOGIES INTERNATIONAL CORP, this filing contains several important signals. This 10-Q filing provides investors with the company's financial performance and operational updates for the second quarter of fiscal year 2024. Understanding the details within this report is crucial for assessing the company's current financial health, strategic direction, and potential risks.

Risk Assessment

Risk Level: low — NORTHERN TECHNOLOGIES INTERNATIONAL CORP shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate red flags or significant negative disclosures.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand the company's performance and outlook.

Key Numbers

• 2024-02-29 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-04-11 — Filing Date (FILED AS OF DATE)
• 0831 — Fiscal Year End (FISCAL YEAR END)
• 10-Q — Form Type (FORM TYPE)

Key Players & Entities

• NORTHERN TECHNOLOGIES INTERNATIONAL CORP (company) — FILER
• 0000875582 (company) — CENTRAL INDEX KEY
• 3470 (company) — STANDARD INDUSTRIAL CLASSIFICATION
• DE (company) — STATE OF INCORPORATION
• MN (company) — STATE
• CIRCLE PINES (company) — CITY
• NORTHERN INSTRUMENTS CORP (company) — FORMER COMPANY
• 2024-02-29 (date) — CONFORMED PERIOD OF REPORT

FAQ

Industry Context

Northern Technologies International Corp. operates in the Coating, Engraving & Allied Services sector, which involves specialized surface treatment and finishing processes for various industrial applications.

Regulatory Implications

The company is subject to standard SEC reporting requirements for publicly traded companies, including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

1. Analyze the financial statements (balance sheet, income statement, cash flow) for the quarter ended February 29, 2024.
2. Review the Management's Discussion and Analysis (MD&A) section for insights into business performance and future outlook.
3. Check for any new risk factors or updates to existing ones disclosed in the filing.

Key Dates

• 2024-02-29: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-04-11: Filing Date — Date the 10-Q report was officially filed with the SEC.
• 1993-03-28: Name Change — Date Northern Technologies International Corp. changed its name from Northern Instruments Corp.

Year-Over-Year Comparison

This is the 10-Q filing for the second quarter of fiscal year 2024, following the previous 10-Q filing for the first quarter of fiscal year 2024 (period ending November 30, 2023).

Key Financial Figures

• $0.02 — ich registered Common stock, par value $0.02 per share NTIC Nasdaq Global Market

Filing Documents

• ntic20240229_10q.htm (10-Q) — 1427KB
• ex_648946.htm (EX-31.1) — 12KB
• ex_648947.htm (EX-31.2) — 12KB
• ex_648948.htm (EX-32.1) — 4KB
• ex_648949.htm (EX-32.2) — 4KB
• 0001171843-24-001955.txt (&nbsp;) — 6337KB
• ntic-20240229.xsd (EX-101.SCH) — 55KB
• ntic-20240229_def.xml (EX-101.DEF) — 318KB
• ntic-20240229_lab.xml (EX-101.LAB) — 281KB
• ntic-20240229_pre.xml (EX-101.PRE) — 355KB
• ntic-20240229_cal.xml (EX-101.CAL) — 50KB
• ntic20240229_10q_htm.xml (XML) — 1124KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets as of February 29, 2024 (unaudited) and August 31, 2023 (audited) 1 Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended February 29, 2024 and February 28, 2023 2 Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Months Ended February 29, 2024 and February 28, 2023 3 Consolidated Statements of Equity (unaudited) for the Three and Six Months Ended February 29, 2024 and February 28, 2023 4 Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended February 29, 2024 and February 28, 2023 5

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 31 Item 4.

Controls and Procedures

Controls and Procedures 32

— OTHER INFORMATION

PART II — OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 34 Item 1A.

Risk Factors

Risk Factors 34 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34 Item 3. Defaults Upon Senior Securities 34 Item 4. Mine Safety Disclosures 34 Item 5. Other Information 35 Item 6. Exhibits 35

SIGNATURES

SIGNATURES 36 _________________ This quarterly report on Form 10-Q 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. Financial Information – Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations – 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); and (5) " NTI Asean " refer to NTIC ' s majority-owned holding company subsidiary, NTI Asean LLC, which holds investments in certain entities that operate in the Association of Southeast Asian Nations (ASEAN) region. NTIC ' s consolidated financial statements do not include the accounts of any of its joint ventures. Except as otherwise indicated, references in this report to NTIC ' s joint ventures do not include any of NTIC ' s wholly-owned or majority-owned subsidiaries. As used in this report, references to " EXCOR " refer to NTIC ' s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH. All trademarks, trade names or service mar

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF FEBRUARY 29, 2024 (UNAUDITED) AND AUGUST 31, 2023 (AUDITED) February 29, 2024 August 31, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,835,031 $ 5,406,173 Receivables: Trade, excluding joint ventures, less allowance for doubtful accounts of $ 533,000 as of February 29, 2024 and August 31, 2023 14,800,592 15,645,130 Trade, joint ventures 891,929 187,912 Fees for services provided to joint ventures 1,227,711 1,296,594 Dividend receivable from joint venture 509,716 1,986,027 Income taxes — 34,202 Inventories 12,538,859 13,096,489 Prepaid expenses 2,529,476 2,019,029 Total current assets $ 37,333,314 $ 39,671,556 PROPERTY AND EQUIPMENT, NET $ 14,963,186 $ 14,065,354 OTHER ASSETS: Investments in joint ventures 23,460,869 23,705,714 Deferred income tax, net 504,913 530,944 Intangible asset, net 5,926,423 6,159,485 Goodwill 4,782,376 4,782,376 Operating lease right of use asset 336,169 428,874 Total other assets 35,010,750 35,607,393 Total assets $ 87,307,250 $ 89,344,303 LIABILITIES AND EQUITY CURRENT LIABILITIES: Line of credit $ 1,192,645 $ 3,600,000 Term loan 2,782,686 2,757,176 Accounts payable 6,487,718 6,056,329 Income taxes payable 13,798 13,053 Accrued liabilities: Payroll and related benefits 1,425,274 2,305,400 Other 1,284,894 1,648,615 Current portion of operating lease 170,840 340,799 Total current liabilities $ 13,357,855 $ 16,721,372 LONG-TERM LIABILITIES: Deferred income tax, net 1,836,059 1,836,059 Operating lease, less current portion 165,329 88,075 Total long-term liabilities $ 2,001,388 $ 1,924,134 COMMITMENTS AND CONTINGENCIES (Note 12) EQUITY: Preferred stock, no par value; authorized 10,000 shares; none issued and outstanding — — Co

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. INTERIM FINANCIAL INFORMATION In the opinion of management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, which are of a normal recurring nature, and present fairly the consolidated financial position of Northern Technologies International Corporation and its subsidiaries (the Company) as of February 29, 2024 and August 31, 2023 and the results of the Company's operations for the three and six months ended February 29, 2024 and February 28, 2023, the changes in stockholders' equity for the three and six months ended February 29, 2024 and February 28, 2023, and the Company's cash flows for the six months ended February 29, 2024 and February 28, 2023, in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's annual report on Form 10-K for the fiscal year ended August 31, 2023. These consolidated financial statements also should be read in conjunction with the " Management ' s Discussion and Analysis of Financial Condition and Results of Operations " section appearing in this report. Operating results for the three and six months ended February 29, 2024 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 31, 2024. The Company evaluates events occurring after the date of the consolidated financial statements, through the date the consolidated financial statements were available to be issued, requiring recording or disclosure in the consolidated financial statements. 2. ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instru

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