NTIC reported a record first quarter for fiscal 2026 ended November 30, 2025, with consolidated net sales of $23.31 million, up 9.2% year over year as management highlighted the strongest YoY growth rate since fiscal 2024. Growth was broad-based, led by ZERUST Oil & Gas (+58.1% year over year) and supported by ZERUST Industrial (+6.9%) and Natur-Tec (+2.2%). NTIC China also delivered robust demand with a 23.5% YoY expansion to $4.9 million. Joint venture sales rose 2.9% YoY to $24.5 million, although joint venture operating income declined modestly as operating costs ticked higher. The Natur-Tec bioplastics business posted a quarterly record of $6.0 million, underscoring secular demand for sustainable materials. The company reported GAAP net income of $0.506 million and non-GAAP adjusted income of $0.344 million for the quarter, reflecting ongoing investments in strategic initiatives aimed at improving margin as the year progresses.
From a profitability perspective, gross margin was 36% for the quarter, down from 38.3% a year ago due to a temporary supplier lead time issue. Management expects sequential gross-margin improvement through fiscal 2026 as supply constraints normalize and scale benefits from recent investments begin to accrue. Operating expenses totaled $9.74 million, a modest year-over-year increase driven by higher selling, general, and administrative spend partially offset by lower R&D spend. Net debt remained manageable at roughly $5.92 million (with $12.31 million of debt including revolver borrowings), and the company continued to optimize working capital with $19.4 million in working capital at quarter-end. Management signaled ongoing focus on leveraging higher-margin segments, expanding ZERUST Oil & Gas and Natur-Tec opportunities, and flattening operating costs to support profitability in fiscal 2026.
Overall, NTIC is positioned for a self-sustaining path to higher sales and improving margins, supported by strategic investments, a growing pipeline (including a notable 3-year, ~$13 million FPSO project in Brazil), and accelerating demand in China and North America. The key question for investors is the pace and sustainability of margin expansion as the year unfolds and as joint ventures contribute more meaningfully to operating income.