MINNEAPOLIS, April 11, 2012 (GLOBE NEWSWIRE) --
Northern Technologies International Corporation (Nasdaq:NTIC)
today reported its financial results for the second quarter
of fiscal 2012. Highlights of NTIC's financial and
operating results include:
-
NTIC's consolidated net sales increased 4.1%
and 10.5% to $4,974,328 and $9,806,442 for the three and
six months ended February 29, 2012, respectively,
compared to the three and six months ended February 28,
2011, primarily a result of increased demand and sales of
Natur-Tec® products.
-
Net sales of Natur-Tec® products increased 84.3% to
$783,017 during the six months ended February 29, 2012
compared to $424,818 during the six months ended February
28, 2011.
-
NTIC's consolidated net sales for the six
months ended February 29, 2012 included $1,216,532 of
sales made by NTIC's majority-owned subsidiary in
Brazil, and of those sales, $150,861 were made to the oil
and gas industry sector in Brazil, compared to sales of
$1,551,623 made by NTIC's majority-owned subsidiary
in Brazil during the same period in fiscal 2011,
including sales of $627,022 to the oil and gas industry
sector.
-
During the second quarter of fiscal 2012, the value
of NTIC's Phase 2 supply contract with Petrobras was
increased by $657,000 (BRL$ 1.15 million) in ZERUST®
products, bringing the total Phase 2 contract value to
$3.1 million (BRL$ 5.36 million). NTIC's
majority-owned subsidiary in Brazil delivered the entire
remaining balance of this Phase 2 contract to Petrobras
after the end of the second quarter of fiscal 2012.
Accordingly, NTIC's financial results for the third
quarter of fiscal 2012 will reflect this approximately
$2.5 million (BRL$ 4.38 million) in sales to
Petrobras.
-
Sales by NTIC's joint ventures increased 2.6%
to $54,792,662 for the six months ended February 29, 2012
compared to $53,405,322 for the six months ended February
28, 2011.
-
Net income attributable to NTIC decreased 15.4% to
$1,564,950, or $0.35 per diluted common share, for the
six months ended February 29, 2012 compared to
$1,848,820, or $0.42 per diluted common share, for the
six months ended February 28, 2011. Net income
attributable to NTIC decreased 36.3% to $606,193, or
$0.14 per diluted common share, for the three months
ended February 29, 2012 compared to $949,039, or $0.22
per diluted common share, for the three months ended
February 28, 2011.
"The March 2012 delivery of over $3 million in
ZERUST® products to Petrobras represented the single largest
delivery to a customer in NTIC's history, and promises to
give a nice boost to our third quarter of fiscal 2012 results
when we report such results later in July. In the meantime,
we were pleased with the healthy sales growth in North and
South America during second quarter of fiscal 2012. Strong
sales growth in other regions, however, is proving to be
elusive for us as the ongoing sovereign debt crises in
various European countries have adversely affected sales in
not only countries in Europe, but also key supplier counties
like China and India. We are being exceptionally cautious as
we watch for firm signs of recovery in Europe and
worldwide," said G. Patrick Lynch, President and Chief
Executive Officer of NTIC.
During the three and six months ended February 29,
2012, sales of ZERUST®products and
services decreased 0.1% and increased 6.8% to $4,570,779 and
$9,023,425 during the three and six months ended February 29,
2012, respectively, compared to $4,576,313 and $8,451,741
during the three and six months ended February 28, 2011,
respectively, due to changes in demand from existing
customers and the addition of new customers.
During the three and six months ended February 29,
2012, 8.1% and 8.0%, of NTIC's consolidated net sales
were derived from sales of Natur-Tec® products compared to
4.2% and 4.8% during the three and six months ended February
28, 2011, respectively. Net sales of Natur-Tec® products
increased 100.0% and 84.3% during the three and six months
ended February 29, 2012 compared to the three and six months
ended February 28, 2011. These increases were due to
increased sales to Natur-Tec® distributors on the West Coast
of the United States. NTIC has continued to strengthen and
expand its West Coast distribution network in California, as
well as expand its industrial distribution reach to
geographical "green" hotspots such as Oregon,
Washington, Minnesota and New England.
"We continue to see tremendous opportunities for
finished bioplastic products and continue to strengthen and
expand our North American distribution network for finished
Natur-Tec bioplastic products. At the same time, we learned
at the beginning of March 2012 that the Italian government
was delaying the broader enforcement of its ban on
non-biodegradable plastic supermarket bags until the end of
2012. This will cause a marked decrease in the Natur-Tec®
sales expectations we had for this region in the second half
of our fiscal year 2012," said G. Patrick Lynch,
President and Chief Executive Officer of NTIC.
NTIC's equity in income of joint ventures increased
8.4% and decreased 8.6% to $1,224,675 and $2,582,355,
respectively, during the three and six months ended February
29, 2012 compared to $1,129,659 and $2,824,790 during the
three and six months ended February 28, 2011, which was
primarily a result of changes in the profitability of
NTIC's largest joint venture, EXCOR in Germany during the
most recent periods. NTIC recognized a 7.4% and 3.9% decrease
in fees for services provided to joint ventures during the
three and six months ended February 29, 2012 compared to the
three and six months ended February 28, 2011, respectively.
These decreases were primarily a result of the weakening of
the EURO and other currencies compared to the U.S. dollar,
and correlated with a 1.2% decrease and 2.6% increase in
total net sales of NTIC's joint ventures to $25,997,430
and $54,792,662 during the three and six months ended
February 29, 2012, respectively, compared the three and six
months ended February 28, 2011.
NTIC's total operating expenses increased slightly,
or 0.7%, to $6,718,296 during the six months ended February
29, 2012 compared to the six months ended February 28,
2011.
NTIC incurred $1,789,082 and $2,100,626 of expense
during the six months ended February 29, 2012 and February
28, 2011, respectively, in connection with its research and
development activities. These represent net amounts after
being reduced by reimbursements related to certain research
and development contracts. Such reimbursements totaled
$228,576 and $212,992 for the six months ended February 29,
2012 and February 28, 2011, respectively. NTIC anticipates
that it will spend between $4,000,000 and $4,200,000 in total
during fiscal 2012 on research and development activities
related to its new technologies. This estimate is a net range
after being reduced by anticipated reimbursements related to
certain research and development contracts.
Net income attributable to NTIC decreased 36.3%, to
$606,193, or $0.14 per diluted common share, for the three
months ended February 29, 2012 compared to $949,039, or $0.22
per diluted common share, for the three months ended February
28, 2011. Net income attributable to NTIC decreased 15.4%, to
$1,564,950, or $0.35 per diluted common share, for the six
months ended February 29, 2012 compared to $1,848,820, or
$0.42 per diluted common share, for the six months ended
February 28, 2011. This decrease was primarily the result of
a decrease in income from NTIC's joint ventures.
NTIC's working capital was $11,871,035 at February
29, 2012, including $3,335,798 in cash and cash equivalents,
compared to $9,085,748 at August 31, 2011, including
$3,266,362 in cash and cash equivalents.
Outlook
For the fiscal year ending August 31, 2012, NTIC
expects its net sales to range between $23.0 million and
$24.5 million, inclusive of sales made by NTIC's
majority-owned subsidiary in Brazil, and expects net income
attributable to NTIC to range between $4.7 million and $5.0
million, or between $1.08 and $1.14 per diluted common
share.
Conference Call and Webcast
NTIC will host a conference call today at 8:00 a.m.
Central Daylight Savings Time to review its results of
operations for the second quarter of fiscal 2012 and 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.comor
http://ir.ntic.com/events.cfmwhere 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 60624785.
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. NTIC also 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. In addition, NTIC markets proprietary
bio-plastic technologies under the Natur-Tec® brand. Finally,
NTIC's Polymer Energy® joint venture manufactures and
sells advance waste plastic to fuel conversion
machines.
The Northern Technologies International Corporation
logo is available athttp://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" 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 and the related economic
and political unrest in Europe; 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 report 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.
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